“Vietnam electricity exports boost, India’s imports increased by 17%”.
India has seen a significant increase in imports of electrical machinery and parts from Vietnam in the first seven months of 2024. Imports from Vietnam rose 17% to $5.8 billion between January and July, according to analyzed commerce ministry data. Same period last year.
A closer look at trade numbers shows that electrical machinery and parts, which make up a large share of imports from Vietnam, grew by a substantial 43% in the first 5 months of 2024 compared to a year earlier. This strong double-digit growth highlights Vietnam’s growing prominence as a leading supplier of electrical goods and components to the Indian market.
Experts attribute Vietnam’s export success to Chinese companies shifting their operating bases to the Southeast Asian country. According to the Economic Survey 2023-24, re-routing of Chinese supply chains through countries like Vietnam and Mexico explains their growing trade with India. Vietnam has proven particularly attractive to Chinese businesses seeking to bypass tariffs imposed by major economies.
What is worrying for domestic manufacturers is that India became a net importer of steel for the first time in FY24, with the overall deficit widening to 1.1 million tonnes. Vietnam emerged as a new exporter along with traditional suppliers such as China, South Korea and Japan. Imports from Vietnam almost doubled year-on-year in July, suggesting rising inflows are likely to continue.
As Chinese investment is catalysing Vietnamese exports globally as well as to India, the risks of excess capacity and predatory pricing cannot be ignored. Strict monitoring of imports under existing FTAs is important to ensure fair play and protect local industries. Going forward, prudent FDI and quality trade agreements are the key to balanced and sustainable growth in India’s foreign commerce.
