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India-China Trade Relations, Border Disputes, Related Concerns

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.

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