Briefing paper

India’s economic dependence on China and Indo-Pacific integration

Publisher
International trade Relations with China International relations Supply chain China India Indo-Pacific Region
Description

This briefing is the third instalment from our Fellows program and discusses India's is increasing economic dependence upon China, and how this dependence limits India’s ability to act as a ‘balancer’ against China.

Countries like Japan, Australia and the United States hope that India will play a central role in balancing – and perhaps challenging – China’s role in the Indo-Pacific. This hope rests on assumptions about India’s ambitions to be a great power, the expansion and extension of its economic interests, and perceptions of its rivalry with China.

Key points:

  • India’s contested relationship with China is complicated by the shape of their bilateral economic relations
  • India is increasingly economically dependent upon China, due to structural weaknesses, in several key sectors
  • Pharmaceutical manufacturing – often considered an Indian success story – depends on imported precursors from China, which has been declared a national security concern
  • Chinese firms have also taken large positions in the Indian telecommunications market, raising questions of data security and critical infrastructure
  • This economic dependence limits India’s ability to act as a ‘balancer’ against China, as some external observers hope.

 

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