Calibrating India's Economic Engagement Strategy with China Amidst the Changing Geopolitical Landscape

Nisha Taneja (), Snajana Joshi (), Vasudha Upreti () and Nirlipta Rath ()
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Nisha Taneja: Indian Council for Research on International Economic Relations (ICRIER)

Indian Council for Research on International Economic Relations (ICRIER) Policy Paper from Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India

Abstract: The trajectory of India-China economic engagement, rooted in a legacy of complex geopolitical ties and asymmetrical economic relations, now stands at a critical juncture amid a changing global order. In this context, Indian Prime Minister Narendra Modi's upcoming visit to China for the Shanghai Cooperation Organisation (SCO) summit carries considerable strategic significance. The thaw in India-China relations offers a timely opportunity to address existing economic imbalances to foster a more balanced engagement along with reducing external vulnerabilities. Amid these shifting global realities, this policy brief explores three key questions: (i) How can India enhance and diversify its exports to China? (ii) What strategies can reduce its import dependence on China? and (iii) How can Chinese FDI be increased with appropriate guardrails? Drawing on an analysis of export trends and untapped potential, patterns of import dependence, and the evolving trajectory of Chinese investment in India, the policy brief identifies policy pathways to enhance export competitiveness, reduce vulnerabilities from concentrated imports, and channel FDI with appropriate guardrails strategies. It also emphasises the need for stronger institutional mechanisms to address non-tariff barriers and product standards. Together, these measures aim to foster a more balanced, secure, and resilient economic partnership between India and China.

Keywords: India Exports; US Tariff Shock; Sectoral Impact; Market Diversification; icrier (search for similar items in EconPapers)
Pages: 29 page
Date: 2025-08
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