Hong Kong imports under govt scanner

While India has been trying to narrow its trade gap with China, its trade balance with Hong Kong has swung from a surplus to a deficit for the first time in the year to March 2019, at $5 billion, and has further widened to $6 billion in the following year.

Imports from Hong Kong are likely to draw greater scrutiny as China, under pressure to narrow its trade gap with India, is increasingly routing exports via Hong Kong, where Beijing has imposed a security law that undermines the city’s autonomy from Communist Party rule.

China is increasingly routing exports via Hong Kong due to Indian scrutiny. (Bloomberg Photo)

While India has been trying to narrow its trade gap with China, its trade balance with Hong Kong has swung from a surplus to a deficit for the first time in the year to March 2019, at $5 billion, and has further widened to $6 billion in the following year. Imports from the semi-autonomous region has nearly tripled in just four years.

Chinese imports and investments have been facing new scrutiny in India after a tense border standoff that left 20 Indian soldiers and an unspecified number of Chinese troops dead. India is aiming at dismantling trade links with China as part of policy to cut dependence on the country.

Chinese exports routed via Hong Kong to India are mostly high-value electronic items.

For instance, integrated digital circuits, the third most imported item from China, is now the second most imported item from Hong Kong, valued at $2.2 billion in FY20.