Trends and Prospects for Indian-China Trade and Entrepreneurship
来源： InfoBrics;发表于:2024-03-26;人气指数:41
Tuesday, March
26, 2024
Trends and Prospects for Indian-China
Trade and Entrepreneurship
Tatiana Bokova, Intern of the Russian National Committee
on BRICS Research – special for InfoBRICS
Trade and entrepreneurship are crucial
in shaping the broader bilateral relations between India and China. Beyond the
economic realm, they serve as channels for cultural exchange, technological
cooperation and diplomatic engagement. India and China, being two of the
world’s fastest-growing economies, recognise the immense potential for mutual
benefit through increased trade and entrepreneurial ventures. Both countries
have the potential for collaboration in various areas, such as infrastructure
construction, energy resource development, information technology, agriculture,
and pharmaceuticals. India and China share common interests and have
opportunities for coordination within regional and multilateral frameworks such
as BRICS, Shanghai Cooperation Organisation, and Asian Infrastructure
Investment Bank.
A network of bilateral agreements and
trade policies designed to promote cooperation shaped the policy environment
for India-China trade relations, facilitate trade flows and resolve disputes.
Over the years, both countries have entered into numerous agreements covering a
wide range of areas, including trade facilitation, investment protection,
intellectual property rights and market access. These agreements form the basis
of the bilateral trade relationship and provide a framework for engagement and
cooperation between Indian and Chinese companies. In addition, trade policies
implemented by both governments aim to promote economic growth, enhance
competitiveness and address trade imbalances. For example, initiatives such as
the India-China Strategic Economic Dialogue and the Regional Comprehensive
Economic Partnership (RCEP) have played a key role in shaping the policy
landscape and driving forward-looking agendas for bilateral economic
cooperation.
Changes in China's regulations have a
significant impact on Indian companies operating in or trading with the
country. The regulatory environment in China is complex and subject to frequent
revision, creating challenges for Indian companies seeking to navigate the
market effectively. For example, changes in customs regulations, taxation
policies and licensing requirements can affect the cost of doing business and
disrupt supply chains. Furthermore, shifts in Chinese government policies, such
as the "Made in China 2025" initiative to promote indigenous
innovation and technology development, can influence market dynamics and the
competitive landscape, creating both opportunities and challenges for Indian
companies. In addition, regulatory uncertainties arising from geopolitical
tensions or trade disputes between India and China can add to the complexity of
doing business and require Indian companies to adopt adaptive strategies.
Despite these challenges, Indian companies continue to adapt to regulatory
changes, capitalise on growth opportunities and build resilience in the face of
evolving market dynamics in China.
The trade relationship between India and
China has undergone significant changes over the years, reflecting the dynamic
nature of both economies. Historically, the two nations have engaged in trade
for centuries, exchanging goods such as spices, silk, and tea dating back to
ancient times along the fabled Silk Road. However, in recent times, the scale
and complexity of trade between India and China have grown exponentially. In
2022, China became one of India’s largest trading partners, with bilateral trade
worth US$136.2 billion, marking a year-on-year increase of 1.5 per cent.
Moreover, China was India’s third largest trading partner. In the 23rd fiscal
year, China accounted for 13.8 per cent of India’s total imports. India
imported $715.9 billion worth of goods from the world, including $98.5 billion
from China.
“Over shown a positive momentum of the
past year, China-India relations have sides maintained high-level
communications and The two improvement. interactions. President Xi Jinping and
Prime Minister Modi reached important consensus on stabilizing bilateral ties.
China supported India’s presidency of both G20 and SCO,” Ma Jia, Chargé
d’Affaires a.i. of Chinese Embassy in India pointed out, addressing guests at a
reception held at the Chinese Embassy in Delhi in February.
