India Edges Out China in Export Dependence, DHL Report Says
A recent report by DHL and New York University’s Stern School of Business highlights a shift in the trade landscape between India and China. The report, titled “New DHL Global Connectedness Report 2024,” reveals that India’s export-to-GDP ratio has surpassed China’s since 2021.
This metric signifies a greater reliance on exports relative to the overall size of the economy. The report credits India’s strong showing in the services sector, where its trade intensity for both exports and imports outpaces China’s.
Here’s a breakdown of the key findings:
- Exports as a Share of GDP: India’s exports of goods and services reached 23% of GDP in 2022, compared to 19% in 2020. China, on the other hand, continues to hold a larger absolute export volume.
- Services Trade: India boasts a significant advantage in services trade, a sector that has witnessed sharp growth in recent years. This contributes to the higher export-to-GDP ratio.
- Merchandise Trade: While India excels in services exports, China maintains a lead in merchandise trade (physical goods) relative to its GDP.
Experts believe this trend reflects India’s growing integration into the global market, particularly in the services sector. The rise of the digital economy and India’s large, young workforce are seen as key drivers.
It’s important to note that this is a recent development, and China’s overall trade volume remains larger. However, India’s performance suggests a potential shift in trade dynamics between the two Asian giants.