India,China hanging by the cliff, Can they afford a trade war?

India and China are barely holding on their own but what will happen if these countries go on a trade war? Indian has already banned 51 of chinese applications. The picture of a full blown trade war does not look nice.

The deadly broder battle between both the countries last month has left the countries sour and has led to taking some drastic measures from both the ends. While India took an aggressive stance against China, the most populous country seems to be in no mood for retaliation.

Chinese officials last week said that they were "strongly concerned" about the app ban, for example, but they did not threaten any kind of retaliation. And on Friday, a spokesperson for the Ministry of Foreign Affairs stressed that the two countries should work together, adding that barriers to cooperation "will harm India's interests."

But given the interests of both the countries in line, India has more to lose. China has been a critical tarde partner for India and as of last. India bought $65 billion worth of goods from China, accounting for nearly 14% of its total imports, according to Indian government data. China, on the other hand, bought $16.6 billion worth of goods from India. China was India's second largest trading partner. Exports to India comprised only 3% of China's total in 2019, according to Chinese government statistics. And India was only China's 12th biggest trade partner last year.

Having said that, analysts have said that it will be a big loss for China to lose out to a big market like India especially when a lot of other countries have imposed trade restrictions on the world's second largest economy. But in any case India is to suffer more. The country is already going through an economic meltdown and any kind of trade imposition will only burden the debt.

A trade war, in a condition where countries are already suffering with the novel coronavirus pandemic, will be a huge loss on both the ends. Even if one happens to lose more than the other, people will be real sufferers and none of these countries can afford to go on a trade war at whatever cost.


Source:

https://edition.cnn.com/2020/07/03/economy/china-india-trade-war-intl-hnk/index.html

https://foreignpolicy.com/2020/06/29/trade-war-china-bad-idea-india-border-skirmish-boycott/

https://www.outlookindia.com/website/story/india-news-trade-war-with-china-not-good-idea-given-indias-manufacturing-ability-trade-promotion-body/354952

 

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