Amidst India-China Bonhomie In Bilateral Ties, Both Sides To Fight Each Other At WTO Meet

By Nitya Chakraborty

It is a history of twists and turns in India-China economic relations for decades. The same is being repeated now as India after taking special measures to make Chinese direct investment easier and agreeing to start border trade from three points in this country from June this year, is faced with the prospect of fighting China at the World Trade Organisation (WTO)’s 14th ministerial meeting at Cameroon on March 26 to March 29 this year on China backed proposal for setting up Investment Facilitation Development (IFD) framework.

The proposal has been supported by 120 countries out of 168 countries attending. So that way, China is advantageously placed to get the proposal through. But India has the support of about 40 countries including South Africa, Sri Lanka and even Nepal. Though, Nepal has yet to get its new government after March 5 elections, the decision by the interim Prime Minister must have been prompted by the incoming PM Balendra Shah. That way, this is a positive sign for the betterment of India-Nepal relations.

Trade experts say that New Delhi has reasons to be concerned at the Chinese move to get it passed because this will expand Chinese influence on the poorer countries by making use of China’s financial muscle while this will go against the emerging economies like India, Brazil, Turkiye, Sri Lanka. Interestingly, the U.S. which has a continuing trade war with China has extended its support to the Chinese proposal.

Indian officials are highly experienced in WTO affairs. They have taken recourse to some of the gaps in the Chinese proposal and have argued that discussions on this proposed IFD framework should remain outside WTO. So this Chinese proposal should not be any part of the WTO’s new agreements. Some countries are trying to see that the IFD proposal is postponed to the next meeting. In fact in 2024 WTO meeting, India and South Africa jointly blocked China’s bid to get the IFD proposal approved.

Apart from this contentious issue, the WTO meeting will be discussing the challenges and opportunities facing the multilateral trading system and to take action on the future work programme of WTO. A delegation of World Farmers Organisation (WFO) will be participating in the meeting. India is expected to discuss its Food Security Programme and underline the need for a permanent solution to this food security issue.

Leaving aside this WTO issue, India and China are presently in a comfortable position as far as the economic relations are concerned. India has just announced the starting of direct flights between Delhi and Beijing. That will help in boosting business further as for long six years since 2020, the flights were suspended after the Galwan Valley clash between Indian and Chinese troops resulting in the death of 20 Indian soldiers and many Chinese also.

The Chinese side is also very welcoming at the recent Indian government decisions. Chinese official media said on Saturday that the increase in flight routes means more convenient personnel exchanges, lower business costs, and broader channels for cultural exchanges. More importantly, the signal released by the resumptions will guide businesses of both countries to re-evaluate each other’s markets, activate business plans, and promote bilateral cooperation projects.

Recent positive interactions between China and India have driven the steady improvement of bilateral relations, elevating them from “a reset and fresh start” to a new level of improvement. Interactions at all levels have grown more frequent, economic and trade cooperation has reached new heights, and, people-to-people exchanges have become increasingly active, Chinese official daily Global Times said.

These mutual efforts have laid a solid foundation for stabilizing and revitalizing the bilateral relationship. Chinese Foreign Minister Wang Yi noted at a press conference on March 8 that mutual trust and cooperation are beneficial to the development of China and India, while division and confrontation are detrimental to the rejuvenation of Asia, according to a report by the Xinhua News Agency.

Economic and trade cooperation has always served as the anchor of China-India relations. Although bilateral trade has experienced twists and turns in the past few years, the complementarity of the two countries’ economic structures has not weakened. In 2025, bilateral trade reached a record high of $155.6 billion, marking a year-on-year rise of over 12 percent. But here there is a catch. China has a huge trade surplus and that is going up. Indian officials however say that the Chinese exports are all need based for India and contributing to the overall growth of the country’s economy. But many experts feel that this trade imbalance has to be removed and India should not be dependent on China in some key areas.

China, however, is looking at further investment relaxation by India to facilitate Chinese FDI inflow. The Chinese official position is that the resumption of direct flights is only a starting point. For China-India economic and trade to truly embark on a path of sustained upward development, more good news is needed, such as more flight routes, more visa facilitation measures, more relaxation on investment rules, and the deepening of industrial and supply chain collaboration. Each effort will benefit bilateral relations and accumulate assets for mutual trust. The continuous accumulation of these developments will form a positive cycle, consolidating the current upward momentum into a more stable and resilient norm. It is to be seen how the India-China economic relations take its course in the coming days. (IPA Service)

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