Archive · 9 Jun 2025
India Needs Calibrated Trade Policy With China, Says Economist
Imagine India buying a lot of ingredients from China to make medicines, like the building blocks for your toys.
An economist says this is risky because India might become too dependent on China.
He suggests India should be careful about what it buys from China.
Sometimes, India should buy from other places or make the ingredients itself.
Also, China's products, like technology, could pose cyber security problems if not trusted.
However, buying cheap solar cells from China is okay.
The main idea is to get the benefits of trade with China without becoming vulnerable.
Economist Montek Singh Ahluwalia advocates for a tailored trade policy between India and China.
Concerns include unfair trade practices, strategic dependencies, and cybersecurity risks.
India's over-reliance on China for Active Pharmaceutical Ingredients (APIs) is a key issue.
Solutions include domestic capacity building and diversifying supply chains.
Ahluwalia cautions against blanket bans, citing solar cells as an example.
- Who
- Montek Singh Ahluwalia, former Planning Commission Deputy Chairman, and other economists
- What
- India needs a carefully tailored trade policy with China, addressing economic and strategic concerns.
- When
- Not explicitly stated, but current economic and trade relations
- Where
- India and China
- Why
- To mitigate risks associated with over-reliance on Chinese imports and potential cyber threats.
Cautious Approach
Unstated
Trade Approach
Cautious Approach
Advocates for balanced trade policies, building domestic production and diversifying sources.
Unstated
Not explicitly stated, but would likely prioritize trade liberalization, cost efficiency.
Import Reliance
Cautious Approach
Focuses on reducing reliance on Chinese imports for strategic goods like APIs.
Unstated
Not explicitly stated, may prioritize maintaining current import levels based on cost benefits.
- Key Figure
- Montek Singh Ahluwalia
- Subject
- India's trade relationship with China
- Core Concerns
- Unfair trade practices, strategic dependencies, cybersecurity risks
- Strategic Dependency Example
- Active Pharmaceutical Ingredients (APIs)
- Proposed Solutions
- Developing domestic capacity, diversifying sourcing
- Specific Examples
- Solar cells, rare earths and minerals