WARMING UP BILATERAL TIES
Asia’s two largest economies are on Trump’s so-called “worst offenders” tariff list, and China is urging India to stand with it and make the most of their trade relationship.
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi held talks for the first time in five years last October at the BRICS summit in Kazan, Russia.
“We want India and China to compete in a healthy and natural way,” said Modi during an appearance on American podcaster Lex Fridman’s show in March, ahead of Trump’s tariff announcements.
Xi responded earlier this month, describing bilateral ties as a “Dragon-Elephant tango” as he congratulated Indian President Droupadi Murmu on the 75th anniversary of their diplomatic relations.
Experts said Chinese companies moving manufacturing to India shows how a Delhi-Beijing partnership can insulate both economies from US tariffs.
“If Trump is everybody’s challenge, then everybody is trying to look for alternatives,” said Jawaharlal Nehru University’s Singh.
LOWER TRADE BARRIERS CAN RISK OVERSUPPLY
However, India currently runs a trade imbalance with China.
New Delhi’s trade deficit with Beijing was at US$85 billion last year, up from just over US$50 billion in 2019.
Analysts say it is primarily because India relies on China for machinery and for raw materials for the pharmaceutical and electronics sector.
They added that allowing Chinese firms to invest in India could help to significantly bring that trade imbalance down.
However, there are concerns of Chinese firms dumping cheap products if trade barriers are lifted, with one report warning that India is at “high risk” of oversupply from China.
A potentially equal trade relationship could be the incentive that both New Delhi and Beijing need to keep future border skirmishes at bay.
“If we can find a way to work together, then we won’t have to worry about countries like the US threatening us,” said Gupta from the Indo-China Chamber of Commerce.
https://www.channelnewsasia.com/asia/india-china-boost-bilateral-trade-tariffs-xi-modi-trump-5059676
