Sino-Indian Economic Ties since 1988: Progress, Problems, and Prospects for Future Development

Abstract

This article takes stock of the evolution of bilateral economic ties between China and India since the early 1990s. It analyses the factors that have contributed to the expansion of this important aspect of their relationship, but also highlights the obstacles, in particular the politico-strategic variables, to further expansion of economic ties, including investments. It argues that while both Beijing and New Delhi recognise the importance of trade and investment in their relationship, future growth in bilateral economic ties depends on how the two countries can successfully deal with issues such as trade imbalance, market access, infrastructure, and regulatory environment. But more importantly, Beijing and New Delhi must seriously address each other’s security concerns, including those areas that affect their perceptions of economic security and consequently their policies towards bilateral and regional cooperation.