Export/Import Updates!
August 2, 2021

Top 10 India Imports and Import Sources

In 2020-21, Indian imports were valued at $388.92 billion, an 18 percent drop from 2019-20, when the country imported goods and services worth $474.71 billion. In the last financial year, Indian exports stood at $290.18 billion, down 7.4 percent from $313.36 billion in 2019-20. In India’s foreign trade, imports have always outpaced exports, a fact illustrated by these figures from the past two years. Widespread economic disruptions caused by Covid-19 in 2020 did not change this reality.

The Indian government’s flagship Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) strives to significantly improve domestic manufacturing and, thereby, reduce import dependence. But lowering India’s reliance on imports is easier said than done, especially when the processes for imports are ironically far better than those for exports, as admitted by the government in the Economic Survey.  

Given the importance of foreign goods in the country, this piece explores the top 10 imports of India and it’s top 10 import sources.

Top 10 imports of India  

According to market and consumer data firm Statista, the top 10 commodities imported by India in 2020-21 were:

  1. Crude petroleum (21.6%)
  2. Gold (5.9%)
  3. Petroleum products (5.8%)
  4. Coal, coke and briquettes (4.7%)
  5. Pearl, precious and semi-precious stones (4.7%)
  6. Electronic components (3.4%)
  7. Telecom instruments (3%)
  8. Organic chemicals (2.5%)
  9. Industrial machinery (2.5%)
  10. Electric machinery and equipment (2.3%)

Note: The percentage figures in brackets signify the commodity’s share in India’s total imports.  

Top 10 countries from which India imports

India’s top 10 trade partners from where it imported the above commodities in 2020-21, according to Statista, were:  

  1. China (13.7%)
  2. United States of America (7.5%)
  3. United Arab Emirates (6.3%)
  4. Saudi Arabia (5.6%)
  5. Iraq (5%)
  6. Hong Kong (3.5%)
  7. Switzerland (3.5%)
  8. South Korea (3.3%)
  9. Indonesia (3.1%)
  10. Singapore (3.1%)

Note: The percentage figures in brackets signify the foreign trade partner’s share in India’s total imports.

China takes the lion’s share  

China toppled the US to become India’s top trading partner in 2020. Bilateral trade between the two Asian neighbours stood at $77.7 billion. Imports from China accounted for the major share of this trade and was valued at $58.7 billion. Exports to China stood at $19 billion. Indian imports from China eclipsed imports from the US and UAE combined. India’s dependence on Chinese goods is largely due to the fact that they are cheap and easily available in abundant volumes.

Traditionally, India’s main imports from China are electrical machinery and equipment, and mechanical appliances such as telephone equipment, sound recording devices, TV cameras, video phones, automatic data processing machines, electronic circuits, transistors and semiconductor devices. Other than these, it is also a major supplier of antibiotics, fertilisers, automobile components and accessories.

Read our piece on the India-China trade partnership here.

India's Top Import Sources

An in-depth look into India’s top 10 imported commodities

Let’s take a look at each of the top imports and the trade facts around them:  

1. Crude petroleum

Crude petroleum was India’s top import in 2020-21. India is the third largest importer of this commodity. It depends on crude imports for 84% of its oil requirements. In February, India’s top supplier of crude oil was Iraq, followed by the US, Nigeria and Saudi Arabia. Traditionally, India has sourced the majority of its crude oil from the Saudi Arabia-led Organisation of the Petroleum Exporting Countries (OPEC). However, last year, OPEC plus its allies drastically cut output in the face of plunging demand due to Covid-19. A year on, supply curbs as a result of the production cut remain in place, though they have since eased slightly. This has forced India to review its oil import contracts and look for crude suppliers from among non-OPEC countries. In the first three months of 2021, OPEC’s share of India’s crude oil imports fell to a two-decade low of 72 percent from previous levels of around 80 percent. India’s appetite for imported crude is only expected to increase. The International Energy Agency projects that demand will grow to 6 million barrels a day by 2024, from 4.4 million barrels a day in 2017, an annual growth of 3.9 percent, much higher than the 1.2 percent global average.  

