Consider the following with respect to the trade statistics between India China India runs a trade d...........

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Consider the following with respect to the trade statistics between India-China:

India runs a trade deficit with China.
China’s exports to India account for a majority of China’s exports.
Chinese companies dominate the telecom sector in India in terms of total equipment imported.
India’s pharma sector has critical dependence on some Chinese imports for use in drugs manufacturing.

Select the correct answer using the codes below.

1 and 2 only

1, 3 and 4 only

3 and 4 only

2, 3 and 4 only

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Explanation:

A trade war between China and India seems to be looming after the imposition of anti-dumping duties on many Chinese products by India. But, India cannot afford to fight a trade war with China at this juncture. The reasoning is as below:

Statement 1: India’s trade deficit with China rose to $46.56 billion last year.

Statement 2: China’s exports to India account for only 2% of its total exports. So even if Indians boycott all the goods imported from China, it will not make as big an impact on China as to bring it to its knees before India.

Statement 3: India today imports telecom gear worth over Rs 70,000 crore annually, much of it from Chinese firms like Huawei and ZTE. Chinese companies dominate the telecom sector in India.

Statement 4: Some active pharmaceutical ingredients (APIs) can be provided only by China to India.

Power is another sector where India has come to be dependent on Chinese imports. In the 12th Plan alone, almost 30% of the generating capacity was imported from China.