India-China trade dynamics have consistently been a focal point in global commerce. Nonetheless, 2023 has shown an alarming discrepancy in trade data. This raises concerns about reporting practices and structural issues.

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Key Issues in Trade Data

1. Alarming Discrepancy:
   In 2023, trade data between India and China reflected a discrepancy of $18.09 billion, a significant increase from the $15.5 billion reported in 2022. This gap underscores irregularities in reporting and valuation techniques.
2. Divergent Figures:
   • India’s reported merchandise imports from China stood at $99.59 billion, a decline of 18.2% from China’s reported exports.
   • China, but, reported exports to India amounting to $117.68 billion.
   • In 2022, India’s imports were $102.63 billion, while China’s exports to India were $118.50 billion.
3. Bilateral Trade Volume:
   Despite the discrepancies, China remains India’s largest trading partner. The bilateral trade for 2023-24 reached $118.4 billion.
4. Key Concerns:
   • Discrepancies have raised concerns over potential under-invoicing, misclassification, and inconsistent reporting practices.
   • Sectors with significant gaps include textiles, clothing, iron and steel, and electronics.
5. Methodological Differences:
   • The discrepancy stems from how trade values are calculated.
   • India calculates imports on a CIF (cost, insurance, freight) basis. This typically includes higher values due to added costs. Meanwhile, China reports on a FOB (free on board) basis.
6. Trade Deficit Impact:
   India’s goods trade deficit with China increased to $57.83 billion in the April-October 2023 period, compared to $51.12 billion in the same period the prior year.
7. Need for Scrutiny:
   Experts have called for deeper investigations into reporting practices. This is particularly critical in sectors with high variances. These investigations aim to find and resolve potential anomalies.
8. Structural Challenges:
   Under-invoicing remains a concern. Other factors also cause these discrepancies. These include data quality issues and human error.

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India-China Trade Data Discrepancies (Key Figures)

Category	2023	2022
India’s Reported Imports	$99.59 billion	$102.63 billion
China’s Reported Exports	$117.68 billion	$118.50 billion
Discrepancy	$18.09 billion	$15.5 billion
India-China Bilateral Trade Volume	$118.4 billion (2023-24)	Not specified
Trade Deficit (Apr-Oct)	$57.83 billion	$51.12 billion
Sectors with Discrepancies	Textiles, clothing, electronics, iron & steel	Textiles, clothing, electronics, iron & steel

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Conclusion

The growing trade discrepancies between India and China highlight significant challenges in trade data accuracy and reporting mechanisms. Addressing these gaps is essential to guarantee transparency, fair trade practices, and effective policy formulation. By delving deeper into the causes, both nations can strengthen their economic partnership and build a more reliable trade framework.