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India-China relations: Record trade of over 100 billion dollars between the two countries despite border tensions

Bilateral trade between India and China has crossed 100 billion dollars this year, but it is not widely discussed. The reason for this is clear: relations between the two countries have been going through a very critical period since the border tensions in eastern Ladakh.

According to the Indian News Agency, the bilateral trade, which was 8 1.83 billion in 2001, has increased to 100 billion dollars in the first 11 months of this year. This is a great opportunity for business between the two countries as the two countries have improved their trade relations.

 

How much has been traded?

According to the General Administration of Customs (GAC) of China, bilateral trade between India and China stood at 4 114.263 billion, an increase of 46.4% between January and November 2021.

India's exports to China have reached 26.358 billion dollars, an increase of 38.5 percent year-on-year, and India's imports from China have reached 87.905 billion dollars, an increase of 49 percent.

On the one hand, bilateral trade has exceeded 100 100 billion, on the other hand, India's trade deficit has increased sharply during these 11 months. The trade deficit means that India has bought more goods than it has sold to China.

The trade deficit is of great concern to India, which has risen to 61.547 billion dollars. This year, it has climbed by 53.49 percent.

However, it is not being celebrated as border tensions continue in eastern Ladakh and relations between the two countries are slower than before.

Questions and critical relationships on record trade

Defense analyst Brahma tweeted about the trade volume, questioning the increase in business between the two countries.

In his tweet, Brahma wrote, "How does the Modi government justify a 50 percent increase in trade with China in 2021, despite border crossings by China, with China contributing Rs 61.5 billion dollars between January and November?" "The dollar has increased in value, which is nearly equal to India's whole defense budget in the current fiscal year."

Border tensions between India and China erupted on May 5 last year, following violent military clashes between the two countries in the area of ​​Lake Pangong, in which several soldiers of both countries were killed. Gradually, the two countries deployed thousands of troops and heavy military equipment in their respective territories.

After several rounds of military and diplomatic talks, the two sides began retreating north and south of Lake Pangong in February this year and in the Gogra region in August.

By July 31, the 12th round of talks between the two sides had taken place. A few days later, the two forces completed their disengagement process in Gogra. And it has been described as crucial to restoring peace and order in the region.

Both sides have deployed 50,000 to 60,000 troops along the Line of Actual Control (LAC) in the mountains.

Tensions near the Ladakh border had paralyzed all relations between the two countries except trade.

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Opinions of both countries

In a panel discussion in Singapore in November this year, Indian Foreign Minister SJ Shankar had said that India and China were going through a "particularly bad period" in their relations as China had violated the agreement with several actions. For which he has no 'concrete answer' yet.

Referring to the Ladakh border tensions, he said: "We are going through a very bad period in our relations as they have taken a number of steps which have violated the agreements and they still have no concrete There is no answer that shows that we need to think about where they are going to take our relationship, but it is their job to answer. "

Former Indian Ambassador to China Vikram Misri has also highlighted the issue. During his virtual farewell program on December 6, Misri had told Chinese Foreign Minister Wang Yi that the (current) challenges had undermined the great potential of India-China relations.

Referring to the Ladakh tensions, Misri told Wang: "There are possibilities and challenges in our relationship. Even last year, there were some challenges that affected our prospects in our relationship."

In January 2019, Misri took over as India's ambassador. He was given the responsibility when the two countries came out of the 2017 Doklam dispute through diplomatic efforts.

The stalemate ended with the first informal summit meeting between PM Modi and Chinese President Xi Jinping in Wuhan in 2018 and the long-term development agenda of the second conference in Chennai, India in 2019. However, tensions then erupted in eastern Ladakh.

Before returning to New Delhi, Vikram Misri told the media in an informal conversation how Modi and Xi Jinping had expected and agreed to implement two important steps during the Chinese summit.

The two countries had decided to set up a High-Level Economic and Trade Dialogue (HETD) mechanism to be chaired by the Deputy Prime Minister of China and the Foreign Minister of India. It also looked at India's trade deficit issues with bilateral trade and trade partnerships.

China had set up such a high-level mechanism only to improve relations with the United States.

At about the same moment, the two leaders agreed to make 2020 the year of India-China Cultural People-to-People Interaction, with 70 events planned between the two nations for various levels of exchange. These included understanding each other's legislatures, political parties, culture, and youth organizations, and armies.

Unfortunately, after the tension in East Ladakh, bilateral relations between the two countries were affected and both measures failed.

On China's position on relations between the two countries, Wang said during a meeting with Misri that "without bilateral relations, it is very difficult to bring the two sides together, even if there aren't any impediments in the path."

He said that "China and India should be partners and friends of each other" and should not be a threat to each other.

Observers believe that the Doklam and Ladakh tensions are a warning to re-establish India-China relations with a new perspective and strategic framework.

At the national level, the ruling Communist Party of China held a high-level meeting in November to pass a "historic resolution" on the party's significant achievements over the past 100 years. It also paved the way for President Xi Jinping to take over the presidency for a record third time.

This was the third 'historic proposal' of its kind in the party's 100-year history. Earlier resolutions were issued under the leadership of party founder Mao Zedong and his successor Deng Scoping.