China has also been mentioned in the Economic Survey of India.
Irrespective of India’s political relations with China, at present the economic relations between the two countries have not even deteriorated. Even after the standoff between the two countries in the Galwan Valley, India has been importing goods from China. This import has been increasing every year. Despite all the restrictions, these imports have not decreased. Even India’s trade deficit is increasing. In such a situation, India has made a plan through which China can be taken full advantage of. The Government of India has also presented its planning in the Economic Survey. Let us also tell you what plan the Government of India has made in the Economic Survey on China.
China mentioned in economic study
The Economic Survey presented in Parliament on Monday said that increasing inflow of foreign direct investment (FDI) from China can help India’s participation in the global supply chain and boost exports. According to the survey, India wants to increase its participation in global value chains (GVCs). Therefore, it should also pay attention to the successes and strategies of East Asian economies. These economies have generally followed two main strategies: reducing trade costs and facilitating foreign investment.
What’s the plan
She said India has two options to benefit from the China Plus One strategy – either by joining China’s supply chain or by promoting foreign direct investment from China. The Economic Survey 2023-24 tabled in Parliament by Finance Minister Nirmala Sitharaman says that among these options, focusing on FDI from China appears to be more promising for increasing India’s exports to the US, as East Asian economies have done.
India will benefit
Moreover, choosing FDI as a strategy to benefit from the China Plus One approach appears to be more advantageous than relying on trade. The review says this is because China is India’s largest import partner and the trade deficit with China is increasing. Since the US and Europe are diverting their immediate supplies from China, it is therefore more profitable for Chinese companies to invest in India and then export products to these markets, rather than importing from China, adding minimal value and then re-exporting them.
What is the situation of Chinese FDI?
He said increasing FDI inflows from China can help promote exports as well as increase India’s participation in the global supply chain. Currently, foreign direct investment from China in any sector requires government approval. China ranked 22nd with a share of just 0.37 per cent ($2.5 billion) in total foreign direct investment capital inflows to India between April 2000 and March 2024.
