More Chinese investment is good for greater relations, says India’s envoy to China

Greater investment from China in India will be good for both the economy of the relationship and wider bilateral ties, Ambassador to China Vikram Doraiswami said on Saturday (July 4, 2026). The Indian envoy also advocated for more Indian exports to China, especially in areas such as pharmaceuticals where India is globally competitive.

“Of course we’d like to be able to export more to China. It’s not unreasonable to suggest that,” he said in a speech at the World Peace Forum, an annual foreign policy forum in Beijing, on a panel on protectionism and global economic governance.

“Especially in areas where we believe we have a competitive advantage, such as pharmaceuticals. For example, we are one of the world’s major exporters of pharmaceuticals to developed markets. We hope that Chinese partners will work with us to ensure that Indian manufacturing firms producing high-quality generic drugs, which are the same products that have been exported to the US and elsewhere, can be exported to the Chinese market. We think there is balance, added value, advantage for both countries.

Business is expanding, but it’s tilted

India’s trade with China has expanded despite a political freeze in relations since 2020. The two sides began the process of normalizing relations after Prime Minister Narendra Modi’s meeting with Chinese President Xi Jinping in October 2024, as a result of disengagement along the Line of Actual Control (LAC).

However, trade remains flat with a growing deficit. China was India’s largest trading partner in 2025-26, with bilateral trade rising to $151.1 billion, while the deficit stood at $112.16 billion, according to Commerce Department data.

Mr Doraiswami noted that trade had grown “regardless of the ups and downs of the larger political relationship”. Recently, Indian exports to China have also increased. “That means the market opportunity is there. We have to find ways to make it easier,” he said.

Consumer protection needs

India continues to import large quantities of electrical machinery and finished goods from China, as well as a number of intermediate products. “How do we find ways that India and China can be connected, with an expanding basket of goods that both sides can provide to each other, but also with a sense that reasonable consumer protection mechanisms can be used in a way that allows India to export more of the goods it can export elsewhere in the world to China as well?” he said.

“In other words, it would be easier to think about trade not being balanced exactly 50/50, but one side having more exports, assuming the exports consist of goods that we can also add value to. If it’s pure consumer goods, that’s a little harder to sell as a reasonable deficit mechanism,” he added.

Changed policy environment

Regarding investment from China, he said “the political environment has specifically changed in the last few months to facilitate greater Chinese investment.” In March, India eased restrictions on investment from China that had been put in place in early 2020 through Press Note 3.

Mr. Doraiswami said India was “willing not only to help make the investment, but also to listen to their concerns and find ways that we can offer more hand-holding assistance to enable (Chinese) businesses to enter India. He added: “I think it’s good for the economy of the relationship. It’s also good for the greater relationship between the countries.”

Value-added production

“As the relationship moves toward normalization, the Indian government has taken steps to restore opportunities for Chinese enterprises to invest in the Indian market,” he said. “We would like that connection to be better because today, of course, it’s not just India, but the whole world, where Chinese input into the manufacturing process across the board, whether it’s chemicals, new renewable energy products, etc., is critical to international manufacturing.”

He also linked it to business interests. “As long as the trade basket includes goods where we can accelerate, add value and (enable) production for our own market but also for export markets with countries that we now have trade agreements with and across the board, it would be easier to sell in India,” he said.

Published – 04 Jul 2026 14:40 IST