NEW DELHI (India) – Concerned by escalating trade war standoff with the U.S, China is eyeing close relationship with India as it continues to explore new ways of offsetting any losses that may come into being. The country has come under immense pressure in recent months on the Trump administration imposing import tariffs as it seeks to offset the $375 billion trade tariffs.

China India Push

China is aggressively looking for new trading partners as an insurance policy in case its trade standoff with the U.S gets out of hand. India has since emerged as a worthy partner given that it boasts one of the largest economies in the world growing at an impressive rate.

Docks of Jawaharlal Nehru Port (Mumbai), the largest container port in India. Photo by: Robert Cutts.
Docks of Jawaharlal Nehru Port (Mumbai), the largest container port in India. Photo by: Robert Cutts.

“It essentially has an insurance policy”. China is probably thinking that, “we don’t know how things will pan out with the U.S., but in the meantime, China should see what’s best for ourselves,” said Song Seng Won, an economist with the CIMB in Singapore.

Trade Deficit

However, a trade relationship with India won’t be a walk in the park. Narendra Modi administration has already raised its fair share of concerns about the country’s own trade deficit with China. India’s trade deficit with China stood at a whopping $51 billion as of last year.

The fact that China knows its trade practices with India are imbalanced all but raises the stake for it to make some changes all in the effort of building close ties. India officials, however, remain skeptical about China’s latest push given that it continues to undermine the country’s manufacturing sector by dumping cheap subsidized goods while importing raw material.

China exports to India are mostly made’ up of electronics, machines, and chemicals. In return, it only imports raw materials made up of cotton copper and other precious metals. The big question now is whether China is serious about tweaking its trade practices to be able to accommodate new partners such as India as trade tension with the U.S escalates.


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