Six Things to Know About India-China Economic Relations

  • China is Asia’s largest economy and the world’s second biggest with GDP of about $13.6 trillian.
  • China has been India’s biggest trading partner after the U.S.
  • 1. India- China Trade: China accounted for over 5% of India’s total export in FY 2019-20 and more than 14% of import. This means that India runs a huge trade deficit with China.
  • Chinese exports to India include smart phones, electrical appliances, capital goods like pharmaceutical raw materials,auto components, power plants, telecom equipment,chemical, plastic and engineering goods and many more
  • 2. Chinese Investments in India: FDI from China come to metallurgical industries, renewable energy electrical equipment, automotive and chemicals.
  • Oppo, Vivo, Haier, SAIC and Maida are some of the largest Chinese brands and manufacturer in India.
  • 3. Chinese Hooks in India’s start-ups: Chinese companies and fund often route their investments in India through offices located in different countries.
  • For examples, Alibaba Group’s investment in Paytm came via Ailbaba Singapore Holiday Pvt. These don’t get recorded in India’s govt. data as Chinese investment.
  • 4. The Smartphone Dominance: Chinese smartphones Oppo, Vivo, Xiaomi are market leaders in India with as estimated market share of almost 72% put together, leaving Samsung ans Apple behind.
  • Including TioTok, India saw 165% increase in app download with Chinese investment.
  • 5. India’s dependence on China for bulk drugs: India’s pharmaceutical industry is third largest in the world in volume and 14th in value. The country exported medicine worth over $14 billion to US in 2018-19.
  • But India imports 2/3rd of its active pharmaceutical ingredients and key ingredient of drug from China.
  • 6. India- China tourism: Travel between India to china has been growing and it was more before COVID-19 pandemic.

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