India-China trade ties: What does it mean for investors and which sectors may benefit? Explained
In a series of positive developments, two countries have agreed to resume direct flights and boost trade and investment, including reopening border trade at three designated points, and facilitating visas, the Indian foreign ministry said.
The latest statements came following the visit of Chinese Foreign Minister Wang Yi to New Delhi for the 24th round of talks with Indian National Security (NSA) Advisor Ajit Doval to resolve their decades-old border dispute.
Meanwhile, Prime Minister Narendra Modi is scheduled to travel to China at the end of this month to take part in the summit of the Shanghai Cooperation Organisation, his first visit to the country in more than seven years.
According to analysts, this development signals a potential recalibration in India–China relations, which gains significance amid high Trump tariffs on two of the world's biggest economies.
Importance of India-China ties amid Trump's tariff tantrum
India and China together represent 37% of humanity and are the anchors of the BRICS bloc. "A closer alignment between the two could amplify the voice of the Global South on issues ranging from trade and climate to technology and peacebuilding," said Harshal Dasani, Business Head at INVasset PMS.
He believes the India-China trade talks and progressive signs on other fronts come at a time when the world economy is under stress from tariff wars and protectionism, and holds weight to shift the balance in global governance.
The Indian government is recalibrating its foreign policy by strengthening engagement with China, as well as other members of the BRICS group, a shift that underscores its increasingly tense ties with the US under Trump.
The recent India–China talks signal a strategic shift alongside mounting pressure from Trump's tariffs, opined Ross Maxwell, Global Strategy Lead at VT Markets. Chinese Foreign Minister Wang Yi's visit to Delhi, alongside renewed diplomatic ties and eased export restrictions, is a signal that both sides are trying to help ease the economic friction created by US tariffs, and is one example of how these tariffs will cause global realignment on how trade is conducted, Maxwell added.
What does better India-China ties mean for investors?
Analysts foresee several industries and sectors gaining from strategic ties between the two countries.
An enhanced India–China relationship helps India secure vital industrial inputs and infrastructure supplies, supporting strategic resilience against US protectionism. Meanwhile, they also see access to capital and advanced technology for India
"The SCO Summit in China could mark the beginning of this pragmatic reset," said Dasani.
Which sectors can gain from India-China ties?
According to analysts, defence, renewable energy, tourism, and manufacturing are among the top sectors that seem to gain from the trade ties between the two Asian countries.
"Many sectors stand to benefit from these talks including, critical minerals and rare-earths, where China controls a substantial amount of global production and processing. These are essential for electronics, defence and renewable energy industries," Maxwell opined.
Meanwhile, Dasani of INVasset PMS sees sector-specific gains from better bilateral relations for the following:
Renewables & Green Tech: China's leadership in solar, wind, EVs, and battery technology can complement India's clean energy transition and PLI schemes.
Tourism & Aviation: Direct flights and easier visas could revive travel flows, benefiting India's hospitality and aviation sectors.
Pharma & Healthcare: Cooperation could strengthen supply chains, lowering input costs for India's pharma industry.
Manufacturing: Indian companies can benefit from Chinese investments and technology transfers, while continuing to push 'Make in India.'
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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