India-China Trade Relations, Border Disputes, Related Concerns

India China bilateral trade reached a record US$136.2 billion in the year 2023. Check here all about India-China Trade Relations, Border Disputes and Related Concerns.

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Context: India China bilateral trade reached a record US$136.2 billion in the year 2023.

India-China Trade Relations

Bilateral Trade: Bilateral trade between India and China reached US$136.2 billion in 2023
- Both countries have expanded economic ties, with India becoming one of the largest markets for “project exports” from China.
Investments: According to the ministry of commerce & industry, China stands at 20th position with only 0.43% share or $2.45 billion total FDI equity inflow into India during April, 2000 to December, 2021.
- Chinese investments in India and Indian investments in China have been increasing, particularly in sectors like IT, pharmaceuticals, and automobiles.
Economic Potential: With a combined market of over 2.7 billion people and a GDP representing 20% of the world’s total, there is immense potential for further economic cooperation between India and China.

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What are the concerns related to India China Relations?

Border Disputes

Western Sector: The Aksai Chin region is a territorial dispute where both countries claim it as part of their own territory.
Middle Sector: China stakes claim over an area in Uttarakhand, creating a border dispute.
Eastern Sector: The McMahon Line, the boundary between India and Tibet, is disputed by China.
Johnson Line vs. McDonald Line: India and China hold different positions on the demarcation of the border.
Doklam Standoff: The Doklam/Doka La region dispute between China and Bhutan, with India’s military and diplomatic support to Bhutan, has led to tensions in the area.
Galwan Valley Standoff:The deadly clash between Indian and Chinese troops in the Galwan Valley, resulting in casualties, highlights the ongoing border tensions and the need for de-escalation efforts.

Water Dispute: China’s construction of dams in the upper reaches of the Brahmaputra River (Tsangpo) without a formal water-sharing treaty poses a threat to India, leading to concerns over water availability and flooding.
Dalai Lama and Tibet: China accuses India of fomenting trouble in Tibet due to the presence of the Dalai Lama and protests staged by Tibetans against China in India and other countries.
Arunachal Pradesh and Stapled Visa: China issuing stapled visas to residents of Arunachal Pradesh questions India’s sovereignty and territorial integrity.
Bhutan and Nepal: China criticises India’s role and relationship with Bhutan and Nepal, attempting to influence their ties and play the “China card” against India.
Belt and Road Initiative: India opposes China’s Belt and Road Initiative (BRI), particularly the China-Pakistan Economic Corridor (CPEC), which passes through Indian territory claimed by Pakistan.
China-Pakistan Nexus: China’s support to Pakistan in military, nuclear, and missile capabilities, along with blocking India’s efforts at the UN, creates concerns for India’s security.
Indian Ocean Region: China’s increasing presence, including military outposts, port acquisitions, and economic influence in countries like Sri Lanka, Bangladesh, and Myanmar, raises concerns for India’s traditional influence in the region.
- String of Pearls: China’s strategic presence and infrastructure development in various countries surrounding India, such as Sri Lanka, Pakistan, the Maldives, Bangladesh, and Myanmar, raise concerns about encirclement.