2. Gold

India imported 160 tonnes of gold worth $8.4 billion in March 2021 – a massive 471% jump year on year – before dipping slightly in April. The import surge came after the government cut the import duty on the yellow metal to 10.75 percent from 12.5 percent in February, in an attempt to boost retail demand, which had tumbled due to the pandemic. With gold prices falling in the market, as a result of the duty cut, demand picked up. A large number of weddings, many of them delayed by last year’s Covid-19 restrictions, also drove demand. With new restrictions now in place amid a deadly second wave of the coronavirus, gold imports are set to dampen in the coming months before picking up in the second half of the year. India is the second largest consumer of gold after China and one of the largest importers of the precious metal. It imports 800-900 tonnes of gold annually. Traditional suppliers include Switzerland, the US, the UAE, and Hong Kong, among others. In India, gold is a symbol of wealth, an essential part of rituals, and an investment source. Gold imports have a direct bearing on India’s current account deficit, which is the shortfall between the foreign exchange flowing in on account of exports and that flowing out due to imports.  


3. Petroleum products

Apart from crude petroleum, India imports a large variety and volume of finished petroleum products such as liquefied petroleum gas (LPG), liquefied natural gas (LNG), petcoke, and fuel oil. While LPG is used as cooking gas, the other products mostly have industrial uses, including heating and power generation. India’s petroleum products import bill was $12.4 billion in 2020-21 (up to February), down from $16-17 billion in the previous two financial years. But despite the cheaper bill, import volume has remained at around the 62 million tonnes mark. The drop in the prices of imported petroleum products is to some extent due to a fall in international hydrocarbon prices. Among the various petroleum products that are imported, LPG imports showed sharp growth in 2020-21. This was largely due to the government giving away free cooking gas cylinders to poor households as part of its Covid-19 relief package. Overall petroleum imports (crude plus petroleum products) account for 19 percent of India’s total imports.    


4. Coal, coke and briquettes

Despite having the world’s fourth largest coal reserves and being the second largest producer of the mineral fuel, India is heavily dependent on imported coal. This is primarily because domestic coal – mostly mined by state-owned Coal India Limited – is of an inferior quality. This is especially true for coking coal, which is used to make coke and is used as a raw material in the steel industry. The power sector is India’s biggest coal consumer. Other sectors dependent on coal include steel, cement, fertilisers and textiles. In 2020-21, India produced 715.95 million tonnes of coal and imported 196 million tonnes, according to the Coal Ministry. The import volume is a slight dip from previous years, when imports crossed the 200 million tonne mark. Over three-fifths of India’s coal imports come from Indonesia. Other trading partners include the US, Australia and South Africa. The government is keen on reducing its coal import bill by boosting domestic production. But importers expect demand for foreign coal to increase, citing logistical challenges in procuring domestic coal. According to the Adani Group, which handles about a third of India’s coal imports, it is easier to source coal from abroad and have it transported by sea than to depend on domestic supply, which is constrained by what it calls ‘rail transportation challenges’. With India’s coal requirement expected to touch 1,123 million tonnes by 2023 from the current 700 million tonnes, coal imports should remain robust in the coming years.  

5. Pearl, precious and semi-precious stones

Indian imports of pearls, precious and semi-precious stones peaked at $33.3 billion in 2017-18. Since then, it has dropped significantly but remains among the top 10 imports of India. The country imported $13.98 billion worth of the products between April 2020 and February 2021. Precious stones (diamonds) and semi-precious stones accounted for 97 percent of the total import value while natural and cultured pearls made up 2.25 percent. The US remained India’s largest supplier, followed by Singapore, Hong Kong, China and the UAE, among others. India is a major importer of rough diamonds, which made up 53.3 percent of its total gems and jewellery imports in 2019-20. India is also known as the world’s largest diamond cutting and polishing centre. Of every 15 diamonds produced in the world, 14 are cut and polished in India. Most of the rough diamonds imported into India are processed at its small and large diamond units, including its major diamond hub in Surat, Gujarat. A large chunk of the finished diamonds are then exported. Seventy-five percent of the world’s polished diamonds are exported from India. In 2019-20, the country exported $18.66 billion worth of cut and polished diamonds.    

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6. Electronic components

A major chunk of India’s electronic imports – which includes electronic components, consumer electronics, industrial electronics and office and telecom equipment – come from China. India’s import bill for just electronic components was INR1.15 lakh crore in 2019-20. China accounted for 37% of these imports. According to the Reserve Bank of India (RBI), foreign electronic components are a major driver of India’s electronic goods imports, having more than doubled from $5.7 billion in April-December 2016 to $11.5 billion in April-December 2018. Trade between India and China is often dictated by a long-running border dispute. In 2020, the feud turned violent with a border clash that left 20 Indian soldiers dead. In its aftermath, India walked out of the Regional Comprehensive Economic Partnership (RCEP), a mega free trade agreement backed by Beijing, and banned the use of more than 50 Chinese apps in India. It stopped short of banning the import of electronic components, given manufacturing constraints at home. However, it proposed looking at newer markets and reducing dependence on China. The World Trade Centre, Mumbai, suggested that Singapore, Malaysia, Taiwan and the US could be effective partners for electronic components.  

