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China is India’s No1 trading partner again despite border fallout

China has re-established itself as India’s premier trading partner again only a few months after a deadly border dispute saw dozens die and trade deals blocked. 

New Delhi banned 220 Chinese tech apps following last June’s clashes which also left about 150 deals between the Asian rivals in limbo.

But this week, as it was revealed two-way trade between the nations stood at $77.7bn last year, India was also set to clear 45 investment proposals from China – likely, sources say, to include ones from Great Wall Motor and SAIC Motor Corp.

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And although 2020’s figure was lower than the previous year’s $85.5bn total, it was still enough to make China India’s largest commercial partner, according to provisional data from Delhi’s commerce ministry.

Most of the proposals set for early approvals are in the manufacturing sector, which is considered non-sensitive in terms of national security.

Despite efforts by India to become more self-reliant and curb trade with Beijing, it still relies heavily on Chinese-made heavy machinery, telecom equipment and home appliances.

Total imports from China stood at $58.7bn, which were more than India’s combined purchases from the US and UAE its second and third largest trade partners.


The proposals set for approval this week have been held up since last year after India tightened controls on Chinese investment in the country in retaliation against alleged Chinese troop incursions in the western Himalayan region. China blamed Indian troops for the stand-off. 

About 150 investment proposals from China worth more than $2 billion were then stuck in the pipeline. Companies from Japan and the US routing investment through Hong Kong were also caught in the crossfire.

Great Wall and General Motors (GM) made a joint proposal last year seeking consent for the Chinese automaker to purchase the US company’s car plant in India, in a deal expected to be valued at around $250 to $300 million.

Great Wall, which plans to invest $1 billion in India over the next few years, said earlier that establishing operations in the country is a key part of its global strategy. It had planned to start selling cars in India from this year, and was also mulling bringing in electric vehicles.

  • Additional reporting by Reuters

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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