India and China Relations

  • India delegates including commerce Secretary are going to China to discuss trade issues which in in favour of China.
  • It raises concern about India’s large trade deficit with China.
  • India has a huge potential to tap China’s market especially agriculture.
  • India’s rice and different varieties of sugar are on demand in China but face non-tariff barrier from China.

A historical background:

  • Political Relations On 1 April, 1950, India became the first non-socialist bloc country to establish diplomatic relations with the People’s Republic of China. Prime Minister Nehru visited China in October 1954. While, the India-China border conflict in 1962 was a serious setback to ties, Prime Minister Rajiv Gandhi’s landmark visit in 1988 began a phase of improvement in bilateral relations. In 1993, the signing of an Agreement on the Maintenance of Peace and Tranquillity along the Line of Actual Control (LAC) on the India-China Border Areas during Prime Minister Narasimha Rao’s visit reflected the growing stability and substance in bilateral ties.
  • Commercial and Economic Relations the Trade and Economic Relationship between India and China has seen a rapid growth in the last few years. Trade volume between the two countries in the beginning of the century, year 2000, stood at US$ 3 billion.
  • In 2008, bilateral trade reached US$ 51.8 billion with China replacing the United States as India’s largest “Goods trading partner.” In 2011 bilateral trade reached an all-time high of US$ 73.9 billion. Current State of Play According to recently released data by Chinese Customs, India-China trade in 2016 decreased by 0.67% year-on-year to US$ 71.18 billion. India’s exports to China decreased by 12.29% year-on-year to US$ 11.748 billion while India’s imports from China saw a year-on-year growth of 2.01% to US$ 59.428 billion.
  • The Indian trade deficit with China further increased by 6.28% year-on-year to US$ 47.68 billion. India was the 7th largest export destination for Chinese products, and the 27th largest exporter to China. India-China trade in the first eight months of 2017 increased by 18.34% year-on-year to US$ 55.11 billion.
  • India’s exports to China increased by 40.69% year-on-year to US$ 10.60 billion while India’s imports from China saw a year-on-year growth of 14.02 % to US$ 44.50 billion. In 2016, The Indian trade deficit with China further increased by 7.64% year-on-year to US$ 33.90 billion. Composition of Bilateral Trade In 2016, India’s top exports to China included diamonds, cotton yarn, iron ore, copper and organic chemicals. Indian exports of diamonds grew 28.48% and amounted to US$ 2.47 billion.
  • India was the second largest exporter of diamonds (worked/not worked) to China (with a share of 31.81%). India’s cotton (including yarn and woven fabric) exports to China showed a decline of 44.1% to reach US$ 1.27 billion, although India was the second largest exporter of cotton to China with 16.43% market share.
  • In 2016, Indian exports of iron ore registered an increase of over 700% to reach US$ 844 million.
  • Cultural Relations India-China cultural exchanges date back to many centuries and there is some evidence that conceptual and linguistic exchanges existed in 1500-1000 B.C. between the Shang-Zhou civilization and the ancient Vedic civilization. During first, second and third centuries A.D. several Buddhist pilgrims and scholars travelled to China on the historic “silk route”.
  • Kashyapa Matanga and Dharmaratna made the White Horse monastery at Luoyang their abode. Ancient Indian monk-scholars such as Kumarajiva, Bodhidharma and Dharmakshema contributed to the spread of Buddhism in China.
  • Similarly, Chinese pilgrims also undertook journeys to India, the most famous among them being Fa Xian and Xuan Zang.
  • As a mark of the historical civilizational contact between India and China, India constructed a Buddhist temple in Luoyang, Henan Province, inside the White Horse Temple complex which was said to have been built in honour of the Indian monks Kashyapa Matanga and Dharmaratna.
  • The temple was inaugurated in May 2010 by President Pratibha Patil during her visit to China. Besides this, in February 2007, the Xuanzang memorial was inaugurated at Nalanda.
  • In June 2008, joint stamps were released, one stamp depicting the Mahabodhi temple at Bodhgaya and the other depicting the White Horse temple at Luoyang.
  • In order to further academic exchanges, a Centre for Indian studies was set up in Peking University in 2003. Chairs of Indian Studies/Hindi have also been established in Shenzhen University, Jinan University, Fudan University, Guangdong University and in Shanghai International Studies university.
  • Education Relations India and China signed Education Exchange Programme (EEP) in 2006, which is an umbrella agreement for educational cooperation between the two countries. Under this agreement, government scholarships are awarded to 25 students, by both sides, in recognized institutions of higher learning in each other’s country.
  • The 25 scholarships awarded by India are offered by Indian Council for Cultural Relations (ICCR). During the visit of Prime Minister Sh. Narendra Modi to China, both the countries have signed fresh Education Exchange Programme (EEP) on May 15, 2015.
  • The same provides for enhanced cooperation between institutions in the field of vocational education; collaboration between Institutes of higher learning, etc. 25 Chinese students have been selected to join Hindi language course for the academic year 2017-18 under EEP scholarship awarded by ICCR.
  • Indian Community, The Indian community in China is growing. Present estimates put the community strength to around 35,500. A major part of this comprises of students (over 18000), who are pursuing courses in various universities in China.
  • A number of Indians and PIOs are also working as professionals with various multinational and Indian companies.
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