Can India Count On China For Trade As US Tariff Poses Risks To Manufacturers? Explained | India News

New Delhi: After changing the dynamics with the United States, India stands at a critical intersection in global trade diplomacy and China extends olive branches in the new Delhi. US President Donald Trump slapped Indian goods up to 50%, while the Trump Bonhomie, a very public mod, is now in the past.

As relations with the US are increasingly stretched, they quietly explore alternatives, including a precise reset, including China, an option that can have more strategic and economic risks than ongoing negotiations with India, Washington.

Later on this week, Prime Minister Narendra Modi is expected to visit the host city Tianjin for the 2025 Shanghai Cooperation Organization (SCO) Summit and will be introduced to Chinese President Xi Jinping, which has changed significantly in bilateral dynamics since the 2020 deadly Galwan Valley conflicts.

At that time, the anti -Chinese emotion rose. The Indian government banned several Chinese practice and tightened the DYY rules to restrict Chinese investment. India has even withdrew from the regional comprehensive economic partnership (RCEP), which was careful against Beijing’s influence in the world’s largest free trade block. The policy makers were afraid that the Indian market would be full of low -cost China imports and damaged the internal industry.

In recent years, India has manifested itself as a production alternative to China under its “China +1” strategy. However, he struggled to transform this positioning into large -scale investments competing with countries such as Vietnam, Mexico and Poland.

Despite tensions, Beijing quietly expands diplomatic emotions. According to reports, China reached India in March this year. India only responded in June. The last words of Chinese Ambassador Xu Feihong added fuel to the discussion. “The United States applied up to 50% of tariffs to India and even threatened it. China is strictly opposed to it. Silence only gives power to bullying,” he said.

Nevertheless, China’s economic re -interaction is far from simple.

India’s trade structure makes China a risky partner

It is the nature of the economy at the center of India’s dilemma. India is imported; Chinese export -oriented. This imbalance makes it a structurally deeper trade relationship. India’s exports to China are limited and are not particularly necessary for Beijing. However, China produces a wide range of affordable products, machines, electronic and industrial components that India consumes in large quantities.

As a result, India faces a trade deficit of approximately 100 billion dollars with China, while the United States maintains more than 40 billion dollars. Strengthening trade with China will probably deepen this gap, increase dependence, and make India’s domestic industries more vulnerable to lowering.

Strategic contradictions

India’s increasing harmony with Western democracies, the ambition of leading clean technology and semiconductors, and its internal political structure, is a complete contrast with China’s state -leading economy and opaque governance.

China’s long -standing military and diplomatic support to Pakistan makes it more complex. Even in recent clashes with Pakistan, Indian forces had to fight Chinese -made weapons in their enemy hands.

Global pressure and internal risk

If India seems to be very close to Beijing, it can damage its reliability as an neutral player for Western investors who want to diversify from China. Countries like Mexico apply new tariffs to Chinese imports, which are already influenced by the USA. If India is perceived as sympathy for Beijing’s trade ambitions, it may be isolated from the markets it tries to touch.

Moreover, with China’s deflation and excessive capacity, it is actively looking for new markets to evacuate excess production. India can become a primary target with its large consumer base, and although not careful, it can find itself by absorbing the overflow of cheap Chinese goods that damage the vulnerable production base.

Strategic facts and long -term risks: Big Picture

Despite the shared growth stories, India and China are divided into strategic, political and governance lines.

The hesitant to completely open India’s markets stems from structural economic weaknesses. For years, coalition politics has been accused of delaying reforms. However, even the ten -year stable single -party rule did not provide great liberalization. In fact, India’s trade stance has become more protective since 2014.

Since the US adopts a more processing and tariff -guided approach and China is trying to evacuate its excess capacity, India should carefully print. It carries risks very closely with both forces-demanding a market access, the other can fill India with exports.

At this moment of global reorganization, India’s trade elections should be directed by long -term strategic clarity, not by opportunism or short -term relief. Choosing China as a weight against Trump’s tariff regime can offer a temporary respiratory chamber, but it can come to India’s economic sovereignty at a high cost.