As gold prices slump, the Chinese stock exchange plunges and Indian rupee falls to new lows, monetary policy analysts are revisiting the competitiveness of China – India bilateral trade. A report by India’s apex bank – the Reserve Bank of India notes that exports from China into India are gradually becoming uncompetitive against other developing nations in the region. The report entitled ‘India China Bilateral Trade Relationship’, authored by Prof S K Mohanty of Research and Information System for Developing Countries also shows the impact on Indian exports due to the fluctuation in the Chinese yuan.
An economic research paper, this report it outlines four major sectors wherein India imports what the report considers goods that are available for cheaper in neighboring competitive nations. The four sectors mentioned include chemicals, textiles, base metals and machinery. It also mentions imports of minerals, plastics, gems & jewelleries, and automobile parts from China have also turned out to be uncompetitive. The combined share of these eight sectors exceeded 93 percent of total uncompetitive imports during 2007-09.