Imports from Hong Kong on the rise as trade gap with China narrows

Hong Kong has emerged a beneficiary of the India-China conflict, with Indian importers increasingly sourcing their requirements from the Special Administrative Region (SAR), which has a separate jurisdiction under the World Trade Organisation (WTO).

India’s trade deficit with China is on a downward trajectory, and hit a 5-year low in FY20 due to lower imports and higher exports, but trade deficit with Hong Kong continues to rise.

In FY20, the same increased to a record high of $6.3 billion (annualised basis), from $5 billion a year ago. This was driven by a sharp rise in imports and a steady decline