Mutual need doctrine: Why India holds the cards with China and the US

India stands at a crucial point in its economic journey, poised to leverage its vast market and strategic heft to fuel growth.

- ABHINANDAN MISHRA

The most important point in strengthening India's economy is that India, as one of the world's largest markets, is more crucial to both China and the U.S. than they are to India.

Among the many pathways forward, Chinese investment is a contentious yet promising avenue, something which has become an untouchable topic post-Galwan 2020. However, the time has come to take lessons learnt from and after Galwan, and move ahead and allow Chinese money into the Indian market.

Chinese capital could bolster the Indian economy, invigorate its markets, and enrich its consumers. This is not mere optimism—it's grounded in economic logic.

Indian policy makers need to adopt a brave view, and move beyond the blanket ban which is driven by geopolitical mistrust and fears of dependency.

India needs Chinese investors, just as it needs American technology and a regulated approach with smart restrictions can unlock significant benefits.

Crucially, Delhi needs to realize that it's not a one-way street—China and the U.S. need India's market and geopolitical weight just as badly, creating a symbiotic dynamic that India should use to its advantage.

The case for Chinese investment in India is compelling. First, it promises an infusion of capital that could turbocharge economic growth and provide jobs. Lack of jobs is the pandemic that is waiting to happen.

With a trade deficit hovering around $85 billion with China, inviting Chinese firms to invest directly—rather than just export—could shift the balance. Companies like Xiaomi and Oppo have already demonstrated that they can set up manufacturing units that create jobs and produce goods locally, reducing import reliance.

Second, Chinese investment brings new products to Indian consumers, enhancing choice and quality of life. From affordable smartphones to cutting-edge appliances, these innovations can reshape daily living.