India's Strategic Shift: Reducing Reliance on Chinese MSME Imports

India is reducing its dependence on Chinese imports for MSME goods like leather articles, toys, and musical instruments, aiming to diversify sources and bolster domestic production. While India's reliance is decreasing, other countries like Brazil are increasingly importing these goods from China.

India is showing a clear trend of reducing its dependence on imports from China for MSME goods such as leather articles, toys, and musical instruments, according to an official statement on Monday.

While India's reliance on these Chinese imports has been diminishing, countries like Brazil have shown an increased dependency.

Data reveals a significant drop in India's imports of musical instruments from China, falling from 77.58% in 2013 to 51.51% in 2023. Similarly, the imports of essential oils, cosmetics, and toilet preparations have decreased from 16.33% to 11.86% during the same period.

The reduction extends to toys and games as well, with inbound shipments from China declining from 76.7% in 2013 to 70.97% in 2023. An official highlighted this decline as part of India's strategic shift towards diversifying import sources or enhancing domestic production capabilities, contrasting with other major markets where reliance on Chinese imports is either stable or increasing.

A report by the think tank GTRI noted that increasing import levels of products like umbrellas, toys, certain fabrics, and musical instruments are adversely affecting Indian MSMEs that produce these goods domestically. For instance, China supplies 95.8% of India's umbrellas and sun umbrellas and 91.9% of artificial flowers and human hair articles, making up significant market shares.

(With inputs from agencies.)