China
China-India Economic Relations: Exploring Trade, Investment, and Growth Opportunities
China is India’s largest trading partner, with bilateral trade exceeding $100 billion in 2023-24. Key exports include organic chemicals and cotton, while imports are dominated by electronics and machinery. Both countries aim to enhance collaboration and attract investment amid fluctuating foreign direct investment trends.
Economically, China is India’s largest trading partner, with bilateral trade crossing US$100 billion in the 2023-24 financial year. China remains a vital supplier of industrial goods to India, particularly in electronics, machinery, and chemicals. The growing demand for Chinese technology and investment, especially in sectors like electric vehicle (EVs) and telecommunications, highlights the deep economic ties between the two countries. At the same time, India is actively seeking to attract Chinese companies to set up local manufacturing through new joint ventures in key industries.
In this article, we explore the evolving trade and investment relations between China and Indian and the potential for future collaboration across various sectors.
The growth in trade occurred amidst continued high-level interactions between the two nations, including a sideline meeting between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping. While direct flights and full diplomatic appointments remain unresolved, the two sides have shown a commitment to stabilizing relations, with hopes for further cooperation and investment in the coming year.
According to the United Nations COMTRADE database, in 2023, India’s main exports to China were valued at US$16.25 billion. These exports included key sectors, such as organic chemicals, mineral fuels, ores, cotton, and copper.
Meanwhile, India’s total imports from China reached US$16.25 billion, reflecting in particular the critical role of Chinese goods in India’s industrial supply chain. On the import side, India’s imports from China in 2023 were dominated by electrical and electronic equipment, followed by machinery and nuclear reactors. Organic chemicals, plastics, and optical, photo, technical, and medical apparatus also featured prominently.
Investment flows between India and China have experienced notable fluctuations in recent years. According to Statista, foreign direct investment (FDI) from China to India reached approximately US$279.46 million in 2021, down from US$534.60 million in 2019 and US$205.19 million in 2020. The peak of Chinese FDI in India occurred in 2015, amounting to US$705.25 million.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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