RAPPROCHEMENT WITH CHINA

BEYOND THE BORDER - TRADE, COMMERCE, AND PEOPLE-TO-PEOPLE TIES

- Silveri Srishailam

The ongoing trade tensions between India and the United States have, in some ways, pushed New Delhi to continually evaluate its economic and strategic partnerships. While India values its growing ties with Washington, the friction over tariffs, visas, and technology access has highlighted the need for diversification. In this context, India-China trade relations appear even more significant, as both countries continue to be deeply linked through commerce despite political differences. For decades, news about the relationship between these two Asian giants has often been dominated by trade disputes, border clashes, diplomatic standoffs, and strategic competition. This dynamic suggests that India's balancing act between the U.S., China, and Russia will play a critical role in shaping the future of its foreign and economic policy.

India and China are two emerging superpowers in the global village. Trade is the strongest link between India and China, even when political tensions rise. China is India's largest source of imports, supplying key items like electronics, machinery, chemicals, and medical equipment, while India exports iron ore, cotton, seafood, pharmaceuticals, and growing volumes of farm products like sugar and rice. Bilateral trade now exceeds $100 billion, though the balance is tilted in China's favour, leaving India with a large trade deficit of over $60 billion. Indian industries worry about cheap Chinese goods hurting local businesses, while restrictions on Chinese investments in sensitive sectors slow down cooperation. Still, the two economies are closely connected—Indian companies depend on Chinese components, and Chinese firms look to India as a major consumer market, making trade a bridge that keeps both sides engaged despite political differences.