An Analytical Study of India-China Trade Relations: Trends, Export Composition and Policy Framework

The economic ties between India and China rank among the most important bilateral relationships in today’s global economy. India has consistently worked toward creating a more balanced trade framework with China, engaging in bilateral dialogues to tackle non-tariff barriers affecting its exports. Driven by a robust exchange of goods and services, both nations are advancing rapidly, positioning themselves as dynamic economies and emerging influencers in the evolving landscape of international relations.This study examines the trade trends between India and China from 2015 to 2022, focusing on year-wise trade volumes, trade balances, and the composition of India's exports to China. It highlights significant sectors driving India's export performance and reviews major trade policies and bilateral agreements influencing the relationship. The study reveal that while India–China trade volumes have consistently surpassed the USD 100 billion mark, the trade relationship remains characterized by a persistent and widening deficit. India's exports, mainly consisting of low-value raw materials like iron-ore and organic chemicals, contrast sharply with its imports of high-value manufactured goods such as electronics and machinery. The study underscores the need for India to diversify its export basket, strengthen domestic manufacturing through initiatives like "Make in India" and the Production Linked Incentive (PLI) scheme, and secure greater market access for sectors such as pharmaceuticals, IT services, and engineering goods. Strategic policy reforms, enhanced bilateral cooperation, and active engagement in regional and multilateral platforms are essential to rebalance the trade relationship towards a more sustainable and mutually beneficial partnership.