The Sino-Indian relations deteriorated rapidly last year due to the border conflict. Indian Prime Minister Narendra Modi called out “self-reliant” and launched the PLI (Production Linkage Incentive) plan, suspending the review of 150 investment or land-based investments. In the acquisition case, more than 200 types of land-based apps were banned, but the result of the efforts was that the mainland once again became India’s largest trading partner and the largest source of deficit. Foreign media pointed out that it is difficult for India to get rid of its dependence on land-based products in heavy machinery, telecommunications equipment, and household appliances.
India’s top three trading partners for many years have been China, the United States, and the United Arab Emirates. In the past four years, only the status of its largest trading partner was replaced by the United States in 2019. According to preliminary data from the Indian Ministry of Commerce, the bilateral trade volume between China and India last year was 77.7 billion U.S. dollars. Although it was lower than the 85.5 billion U.S. dollars in 2019, it was higher than the 75.9 billion U.S.-India bilateral trade volume. The mainland once again regained its largest trading partner. In addition, India’s trade deficit with China is close to US$40 billion, which is also the country’s main source of trade deficit.
The decline in trade volume may not have played much role in the Indian government’s resistance. The main reason is more like India’s overall economic recession and sluggish demand, because the volume of trade with the United States and the United Arab Emirates has also decreased, and the decline is even greater than that of China. India’s total imports from China are 58.7 billion U.S. dollars, which is even higher than the combined imports of the United States and the U.S.
Amitendu Palit, a professor of economics at the National University of Singapore, pointed out that India’s dependence on Chinese products will continue. He said: “New Delhi’s efforts to get rid of Beijing will take a long time to see results. It will take at least 4 or 5 years for PLI to create new capabilities in specific industries, so India’s dependence on China will continue before then. carry on.”
After China and India completed the agreement to withdraw their troops from the border, the Indian government’s hostility to the land seems to have declined. The Economic Times of India cited government sources on the 22nd, saying that India is about to approve 45 pending land-based investment or acquisitions. The case may include Great Wall Motor’s acquisition of General Motors (GM) in India, as well as SAIC’s investment case.
(Zhongshi News Network)