A Study of India's Trade Relations with China in WTO Era

Introduction

India and China have emerged as the two important economic giants in the Asia. Both the countries represent the two largest and most dynamic societies in Asia and play a vital role in the new economic architecture of the world. Robust economic growth in India and China has played a crucial role in this process. In the recent past, China and India have grown at an average 11% and 9% GDP respectively which made them the second and the fourth largest economy in the world in terms of purchasing power parity. Economic and trade relationship between India and China has changed in the 1980s with the opening of Chinese economy. Further, economic and trade liberalization of India in 1991 also played a vital role in developing the robust economic structure

Despite the strong economic ties, a wide range of geo-political issues have impacted the economic relations of the two countries. The trade between India and China was a minuscule till 1990, but with the start of globalization in 1990s, economic and trade relationship between the two countries has seen a paradigm shift. Most importantly, China’s joining of WTO has completely changed the economic and trade environment of China in with their trading partners.

It ensured the world that China has faith in the market based economy and it is willing to open for economic reforms as guided by WTO. China’s joining of WTO gave a big boost to foreign investors to explore the new avenues for businesses in China. Consequently, the trade relations between India and China also improved significantly. The aim of this research paper is to analyze the trade relations between India and China especially China’s entry into WTO in 2001.