February 23, 2021

Andrew Campbell 

A preliminary report released from India’s Commerce Department, the bilateral trade between China and India topped at US$77.7 billion in 2020 followed by the US's US$75.9 billion. Despite Himalayan border dispute between these two long standing economic and strategic rivals, also amid muted demand for goods in the middle of the coronavirus pandemic, India received imports from China at US$58.7 billion in 2020. New Delhi also managed to increase its exports to China at US$19 billion.

With the rising military standoffs between China and India since May 5, 2020, troops of two rivals have engaged in several aggressive melee, face-offs and skirmishes at locations near the border of Pangong Lake in Ladakh and the Tibet Autonomous Region, and near the border between Sikkim and the Tibet Autonomous Region. Media reports revealed a number of deaths and casualties of Indian and Chinese soldiers involved in a melee fighting. Territorial tensions soon impacted trade between India and China for some Indian campaigns boycotting Chinese products.

In 2020, heavy machinery imports accounted for 51% of India’s purchases from China. While Prime Minister Narendra Modi strongly promotes a so-called production-linked incentive program, or PLI, to favor local manufacturing, Senior Research Fellow and Research Lead (Trade and Economics) at the Institute of South Asian Studies, National University of Singapore, Amitendu Palit, specializing in comparative economic studies, international trade and investment, political economy and public policies, described India has a long way to cut off its reliance on China.

Photo:Webshot.