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.
Beyond trade, India has extended support to China on several international platforms, yet the relationship has also faced serious setbacks. In this context, it is essential to examine the India–China equation not only through the lens of conflict but also through the opportunities for cooperation.
Investments reflect another side of India–China ties. Chinese companies have invested heavily in Indian startups, especially in technology and e-commerce, supporting firms like Paytm, Ola, and Byju’s before restrictions were introduced in 2020. Some Chinese firms have also worked in India’s power and construction sectors, bringing in technology and expertise. On the other hand, Indian IT companies such as Infosys and TCS have entered the Chinese market, focusing on software services and outsourcing. Though political issues sometimes slow cooperation, business groups on both sides continue to stress that growth is better served by partnership than rivalry.
The world’s most significant bilateral engagements are complex, consequential, and deeply rooted in civilisational depth. One of the most influential yet less discussed aspects of India–China relations is the bond between people. Thousands of Indian students study in Chinese universities, especially in medicine, and many return as trained doctors to serve in India. Before the pandemic, tourism and cultural exchanges were growing—yoga, Indian dance, and cuisine found popularity in China, while Chinese martial arts, calligraphy, and festivals attracted Indians. Bollywood films like Dangal and Secret Superstar even earned more in China than in India. Universities and think tanks also promote dialogue through academic exchanges and joint programs. Though smaller in scale compared to border disputes, these human connections build trust and goodwill, reminding both nations that beyond politics, ordinary people share similar hopes and challenges.
It is true that China remains one of India’s largest trading partners, with bilateral trade reaching USD 118.4 billion in 2023–24. In recent years, India and China have also tried to work together in areas beyond trade. As two of the world’s largest emitters of greenhouse gases, both countries share interests in renewable energy, green technologies, and climate talks. Regional projects like the Bangladesh–China–India–Myanmar (BCIM) corridor were once discussed to improve trade and connectivity. The COVID-19 pandemic further highlighted the need for cooperation in public health, where India’s and China’s strong pharmaceutical industries can complement each other in vaccine research and production. On the global stage, both are active members of groups such as BRICS and the Shanghai Cooperation Organisation (SCO), where they engage on issues of trade, security, and global governance. These efforts show that their relationship is not limited to commerce but also extends to tackling wider global challenges together.
Despite positive steps, India and China actively engage in multilateral fora such as BRICS, SCO, G20, and the Asian Infrastructure Investment Bank (AIIB). The universe of serious challenges continues to strain India–China relations. The border dispute along the Line of Actual Control (LAC) remains unresolved, and the 3,488-km-long LAC remains undefined, with frequent incursions and infrastructure buildups on both sides. With clashes like the 2020 Galwan Valley incident showing how fragile peace can be, strategic rivalry is also strong, as both countries compete for influence in South Asia and the Indian Ocean. A deep trust deficit exists, with negative public opinion and media focus on conflict rather than cooperation. The large trade imbalance further fuels concern in India, where industries push to reduce dependence on Chinese imports. India’s smartphone market is heavily dominated by Chinese companies, which together hold nearly 75% of the market share. Despite restrictions and bans, India’s electric vehicle and telecom sectors continue to depend on Chinese technology and batteries. Meanwhile, India’s push for semiconductor self-sufficiency faces major hurdles due to limited technical expertise and the absence of a strong manufacturing ecosystem. Adding to this challenge is the lack of a robust regulatory framework for digital hardware imports, leaving critical infrastructure exposed to potential risks and disruptions. These realities make it clear that rapprochement will not be easy, as political and strategic differences cannot be ignored.
Trade has emerged as the strongest bridge between the two nations. China is one of India’s largest trade partners, supplying critical goods such as electronics, machinery, and medical equipment, while India exports iron ore, cotton, pharmaceuticals, and agricultural products. Regular political and diplomatic dialogue is essential to avoid misunderstandings, while efforts to reduce trade imbalances by boosting Indian exports can make economic ties fairer. Expanding student exchanges, tourism, and cultural programs will help build trust at the people-to-people level. On global issues like climate change, energy security, and public health, both sides can cooperate without the weight of political disputes. Most importantly, confidence-building measures on the border—through ongoing military talks, disengagement agreements, and peacekeeping efforts along the LAC—are crucial to prevent future clashes. Rapprochement does not mean forgetting history or disputes, but creating a balanced relationship where competition and cooperation can exist side by side.
India and China are two of the world’s biggest countries, together home to one-third of all people. They have shared cultural and trade links for centuries, and even today their economies remain closely connected. China is one of India’s largest trading partners, while Indian exports to China are also growing. Business ties, student exchanges, tourism, and the popularity of films, food, and traditions from both sides help people understand each other better. On global issues like climate change, renewable energy, and public health, both countries work together in groups such as BRICS and the SCO. Though challenges like border disputes and trade gaps remain, the future can be brighter if both sides keep talking, trade more fairly, and build trust. The relationship is not just about problems—it is also about the chance to create peace, prosperity, and progress for both nations.
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