Even as India reduces its trade gap with China, its balance with respect to the special administrative region of Hong Kong has changed from a surplus to a deficit.
Imports from Hong Kong are likely to draw greater scrutiny, according to a report by Mint. This comes at a time when China is reported to have increased routing exports via the special administrative region amid pressure to narrow its trade gap with India.
Beijing has imposed a new security law in Hong Kong, which undermines the city’s autonomy.
Even as India reduces its trade gap with China, its balance with respect to Hong Kong has changed from a surplus to a deficit for the first time in the year to March 2019, the report suggests. Imports from Hong Kong have nearly tripled in just four years.
These imports being routed through Hong Kong are mostly high-value electronic goods.
Chinese imports and investments are facing stronger scrutiny in India amid border tensions in eastern Ladakh. A violent face-off in June had led to the death of 20 Indian soldiers, including an officer. There were casualties on the Chinese side too. However, the number of casualties remains unclear.
“When the government is thinking of putting restrictions, it is looking at products of only Chinese origin and the curbs do not apply to products coming from Hong Kong. Government should now extend such restrictions to Hong Kong as well," Biswajit Dhar, professor of economics and a trade expert at the Jawaharlal Nehru University (JNU), told the newspaper.
In June, India banned 59 Chinese apps, including TikTok, on national security grounds. India has also scrapped rail and road contracts awarded to Chinese companies.
Read our complete coverage on the India-China border tensions