Sino-Indian trade ties improving despite frosty political relationship
With US protectionist measures on the rise and amid escalating fears of trade wars, India and China have been looking at ways to boost trade ties.
India’s Commerce Minister Suresh Prabhu and his Chinese counterpart Zhong Shan met in New Delhi this week for a joint economic group meeting, as India strives to address the trade imbalance between the two countries. Bilateral trade between the countries grew to $71.42 billion in the financial year to the end of March 2017 from $70.17bn in the previous year, according to the Indian government. India’s trade deficit with China stood at $51bn.
“A commodity which could be exported from India to China is high-quality pharmaceutical products,” said Mr Prabhu in a statement issued by the government, highlighting ways in which India could narrow the deficit.
“Export of India’s IT and IT-enabled services to China and co-operation in the sectors of tourism and health care need to be focused on.”
China, meanwhile, has been increasing its investments in India.
Tencent led a $1.4bn investment into Flipkart, India’s major e-commerce marketplace, while Chinese internet major Alibaba has invested $177 million into Indian online technology company Paytm.
Chinese smartphone brands including Xiaomi have been expanding their manufacturing facilities in India. China is now looking at developing industrial parks in India, where Chinese companies could manufacture products.
This comes as an HSBC survey recently revealed that Indian companies are the most concerned about rising protectionism. “The survey
data shows that almost nine in 10 businesses in India feel that governments are turning increasingly protectionist, leading to a rise in the cost of doing international business, altering trade routes and raising hurdles to obtaining trade finance,” according to HSBC.
The strengthening economic ties between India and China are emerging despite the fact that India and China’s political relations have long been frosty, largely because of disputes over borders.