China & India this week agreed to strengthen trade and investment connections after their economic relationship had deteriorated in recent years in response to the COVID pandemic and serious border conflict in 2020. This move seems to reflect an assessment that building the bilateral relationship can insulate both economies from the impact of United States trade policies.

Direct flights between China and India had been suspended since 2020 but are now expected to resume in coming weeks. Overland trade will also now be allowed to pass through three designated points on the China-India border, though the vast merchandise trade flows will continue via sea routes. Visa and investment restrictions will also be eased.

Indian data indicate that trade between India and China amounted to around $120 billion in 2024, with China ranking as India's second largest export market and India ranking as China's seventh largest export market. For both nations, however, the United States remains the largest export market and both are set to continue efforts to strengthen their relationship with other major trading partners.

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