7. Telecom instruments

Another major contributor to Indian imports of electronic goods is telecom equipment. Its share in India’s electronic goods imports grew 10 percentage points between 2011 and 2018, according to the RBI. Most of India’s requirements for telecom gear is met by imports, says the Telecom Regulatory Authority of India (TRAI). While China is the world’s largest importer of office and telecom equipment, it is also a major supplier of the same to India. According to this report published in The Print on 1 April 2021, telephone instruments and video phones have topped the list of Chinese imports to India for the last six years, with an import value of $9.7 billion. Smartphone components have been the main driver of telecom instruments imports since 2015-16. In 2019-20, India’s smartphone component imports were valued at INR56,039 crore, 45% of it sourced from China. At the same time, mobile phone imports have declined. This is mainly due to a push for domestic manufacturing under the Make in India programme, a ban on some Chinese handsets, and the imposition of tighter quality clearances for Chinese-made telecom instruments. In 2018, TRAI recommended that India aim for zero telecom equipment imports by 2022. However, this is sure to be a tall order, what with India’s demand for electronic goods set to touch $400 billion by 2025 and domestic production capable of meeting only a third of this demand.

8. Organic chemicals

India’s most widely imported organic chemicals are heterocyclic nitrogen compounds and antibiotics (penicillin and its salts, for example). Both are important raw materials used in the pharmaceutical industry. The country depends almost wholly on China for their supply. Consider this: Indian pharma firms source 70% of the active pharmaceutical ingredients (APIs) they need to make drugs from China, which is the world’s leading producer of APIs. Furthermore, organic chemicals account for 12 percent of India’s total imports from China. India’s near-total dependence on China for these bulk drugs has caused concern in the government, which is aware that a supply disruption could lead to a severe shortage of medicines in the country. This fear was realised in the aftermath of the Covid-19 outbreak in China in late 2019. Despite these concerns, the import of organic chemicals from China has remained steadily high for the past three years, mainly because the Chinese imports are the cheapest in the world. Shifting wholly to other suppliers such as Saudi Arabia, Switzerland, Ireland, and Belgium would not be as cost-effective.  


9 & 10. Industrial machinery, electric machinery and equipment

Rounding off the list of India’s top 10 imports are industrial machinery and electric machinery and equipment. Both belong in the category of capital goods, which are essentially man-made assets used to produce goods and services. They include machinery and equipment as well as tools, buildings and vehicles. Capital goods imports in India have three major sub-sectors – industrial machinery, electric machinery and equipment, and auto and auto components. China is India’s dominant supplier of capital goods in all three sub-sectors. Its share in India’s textile machinery imports stands at 43.4 percent while the figure is 41.1 percent for agricultural machinery, 30.2 percent for food processing machinery, and 29 percent for electrical machinery. In the electrical machinery and equipment sub-sector, China’s top exports to India in the six years between 2014-15 and 2019-20 were automatic data processing machines (valued at $3.1 billion) and diodes, transistors and other semiconductor devices ($2.3 billion). China is also a major supplier of electric integrated circuits and microassemblies; transmission apparatus for TVs, cameras, cordless telephones and radiotelephony; electrical transformers, static converters and inductors; and television receivers.    

In conclusion

India’s foreign trade weighs heavily on the side of imports. This has resulted in a widening trade deficit with most trading partners, particularly China. The government is right to encourage domestic manufacturing and exports, especially in the 10 commodity groups listed above. However, its objective of reducing or eliminating imports in these sectors and more cannot be accomplished in the short term. For some time to come, India will remain dependent on imports. Also, robust imports are not necessarily bad for a country’s export ambitions. As Arvind Panagariya, economist and former vice-chairman of policy think-tank NITI Aayog, says in his book India Unlimited: Reclaiming the Lost Glory, India must be open to imports if it is to be an export powerhouse.

You may also like How to Import: A Step-By-Step Guide on the Import Process.

Editorial Team
Editorial Team
Customer success manager
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