Mapping Hot And Cold India-China Relationship — From Trade To Border Clashes
India’s trade deficit with China has continued to widen over the years despite rising trade volumes. In fact, China accounts for the largest single trade deficit India is running with any country.
In 2020, as the world grappled with the Covid pandemic, India was struck by a double whammy. In June that year, violent clashes broke out between Indian and Chinese forces in the Galwan Valley of Ladakh.
In the first deadly military conflict between the two countries since 1975, at least 20 Indian soldiers and four Chinese soldiers lost their lives.
The conflict erupted over two tents and observation towers, built on India's side of the border, that were set on fire by its troops after being discovered during patrol. The situation escalated as 900 troops on both sides engaged in hand-to-hand combat .
The mistrust ran so deep that neither country had fully withdrawn their soldiers from the conflict zones on the border until last year.
Five years on, the tide appears to be turning, as both countries explore a full 'reset of ties' after US President Donald Trump slapped steep tariffs on India and China earlier this month. According to reports, both countries have agreed to set up an expert committee to examine the demarcation of disputed border areas.
This could mark a significant step forward in Indo-China relations, especially because of the tumultous past— from China flouting the Panchsheel Agreement which ultimately resulted in the 1962 war, to present-day disputes over parts of Ladakh and Arunachal Pradesh.
Trade Over The Years
According to trade data released by Department of Commerce, Ministry of Commerce and Industry, India’s trade deficit with China has continued to widen over the years despite rising trade volumes. In fact, China accounts for the largest single trade deficit India is running with any country, as per Embassy of India.
The problem is not only the huge size of the deficit, but also the growing imbalance. While things seem to be progressing in the right direction, only time will tell how much and in what ways (if any) India will benefit from a reset of ties.
