Abstract
This paper is an attempt to examine and compare the bilateral relationship between India and China. It analyses the trends in trade and the major composition of commodities being traded between India and China during the period (2008-2017). Annual Growth Rate (AGR), Combined Annual Growth Rate (CAGR), Trade Intensity Index (TII), and Trade Reciprocity Index (TRI) have been used in order to analyse the bilateral trade between India and China. The present study reveals that India imports 3 to 4 times more than it exports to China whereas overall trade between India and China also increased over the years specially in the area of import as compare to India’s total trade to the world. However, the top ten commodities that have been dominating in India’s trade with China are: Ores, Cotton, Copper and articles, Organic chemicals, Electrical machinery & equipment, nuclear reactors, etc. Trade Intensity Index reveals there is serious unbalanced trade relationship between India and China from India’s point of view and India need to take productive steps for minimising unbalanced trade balance. Whereas, TRI index also reveals that India is stepping towards unbalanced trade with China as the import indices keep on increasing in comparison to export indices and therefore, balance of trade results unfavourable which requires India to rethink and revamp its export and import policy.
Highlights
India and China have always shared an inseparable relationship with each other whether it is cultural, political or economic relationship
The present study reveals that India imports 3 to 4 times more than it exports to China whereas overall trade between India and China increased over the years specially in the area of import as compare to India’s total trade to the world
It has been widely accepted that an increase in trade leads to deeper economic integration and assists in sustaining economic growth both at bilateral, regional as well as at the global economy and in this context, both India and China emerging countries have made a significant contribution to world trade
Summary
India and China have always shared an inseparable relationship with each other whether it is cultural, political or economic relationship. India and China trade relationship is as old as ancient times from the period of Silk Roads (trade between Eastern part of the world to Western part of the world) to the present era. Trade between these nations started to escalate from 1950 when India was among the countable countries to end formal ties with China. In the year 1984, India and China entered into a trade agreement, which provided them the status of Most Favoured Nation (MFN). 2. To analyse India’s Trade Intensities Index (TII) with China in the study period (2008 to 2017). To investigate the nature of India’s Balance of Trade with China and Trade Reciprocity Index (TRI)
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