The business dispute between the US and China started in 2018, it is not completely over yet. At that time the US said that China violates its patent and adopts wrong ways in business, so the US imposed heavy tax (tariffs) on billions of dollars coming from China. In response, China also increased the tax on American goods. This increased the prices of goods from both countries and affected the supply chain of the whole world. Due to this quarrel, there was a chance to India that it could sell more goods to both America and China, but in the beginning India could not take advantage of this opportunity properly.
Then when Trump again became the President of America, in April 2025, he imposed about 145% tax on goods coming from China. At that time there was only 26% tax on goods going from India to America. Therefore, it was expected that India’s exports would increase, but only six weeks later there was an agreement between the US and China. Now America’s tax on goods coming from China has come down to 30% and China imposed only 10% tax on goods coming from America.
At the same time, in August itself, the US increased the tax on India to 50%, while countries like Bangladesh, Pakistan and Sri Lanka have imposed only 20% tax. This can cause damage to India, because now the price of its goods will be higher in America and it will be difficult for India to compete compared to other countries.
Dr. Rajan Sudesh Ratna, senior economist and Deputy Chief of UNESCAP, believes that China is trying to improve relations with India under current circumstances. India is also serious about this relationship, because it is also troubled by Trump’s arbitrary attitude. If India and China come close to each other and become good friends, then it will be a big shock for Trump.
Is India-China relations a new beginning?
According to recent media reports, China has expressed his desire to increase trade with India. It is believed that due to increasing pressure from America, China is now looking for new partners, and India can become a strong option for it. The Foreign Minister of India recently reached China to attend the meeting of the Shanghai Cooperation Organization (SCO). This tour is considered to be a sign of a new beginning of dialogue between the two countries.
Now Prime Minister Narendra Modi is also going on a visit to China on 31 August and 1 September. This journey is special in many ways, as it will be PM Modi’s first visit to China after the India-China clash in the 2020 Galwan Valley. Earlier, he visited China in 2019.
PM Modi will first visit Japan on 30 August, where he will take part in the India-Japan Summit. After this, they will leave directly to China. The importance of this tour also increases because recently, America has imposed 50% tariff (import duty) on India. Similarly, China is also facing America’s tariffs and other pressures. In such a situation, both India and China are seeing possibilities in each other.
Significantly, both India and China are important members of the BRICS group. The BRICS summit held in Kazan in October 2024 met between PM Modi and Chinese President Xi Jinping. Since then, efforts to reduce border tension have intensified.
Apart from this, on 23 July 2025, the Indian Embassy in China made a big announcement, now from July 24, Chinese citizens can apply for India’s tourist visa. This step is being considered an important sign towards increasing mutual connection between the two countries. While partnership with India can be helpful in reducing its financial difficulties, it can be a chance for India to reduce the deficit and strengthen its position on the global platform.
Trade deficit from China India’s major problem
Give Dr. Rajan According to data, India’s trade deficit with China is very big. In 2010, India sold goods worth $ 17.44 billion to China, which declined to $ 14.90 billion in 2024. At the same time, China sold goods worth $ 41.25 billion to India in 2010, which increased to $ 126.96 billion in 2024. India sells most raw materials and middle process products to China, while China sells expensive and finished goods such as machines, electronics and capital goods to India. This is why the deficit is increasing. China asks for about $ 1.188 trillion from the world every year, but India has only 0.64% stake in it. This means that India has the ability to make and sell goods is much less than that of China.
Very big chance for India
Dr. Rajan Sudesh Ratna believes that at this time India has a big opportunity, but to take advantage of this, you have to take quick and concrete steps. First of all, India should have a direct and clear conversation with China, so that good business deals can be fixed. This will not only improve India-China relations, but also will make India’s position strong in talks with America. Also, India can propose to China to fulfill some of its needs from India. If this happens, India’s exports can increase from 50 to 100 billion dollars. For this, it is important that India also increase production in its country. At present, the production of many things is low in us, so the government should plan it with industries. Apart from this, India will have to pay attention to the export of ready and expensive goods instead of selling raw materials, so that more profits can be made and India’s hold in the global market is strong.