According to a March 26 report by The Print, Indian scholars have stated that the development of China's Hainan Free Trade Port may impose new pressures on India's export structure and trade balance. Currently, the global trading order is undergoing profound transformation, with many countries shifting toward unilateralism, while China adopts a "controlled openness" strategy, seeking a balance between expanding openness and ensuring security. Located at a strategic maritime crossroads in the South China Sea, the waters surrounding Hainan carry approximately one-third of global maritime trade volume and about 55% of India’s overseas trade traffic. As an independent customs territory, Hainan allows businesses to import goods duty-free into the island, and when local value-added reaches at least 30%, processed goods can be transported tariff-free to mainland China. This policy significantly benefits high-value industries with low processing costs and high tariffs—such as electronics, medical devices, energy equipment, and luxury goods manufacturing. At the supply chain level, through cargo consolidation, logistics optimization, and inventory cost reduction, companies could lower their overall operating costs by roughly 10% to 20%, further strengthening Hainan’s role as a hub connecting China and the Asia-Pacific markets, thereby giving it the potential to reshape regional trade dynamics. Data shows that from December 2025 to mid-January 2026, Hainan’s duty-free sales increased by 47% year-on-year, reaching $697.9 million (USD 697.9 million). For India, this trend presents undeniable trade pressure. India’s trade deficit with China continues to widen, exceeding $102 billion (USD 102 billion) between April 2025 and February 2026. Indian analysts believe that by reducing China’s domestic actual production costs, the Hainan Free Trade Port will further squeeze the competitive space for overseas suppliers, potentially undermining Indian exports and further exacerbating the Sino-Indian trade deficit.
Original source: toutiao.com/article/1860830266293248/
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