Chinese media and policymakers are recognising a subtle shift in India’s stance towards Chinese capital, balancing scepticism with pragmatic engagement, amid ongoing trade and border discussions.
China’s economic commentary on India is settling into a more complex pattern: scepticism about New Delhi’s rules remains, but so does recognition that India is slowly making room for Chinese capital, suppliers and trade. In a recent Eye on China newsletter, the writer argued that Chinese media coverage now tends to frame India as constrained by its own industrial weaknesses and yet still willing, in selective areas, to loosen the barriers that have kept Chinese firms out. That reading sits alongside broader trade data showing that China remains one of India’s major commercial partners, while still accounting for a relatively modest share of foreign direct investment into India.
The sharpest example is China-linked investment screening. According to India Briefing, India’s updated policy allows some foreign investors with up to 10% ownership from land-border countries, including China-linked capital, to use the automatic route, although cases involving control, Hong Kong-incorporated entities or sensitive sectors still need government approval under Press Note 3. The same policy shift was cast in the Chinese-language commentary as a sign that India is edging away from a blanket freeze on Chinese participation. Reuters-style reporting on the issue has also noted that New Delhi has been trying to balance tighter scrutiny with a need to attract fresh manufacturing capital.
Border trade has become another symbolic test. A Sputnik Chinese interview cited in the newsletter said the reopening of trade through Nathu La and Lipulekh in August after years of suspension was less about immediate volumes than about political signalling. That view matters because the trade itself is small compared with the wider bilateral relationship. NDTV reported that India-China trade reached a record $155 billion in 2025, while IBEF says China was India’s fourth-largest export destination in FY2023-24 and ranked 23rd among sources of cumulative FDI into India.
A third opening involves electronics manufacturing. Sina Finance reported on an Indian proposal to extend a tax exemption for foreign firms supplying equipment to contract manufacturers, a measure that would run through 2041 if approved. The report focused on phones, tablets, laptops, servers and wearables, and linked the move to India’s wider effort to deepen local assembly. That is where the commercial logic becomes clear: even as India tries to diversify supply chains away from China, Chinese machinery, components and technical know-how still sit inside much of the production base serving companies such as Apple and Foxconn. The result is a relationship defined less by decoupling than by managed dependence.
Disclaimer: This content is intended for informational purposes only. Readers are advised to exercise their own judgement, conduct due diligence, or consult a qualified expert before acting on any information provided.