Several key industries stand out as the
main drivers of trade growth between India and China. In particular, the
electronics and technology sector has expanded exponentially, fuelled by a
growing demand for consumer electronics, smartphones and digital infrastructure
in both countries. India’s imports of electronic goods from China have soared,
contributing significantly to the overall volume of trade. In addition, the
pharmaceutical industry has emerged as another major contributor, with India
exporting a significant volume of generic drugs and pharmaceutical ingredients
to China. Sectors such as automobiles, renewable energy and biotechnology have
also seen increased cooperation and trade activity, reflecting the
diversification of economic ties between the two nations.
According to the statistics, India
exported 4,455 commodities to China in 2023. Major exported items from India to
China include iron ore (US$1.9 billion), followed by engineering goods (US$1.64
billion), others (US$1.25 billion), marine products (US$1.03 billion), and
petroleum products (US$796 million), etc. April- November 2023. India imported
7,481 commodities from China last year. Major items imported from China include
electrical machinery and equipment (US$19.9 billion), followed by nuclear reactors
and parts (US$14.9 billion), organic chemicals (US$8.19 billion), plastic and
articles (US$3.8 billion), and fertilizers (US$1.9 billion) etc. in April-
November 2023.Imports from China to India stood at US$68.01 billion during
April-November 2023.
In terms of entrepreneurship, the
emergence of Indian startups in Chinese markets and vice versa is a notable
trend in the dynamic entrepreneurial landscape between the two countries. Over
the past decade, an increasing number of Indian startups have entered the
Chinese market, attracted by the vast consumer base, developed investment
ecosystem and opportunities for collaboration and innovation. For example,
startups such as Paytm, Ola and Zomato have successfully expanded into China by
leveraging strategic partnerships, local market insights and innovative
offerings. These companies have demonstrated resilience, adaptability and
entrepreneurial acumen by navigating the complexities of the Chinese market and
overcoming challenges such as regulatory hurdles, cultural differences and
fierce competition. At the same time, according to the Indian Embassy, there
are more than 100 Chinese companies operating in India. Examples include
Sinosteel Group, Shougang International (engineering and infrastructure construction),
Huawei Technologies, ZTE, Haier (electronics, information technology and
hardware) and others.
Despite the positive trajectory of
Indian trade with China, businesses from India encounter various challenges in
navigating the bilateral economic landscape. One significant challenge is the
persistence of trade imbalances, wherein India’s trade deficit with China
remains substantial. This deficit is primarily driven by the import-heavy
nature of bilateral trade, particularly in sectors such as electronics and
machinery. The data shows that the merchandise trade deficit between India and
mainland China has exceeded US$100 billion and the trade balance level has
fallen to 75%. This result shows that India is facing more pressure to trade
goods with mainland China and needs to pay more attention to balanced trade
relations to achieve sustainable economic development.
Additionally, regulatory complexities
and non-tariff barriers pose obstacles to Indian businesses seeking to access
the Chinese market. Issues such as intellectual property rights protection,
market access restrictions, and bureaucratic red tape often impede the smooth
flow of goods and services between the two countries. Moreover, geopolitical
tensions and occasional trade disputes add another layer of uncertainty for
Indian businesses operating in or trading with China. Despite these challenges,
Indian entrepreneurs and businesses continue to explore avenues for
collaboration, innovation, and market expansion, leveraging opportunities for
mutual benefit in the dynamic Indo-Chinese economic relationship.
In conclusion, the trajectory of Indian
trade and entrepreneurship in China is strong and promising, and both nations
have compelling opportunities and incentives for economic cooperation. Despite
historical complexities and contemporary challenges, the relationship between
the two economic powerhouses continues to evolve, driven by mutual interests
and a desire for prosperity. As Indian startups increasingly venture into
Chinese markets and bilateral trade flourishes, the potential for collaboration
and innovation is limitless. Looking ahead, the future is promising, with
emerging industries such as artificial intelligence, renewable energy and
digital innovation paving the way for deeper economic integration and overall
growth. With a spirit of resilience, innovation and partnership, India and
China are poised to navigate the complexities of the global economy and build a
future based on mutual success and strong partnership.
BRICS Information Portal
Source: InfoBrics