The recent border dispute has again raised the spectre of Chinese encirclement. But, apart from the geopolitical squeeze, developments seem to indicate that a Chinese geo-economic encirclement may have already happened. Chinese capital goods manufacturers have made deep inroads into India, with some critical sectors now highly dependent on Chinese spares and after-sales servicing. Chinese portfolio investors are the other angle in geo-economic encirclement. One of the reasons for the large deficit are Chinese tariff and non-tariff barriers which constrain Indian exports; for example, Indian pharmaceutical exports have found it difficult to penetrate the Chinese market.

Source: Mint July 11, 2017 20:48 UTC