Analyzing the Dynamics of India-China Trade Imbalance: A Structural and Policy-Oriented Study

This study examines the imbalance in bilateral trade between India and China, which has been marked by a trade deficit on India's side since the early 2000s. Using a descriptive qualitative approach and secondary data sources from academic journals, policy reports, and international institution publications, this study analyzes the structural factors and domestic policies that influence trade relations between the two countries. The literature review draws on trade imbalance theory and the concept of global value chains, with particular attention to China's strengths in high-value-added manufacturing sectors and India's limitations in developing exports of complex products. The study's findings indicate that policies such as Make in India and the Production Linked Incentive (PLI) have provided sectoral boosts but have not yet addressed the underlying structural challenges. The main obstacles identified include suboptimal logistics infrastructure, low investment in research and development, and skill gaps in the workforce. The study concludes that efforts to reduce the trade deficit require a more integrated approach between industrial, trade, and economic diplomacy policies. Long-term strategies based on innovation, improved production efficiency, and expanded access to global markets are crucial for strengthening India's economic competitiveness in the future.