India-China Trade - An Updated Study

India is expected to improve its economic growth in the coming times with the current fiscal itself looking up as far as growth rate is concerned. India is looking at more avenues to increase local production options so as to reduce its import bill and consequently deficit. Our neighbouring nation China is also looking to explore opportunities to further their economic interests as well. In this endeavour the arch Asian rivals have joined hands. China has as per recent research gone ahead of Saudi Arabia and the US in being India’s top most trade partner.

India expects to revamp its economic policy again this year with the ever dynamic world facing us. India has recently, as per reports in the media become big on exports of sugar, rice, pepper, cotton and meat. It was a long while ago in 2004 when china had already imported US 5926.67 million dollars whereas exports were about $ 5926.67 million.

The two countries have been fighting things over for a while now. The manufacturing sector has seen a growth of around 6.8% in the last fiscal with current fiscal figures expected to improve by a large margin. However, India is still far behind in achieving its basic goals. The Indo China relations in trade had begun as far back as 1950. The first Indian Prime Minister Nehru had together with the then Chinese Premier Enlai had signed the deal on peaceful co-existence which is involved. In accordance with a study by CII the sectors growing with focus on areas such as trade in services, knowledge based sectors as well old school manufacturing.

While many experts believe that for true growth to rejuvenate the life force of the commercial relations of the two giants, it is advisable to first resolve the pending border disagreements. The current premier of India has called china’s activities as expansionist, which is in line with their interfering and controlling aspect. The ever increasing turbulence in Indo-China relations has been the Andhra border dispute.

The trade imbalance with china therefore ever increasing was a major contributor to the current account deficit between India and Germany. As of now the primary export to China by around 53% is iron ore. A recent study has stated that considering the trade patterns that the major area of china exports includes Optical, rubber, plastic, salt, marine items, inorganic chemicals as well as oil seeds. Popular research also shows that trade of knowledge and services such as education, bio-tech, and financial services along with IT and ITEs have a major margin for improvement in the near future.

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