WITH SOME dialling down of tensions between India and China along the border, policy makers are more open to upgrading bilateral economic relationships now.

Stay tuned fIndia Eases Trade Barriers: Boosting China Ties Amid US Tariffs

India is shifting its trade policies, opening doors to Chinese investments while countering US tariff pressures. The government is making strategic moves to balance economic interests.

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Why the Change?

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As tensions with China ease, the US is pushing India to lower tariffs. This shift is driving policymakers to reconsider trade restrictions imposed on Chinese businesses since 2020.

What’s Changing?

India plans to relax trade barriers, including lifting some import bans, easing visa policies for Chinese professionals, and reconsidering restrictions on certain Chinese apps.

Rising Trade Deficit Worries

India’s trade imbalance with China is massive. In Financial year 24, bilateral trade hit $118.40 billion, with imports from China exceeding $101 billion while exports lagged significantly.

Investment Over Imports?

Despite large trade volumes, Chinese investments in India remain minimal. India may allow selective investments, encouraging joint ventures where Chinese firms hold minority stakes.

Sending a Message to the US

Strengthening economic ties with China could provide India leverage in trade negotiations with Washington. While the US pressures India on tariffs, New Delhi may counterbalance by easing some restrictions on Chinese trade.

Industries That Stand to Gain

Indian businesses, particularly small and mid-sized enterprises, are advocating for relaxed trade rules. Key beneficiaries could include infrastructure, electronics, and tech industries.

What’s Next?

Policy announcements are expected soon. While complete normalization of trade is unlikely, strategic relaxations seem inevitable. The focus remains on strengthening India’s economy while staying competitive in global markets.

Potential Challenges Ahead

Not all industries support these changes, fearing increased competition from Chinese firms. Some experts argue that India must ensure fair trade practices to protect domestic businesses.

Security concerns remain a key issue, as past restrictions were imposed due to geopolitical tensions. The government must balance economic gains with national security priorities.

Experts suggest that India should also push for better access to the Chinese market. Indian exporters face multiple non-tariff barriers in China, limiting trade opportunities.

Stronger trade ties could encourage Chinese firms to manufacture in India, boosting local production and jobber updates on this critical trade shift!

for more-https://indianexpress.com/article/business/economy/us-tariffs-looming-india-looks-at-easing-non-trade-barriers-relaxing-chinese-fdi-9902293/?ref=hometop_hp