EAM Advocates Balanced Approach to Strengthen Business Ties with China

06 Dec, 2024

The Line of Actual Control (LAC) standoff in April-May 2020 marked a historic low in India-China relations, the worst in six decades. This tense political backdrop has shaped India’s cautious stance on economic ties with China. External Affairs Minister S. Jaishankar emphasized the need for a balanced approach to business with China during the Bharat@100 Summit organized by ASSOCHAM in New Delhi.

Speaking on the theme of “Enhancing Bharat’s Global Partnerships,” Jaishankar acknowledged recent progress on resolving “friction points” along the LAC but stressed the importance of continued dialogue for further improvements. While not advocating for halting trade with China, he urged careful consideration of its broader implications, especially for micro, small, and medium enterprises (MSMEs). He warned against becoming overly reliant on Chinese supply chains or turning India into a market for dumped Chinese products.

China’s dominance in global manufacturing—accounting for nearly a third—makes it a crucial player in international supply chains. However, Jaishankar highlighted the risks of excessive dependence, which could harm Indian industries and hollow out key sectors. The political relationship between India and China, strained over the last four and a half years due to border tensions, remains a complicating factor.

Recent agreements on disengagement and patrolling at Demchok and Depsang have brought some progress, but Jaishankar noted that India and China must now deliberate on further steps to stabilize ties. Advocating a nuanced approach, he underscored the absence of “black and white” solutions, urging that decisions on engaging with China be carefully balanced and weighed in light of both economic and strategic considerations.

India’s engagement with China must therefore navigate the complex interplay of economic pragmatism and political caution to safeguard its long-term interests.

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