Introduction
India-China trade deficit has long been a sore point in bilateral relations. Despite the imbalance, China now wants to import more Indian goods. But there’s a catch—it also seeks “non-discriminatory treatment” for Chinese firms in India. Here’s what this could mean for Indian exporters, and whether the opportunity is truly as promising as it sounds.
Why Does the India-China Trade Deficit Matter?
- India imported $101.7 billion worth of goods from China in FY24
- Exports to China stood at only $16.7 billion
- The trade deficit is over $85 billion, the highest with any single country
Source: DGFT, Ministry of Commerce (2024 data)
This gap isn’t just about numbers. It impacts India’s manufacturing ambitions, job creation, and even geopolitical leverage.
What’s China Offering Now?
Ambassador Xu Feihong has said:
“China is ready to open its vast market to more Indian products.”
However, he also asked India to:
- Speed up visas for Chinese businesspeople
- Avoid what he called “unfair treatment” of Chinese companies
- Build a non-discriminatory business environment
This move comes even as several Chinese apps and companies continue to face restrictions in India post-2020 border tensions.
Sectors Where India Can Push Exports
If India negotiates strategically, certain sectors could benefit:
| Potential Export Sector | Why It Matters |
|---|---|
| Pharmaceuticals | India is a global pharma hub |
| Agricultural Products | High demand, especially spices & rice |
| IT and Digital Services | India has skilled capacity, strong base |
| Auto components | China lacks some advanced precision parts |
| Engineering Goods | Rising demand in Chinese infra projects |
What India Should Demand in Return
Before welcoming any new offers, India must ensure safeguards:
- Clear market access timelines
- Mutual standards and compliance recognition
- Dispute resolution mechanism through trade channels
- Digital data protection where Indian firms operate in China
“India shouldn’t rush into this. Trade reciprocity should be non-negotiable,” says a Delhi-based trade policy advisor.
Legal and Policy Angle
- India’s scrutiny of FDI from border countries (April 2020) still stands.
- Companies from China need government clearance for investment—ensuring national security compliance.
- Customs delays and restrictions on certain Chinese imports are still in place post-Galwan.
➡️ Reference: DPIIT FDI policy press note
Key Takeaways for Indian Businesses
- Watch policy shifts—government-to-government negotiations will impact access
- For exporters, sector-specific incentives could emerge soon
- Don’t ignore regulatory risk: any changes will be closely tied to national security