According to government data, India's trade deficit with China has fallen to $48.66 billion in the financial year 2019-20 on account of a decline in imports from the neighbouring country. During the year, exports to China stood at $16.6 billion, while imports aggregated at $65.26 billion.
The trade deficit between the countries was at $53.56 billion in 2018-19 and $63 billion in 2017-18.
The main imports from China include clocks and watches, musical instruments, toys, sports goods, furniture, mattresses, plastics, electrical machinery, electronic equipment, chemicals, iron and steel items, fertilisers, mineral fuel and metals.
The government is taking steps such as framing technical regulations and quality norms for several products to reduce India's dependence on China for imports.
Anti-dumping duties have also been imposed on several goods which are being dumped in the domestic market at below-average prices from China with a view to guard domestic players from cheap imports.
Over 50 quality control orders and other technical regulations have been notified in the past one year including on electronic goods, toys, air conditioners, bicycle parts, chemicals, safety glass, pressure cooker, items of steel, electrical items such as cables.
China accounts for about 14 percent of India's total imports and is a major supplier for sectors like mobile phones, telecom, power, plastic toys, and critical pharma ingredients.
Similarly, foreign direct investment (FDI) from China into Indian companies has dipped to $163.78 million in 2019-20 from $229 million in the previous fiscal, according to government data.
In the previous two financial years, India had received $350.22 million and $277.25 million, respectively, as FDI from the neighbouring country. Between April 2000 and March 2020, India attracted FDI worth $2.38 billion from China.
In April, the government had tightened FDI norms for countries which share land border with India. As per the amended FDI policy, a company or an individual from a country that shares land border with India can invest in any sector only after getting government approval.