The trade between India & China has been increasing at rapid rate since the beginning of this century. This propelled China to emerge as India’s largest goods trading partner by the year 2008. Ever since 2008 China continues to be India’s no. 1 trading partner. The bilateral trade between the two countries has recorded exponential growth. In 2011, bilateral trade reached US$ 73.9 billion, before dipping to US$ 66 billion in 2012 and rebounding to US$ 71.65 billion in 2015. However, with tensions on the border increasing in the recent past the relationship between the two countries has become fraught. After the ongoing violent stand-off between China and India in Ladakh’s Galwan Valley, the relationship between the two countries is likely to come under pressure. Let us look at trade between the two countries in recent years.
India China Bilateral Trade
|India China Bilateral Trade
( Figures in $ Bn)
|Year||India’s Export to China||%Change||India’s Import from China||%Change||Trade Imbalance||Total Trade||%Change|
Bilateral investment growth between the two countries has not been growing with the same pace as trading volumes between the two countries. Both countries have emerged as top investment destinations for the rest of the world, mutual investment flows are yet to catch up. The Chinese investments in India between January-September 2019 were around US$0.19 billion and Cumulative Chinese investment in India till the end of September 2019 amounted to US$5.08 billion. Cumulative Indian investment in China until September 2019 is US$ 0.92 billion.
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Banking Sector Cooperation
Indian Banks in China: Numerous Indian banks have established their presence in the Chinese Mainland over the last few years. The State Bank of India is the only Indian bank that has the authorization to conduct local currency (RMB) business at its branch in Shanghai, whereas the branches of other banks conduct their business in foreign currency.
Chinese Banks in India: In the year 2011, the Industrial and Commercial Bank of China(ICBC) secured a license to start banking operations in India. Industrial and Commercial Bank of China (ICBC) inaugurated its Mumbai branch on September 15, 2011. This was the first branch of a mainland Chinese bank in India. In July 2018 Bank of China (BoC) also received the banking license from RBI. ICBC has also applied for its second branch in New Delhi. It is under consideration with the Department of Financial Services.
Tourism & Films
China has the world’s largest outbound tourism industry. In 2018, over 140 million outbound tourists traveled all over the world. Tourism to India is still below potential. In 2018, around 225,000 Chinese tourists visited India. The renewal of the bilateral MoU on Cooperation in Tourism Sector was completed in May 2015. In 2018, Minister of State for Tourism visited China in August 2018 and held roadshows in Beijing, Wuhan, Guangzhou and Shanghai.
In 2015 2 Indian movies (PK and Dhoom3) were released in China. “Xuan Zang” was the first co-production film between India and China. This film released in 2016 was submitted as a contender to represent mainland China for Best Foreign Language Film at the 89th Academy Awards in 2017. In recent years, numerous Indian movies have registered great success at the Chinese box office.
Indian Companies in China
With the growth in bilateral trade between India and China in the last few years, numerous Indian companies have started setting up operations in China. Some of the prominent Indian companies that function is China are Aurobindo Pharma, Dr. Reddy’s Laboratories, Matrix Pharma, Bharat Forge, Infosys, TCS, APTECH, Wipro, Mahindra Satyam, Dr. Reddy’s, Essel Packaging, Suzlon Energy, Reliance Industries, SUNDARAM Fasteners, Mahindra & Mahindra, TATA Sons, etc.
Chinese Companies in India
A huge number of Chinese companies have established their offices and are operating in India. A large number of Chinese state-owned companies in the field of machinery and infrastructure construction have won projects in India and have opened project offices in India. These companies include Sinosteel, Shougang International, Baoshan Iron & Steel Ltd, Sany Heavy Industry Ltd, Chongqing Lifan Industry Ltd, etc. Several Chinese electronic, IT and hardware manufacturing companies are also operating in India. Huawei Technologies, ZTE, TCL, Haier etc. all are operating in India. Today, Chinese mobile handset companies occupy almost 50% of the Indian mobile handset market.