'India's dependence on Chinese imports for MSME goods has been declining'

India's reliance on imports of MSME goods such as articles of leather, toys, and musical instruments from China is declining steadily, reflecting the country's efforts to diversify import sources and strengthen domestic production capabilities, an official said on Monday.

On the other hand, dependency on imports of these goods from China by other countries like Brazil is increasing.

Citing data, the official said that the concentration of musical instrument imports from China has decreased from 77.58 per cent in 2013 to 51.51 per cent in 2023.

The share of imports of essential oils, cosmetics, and toilet preparations from China has also declined from 16.33 per cent in 2013 to 11.86 per cent in 2023.

Similarly, the inbound shipments of toys and games from the neighbouring country have dipped from 76.7 per cent in 2013 to 70.97 per cent in 2023.

"India's trend of reducing its reliance on Chinese imports, particularly in categories like articles of leather, ceramic products, toys, and musical instruments, contrasts with the trends observed in other major markets, where dependence either remains steady or is increasing.

"This indicates a strategic shift by India towards diversifying its import sources or bolstering domestic production capabilities," the official added.

A report by think tank GTRI on September 1 highlighted that increasing imports of goods such as umbrellas, toys, certain fabrics, and musical instruments are severely hurting MSMEs as many of these products are also made by domestic businesses.

According to the GTRI analysis, China supplies 95.8 per cent of India's umbrellas and sun umbrellas ($31 million) and 91.9 per cent of artificial flowers and human hair articles ($14 million).