India will now have to factor in China’s expanding influence in South Asian countries

TRADE $84.44 bn India-China trade reached $84.44 billion last year, the highest ever. There was an increase of about 40% in Indian exports in 2017, with the total at $16.34 billion, data from the Chinese General Administration of Customs showed in March.

PROBLEMS

BORDER: The border dispute continues despite 20 rounds of talks under the Special Representatives mechanism. Resolution not expected soon.

BALANCE OF TRADE DEFICIT: India’s trade deficit with China increased more than two-fold (219%) from $16 billion in 2007-08 to $51 billion in 2016-17, according to commerce ministry data. India’s imports ($61 billion) from China were six times its exports ($10 billion) in 2016-17, making the rising imbalance a major concern. (Stats from Bloomberg)

CHINA’S INFLUENCE IN SOUTH ASIA:

China’s footprint in South Asia is rapidly expanding. All of India’s neighbours support China’s Belt and Road Initiative. Chinese investments in infrastructure projects in Pakistan, Sri Lanka, Nepal and the Maldives are rapidly increasing.

WATER: Four rivers, including the Brahmaputra, Indus and Sutlej, originate in China, which has a strategic advantage over India in terms of rivers originating in the Tibet plateau and flowing into India. For example, Beijing stopped sharing hydrological data with India during and in the aftermath of the Doklam military standoff last year.

PAKISTAN: China’s snug ties with Pakistan remain a source of big worry for India. Beijing went ahead with the China-Pakistan Economic Corridor as part of the Belt and Road Initiative despite fully knowing India will oppose it as several projects are in Pakistanoccupied Kashmir.

Courtesy: Hindustan Times: 17 Jul 2018