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As trade with China grows despite tensions, Modi’s ‘self-reliant India’ dream fades
- Despite military tensions, a pandemic and calls for a boycott of Chinese goods, two-way trade has grown by over five per cent, with China leapfrogging the US as India’s largest trade partner
- That puts a question mark over Narendra Modi’s campaign for self-reliance in manufacturing, with some experts warning it’s a ‘fallacy’ to believe China’s role can be easily replaced
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Calls in New Delhi to boycott Chinese imports, a campaign to boost India’s self-reliance in manufacturing, a global pandemic and tensions along a disputed border.
With all this going on, you might expect trade between India and China to have taken a hit. But you’d be wrong.
Reversing a trend in which trade between the two countries has shrunk every year since 2017, the latest figures from the Indian Ministry of Commerce and Industry show two-way trade grew in the financial year 2020-2021 by more than five per cent.
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Not only that, but China replaced the United States as India’s largest trade partner. Trade between the two Asian economies hit US$86.4 billion in 2020-21, up from US$81.9 billion the year before, compared to US$80.5 billion between India and the US.
That’s despite India-China tensions running high since a dispute at their Himalayan border led to armed clashes and a military stand-off between tens of thousands of troops at the Line of Actual Control (LAC) separating India’s Ladakh from China’s Aksai Chin region.
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In response to the standoff, the Narendra Modi government has moved to block Chinese companies in key sectors like power and railways and restrict Chinese investment, while several of Modi’s ministers have publicly backed calls to boycott Chinese imports.
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