GTRI Warns Against Over-Reliance on China: Calls for Self-Reliance as Trade Deficit Hits $100 Billion

China's decision to relax export restrictions is appreciated, but self-reliance is the sole succour for India in the face of trade difficulties. The Global Trade Research Initiative (GTRI) has recommended this in a report. The report claims that India cannot overlook its long-standing economic reliance on Chinese imports.

Indeed, China had prohibited the export of rare earth metals, creating a whirlwind in India's electronics and electric vehicle industry. In June, Chinese battery giant CATL recalled its engineers from Foxconn's Chennai plant, affecting operations.

Despite the recent relaxation, the economic imbalance remains deep. India's trade deficit with China reached a record $100 billion in FY25. At the same time, Beijing has openly supported Pakistan in the recent war. A trade deficit occurs when a country buys more goods and services from other countries than it sells to them.

GTRI has expressed concern that such dependence can give China a big advantage in times of crisis. India's everyday products, such as 80.5 percent of laptops and 86 percent of flat panel displays, are dominated by Chinese imports.

In addition, India's share in bilateral trade has declined from 42.3 percent two decades ago to just 11.2 percent. This sharp decline highlights the weakness of India's supply chains and increasing dependence on Chinese inputs.

The report emphasizes that the imbalance in India-China relations cannot be hidden. India has only one way out - to strengthen domestic manufacturing, reduce dependence on imports and create resilient supply chains. A stronger and more self-reliant India will be in a better position to negotiate with China on equal terms. India will keep the relationship stable and pragmatic rather than succumbing to sudden changes.