The Chinese-Indian Trade Relationship
Indian Prime Minister Narendra Modi met with Chinese Foreign Minister Wang Yi on Tuesday as the two nuclear-armed Asian powers sought to strengthen ties. Wang had arrived in India a day earlier and met with Foreign Affairs Minister Subrahmanyam Jaishankar as well as National Security Adviser Ajit Doval to discuss topics such as de-escalation at the disputed Himalayan border, river sharing data and bilateral trade.
Tensions have run high between the two neighbors since 2020, when clashes erupted between troops in the Ladakh region, leaving more than 20 dead. Observers note that their warming relations may have been hastened by the concurrent cooling between Washington and Delhi, following U.S. President Donald Trump’s threat to raise tariffs on India to 50 percent over its buying of Russian oil.
As the following chart shows, trade between China and India is quite the lopsided affair. China is the bigger exporter by far, having delivered $125 billion worth of goods to India in 2023. Almost two thirds of that value was generated by electronics and other machinery. India, on the other hand, shipped goods worth approximately $18.1 billion to China that year. The biggest Indian exports to China were less lucrative raw materials including fish, crustaceans and molluscs.
India’s trade deficit with China grew by 106 percent between 2019 and 2023, having increased from around $52 billion to $107 billion in 2023. The total two-way commerce of the countries was $143.1 billion in the latter year.