China-India trade has come out unaffected by the political tension between the two countries. Since its relationship with the US under pressure, improved China-India trade is crucial for the Dragon. China-India trade is showing a 26% increase on a year on year basis in the first 2 months of 2018 from 20.3% year on year increase in 2017.
On Saturday, 24th March 2018, 101 China-India trade agreements, of about $2.37 billion in value, were signed by the two countries. Sectors like Black Tea, peppermint oil, castor oil and coco fibre, where India has an advantage, are a part of these agreements.
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There is a growing interest within Chinese companies regarding investment in the Indian Market. According to a report by Financial Express, a seminar on opportunities to invest in the electronics sector in India, held in Shenzhen of South China’s Guangdong Province saw an attendance of about 350 corporations.
Improving China-India trade is the first of many steps for China
This comes after US president, Donald Trump, signed a memorandum which adversely affects China’s trade with the country, by imposing $60 billion on imports from China and also put stringent restrictions on investments from China. China is now trying to offset any potential negative effects of such US policies by improving its trade relations with Asian countries.
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China is still hoping to reconnect the broken ties with the USA, as the President Trump’s policies on imposing these tariffs are not yet final and leeway and negotiations are still possible.
Border and political tension between China and India have been rising for decades, even resulting in a war in 1962. Good and smooth China-India trade relations are not only beneficial for the economies of the two countries but may also help in mending the other differences between the two countries and improving the political environment in this part of Asia.
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