【By Observer News, Zhang Jingjuan】The China-India border region is still in the depths of winter, but bilateral relations have quietly warmed up.
Indian economist and senior researcher at the New Delhi Observer Research Foundation, Sharma (Mihir Sharma), wrote on Bloomberg on the 28th that China and India have not only resumed diplomatic exchanges and restarted military meetings, but most importantly, India has begun to reassess China's role as an economic partner. This shift is due to India's recognition of reality.
The article states that India was once the most cautious country globally regarding Chinese investment and trade. After the 2020 China-India border clash, India restricted Chinese companies from bidding on government projects, requiring them to register with Indian government departments, undergo security and political reviews. This measure not only led to a significant drop in the amount of contracts won by Chinese companies in India, but also caused shortages of related materials domestically and delayed many engineering projects.
Now, these restrictions on Chinese companies are beginning to be relaxed, and cross-border capital flows between China and India are expected to gradually recover.
Bloomberg reported earlier this month, citing two Indian government sources, that the Indian Ministry of Finance plans to lift the five-year restriction on Chinese companies participating in government contract bids, with the final decision power resting with the Prime Minister's Office.
"This is no small matter in a country where the state sector dominates a large number of investment activities," said Sharma. India has clearly recognized the loss of several strategic advantages. Indian officials and the business community have reached a general consensus: without Chinese components, capital, and technology, India's economy will never possess global competitiveness.
According to reports, Reliance had planned to invest hundreds of billions of rupees in India to build the country's first super battery factory, with plans to start cell manufacturing by 2026 to support its expansion in renewable energy, electric vehicles, and energy storage businesses. To shorten the R&D cycle, the company had been negotiating with a Chinese lithium iron phosphate battery company since 2024 for battery technology licensing. However, according to sources, the company has halted the project after failing to obtain Chinese technology.
Sharma also mentioned the difficulties faced by multiple Indian industries in the article: textile manufacturers are unable to produce the desired fabrics due to lack of necessary equipment and chemical raw materials; important export-earning industries such as engineering and electronics have also raised similar complaints due to supply chain disruptions.
India's policy shift is also driven by external economic conditions. Sharma wrote that former US President Trump's chaotic trade policies have imposed heavy external pressure on India. The US not only imposed high tariffs on India but also frequently threatened further increases. As a result, India's exports to the US have continued to decline, and China has replaced the US as India's largest trading partner.
India container port IC photo
Indian academia has long seen the drawbacks of decoupling from China economically. Assistant Professor Chataraj (Saheli Chattaraj) from the Somaiya Vidyavihar University in Mumbai previously stated that the restrictions implemented by India after 2020 directly caused supply chain bottlenecks and project delays domestically, leading to a significant increase in costs for local manufacturers and infrastructure developers.
Chataraj said that the Indian decision-makers have realized that long-term economic decoupling from China would bring heavy economic costs. "Completely decoupling from China is neither realistic nor in India's interest."
Researcher Singh (Antara Ghosal Singh) from the Observer Research Foundation also revealed that the Indian economic survey report showed that in the process of developing its domestic manufacturing industry, India indeed relies on Chinese capital and technological support.
Sharma stated in the article that some Indian officials are suffering from cost overruns and project delays. They believe that allowing more efficient Chinese companies to participate in the bidding for government procurement worth approximately $700 billion in India would make their work easier.
He also pointed out that India's shift aligns with the general trend among many countries around the world: from Canada to the UK, countries are re-evaluating the importance of China to their economies. In the context of the US becoming increasingly unreliable and divisions within the Western bloc intensifying, many countries agree with Canadian Prime Minister Trudeau's statement during his visit to China—that Beijing is more predictable than ever. At the World Economic Forum in Davos, French President Macron also publicly called for China to increase foreign direct investment in growth areas in Europe.
In Sharma's view, if India genuinely relaxes restrictions on Chinese investments, it will reap tangible "peace dividends."
Regarding the development of Sino-Indian relations, Chinese Foreign Ministry Spokesperson Guo Jiakun stated earlier at a regular press conference that China is willing to work with India to view and handle Sino-Indian relations from a strategic perspective and in the long term, to be good neighbors and friendly friends, mutual success partners, realize the "dragon and elephant dancing" and bring more benefits to the people of both countries, and make due contributions to maintaining peace and prosperity in Asia and the world.
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Original: toutiao.com/article/7600608984478892584/
Statement: The article represents the views of the author alone.