Bilateral Trade

China-Indian trade started in 1951. The trade agreement was signed by the
governments of the two countries in 1954 and renewed in August 1984. Seven yearly
trading agreements have been signed in sequence since 1986. The bilateral trade
between China and India grows rapidly with trade volume continuously increasing,
variety of exchanging commodities gradually expanding, the communication between
professionals of the two nations strengthening.

General Trade

Since 1991 when India started economic liberalization process, the two-way trade
between China and India has been increasing steadily and by a big margin. The two-
way trade in 1991 amounted to US$265 million. In 1995, it reached US$1162 million. By
1996 it topped US$1400 million (20.9% increase over 1995). In 1997, the bilateral trade
registered US$1830 million, a further increase of 30.2% over 1996.

According to the statistics of China Customs, the total amount of Sino-Indian trade in
2002 came to US$4.95 billion, increased by 37.6% over the last year, of which China’s
export accounted for US$2.68 billion, 41% up comparing to that of last year, while
China’s import amounted to US$2.27 billion, an increase of 33.8% comparatively. In the
year 2001, bilateral trade rose to US$3.6 billion, of which China’s export was US$1.9
billion, the import was US$1.7 billion. Currently, India is the biggest trade partner of
China in South Asia.

Export and Import Commodities

The main export items from China to India include raw silk, beans, sheet and paper
pulp, rosin, coke, medical products, light industrial products, textile products, chemical
industrial products, foods, metal products, machinery, etc.

The export of machinery and electronic products to India covers mainly machine
tools, electrical wires and cables, power equipment, television sets and CKD
components, spare parts and accessories of TV, radio and telecommunication
equipment, etc.

China’s import from India includes iron ore, chrome ore, gem, steel, leather,
vegetable oil, southern medicine, raw material for chemical industry, etc.
 Economic Cooperation

On economic cooperation, China has made some progress. A break through has
been achieved in contracting turnkey projects. The bid for erecting a 540MW captive
power plant for an Aluminum Company of Sterlite Industries Ltd. was awarded to China
Shandong Electric Construction Corporation (SEC) in August 2003.

In 2002, China signed with India some labor contracts and consulting agreements,
contract value totaling US$0.6 billion, actual fulfillment value US$57.64 million. By the
end of 2002, the number of Chinese-Indian Joint Venture Company has come to 15, of
which Chinese investment accounts for nearly US$20.63 million.

By the end of 2002, the number of Indian-Chinese Joint Venture Companies reached
71, of which actual Indian investment accounted for nearly US$63 million. In 2002, India
signed 21 investment agreements with China, contract value totaling US$26 million,
actual fulfillment value arriving at US$31 million.

Big Potential for Development of Bilateral Trade

The trade turn-over between China and India in 2000 accounted for only 3.46% of
Indian’s total foreign trade of US$84 billion, and accounted for 0.61% of China’s total
foreign trade of US$473.3 billion.

The China-Indian economic and trade relations developed a great deal over the past
few years, especially a quick growth in bilateral trade. However, the total trade volume
between China and India in 2002 constituted 4.8% of India’s total trade only, and
China’s export to India only constituted about 4% of India’s import. The present annual
trade volume between the two countries is still not commensurate with the overall
economic strength and huge market demand of both countries.

China and India have many similarities and are complementary to each other in many
sectors, such as chemical and pharmaceutical, machinery and electronics. There is a
big potentiality for increase of trade and expansion of economic co-operation between
the two economies.

China attaches great importance to strengthening of economic and trade relations

with all her neighbors. The Chinese side desires to establish an overall, long-term and
stable economic and trade relationship with India while the Indian business community
strongly desires to strengthen the trade and economic ties with China. So there is a
bright future for the expansion of bilateral trade and economic cooperation.
 Bibliography
Center, C. I. (2005, 12 15). bombay2.mofcom.gov. Retrieved 12 15, 2005, from bombay2.mofcom.gov:
http://bombay2.mofcom.gov.cn/article/bilateralcooperation/inbrief/200412/20041200010319.
shtml

Swanson, A. (2014, 09 28). forbes.com. Retrieved 09 28, 2014, from forbes.com:

https://www.forbes.com/sites/anaswanson/2014/09/28/five-reasons-india-shouldnt-worry-
about-its-trade-deficit-with-china/#887142c41e25

[ CITATION Ana14 \l 1033 ][ CITATION Chi05 \l 1033 ]

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