Despite the recent improvement in diplomatic relations between India and China, experts believe that it is unlikely to significantly impact investments or trade in the textile sector in the short term. Addressing the longstanding trade imbalance and reducing dependence on Chinese textile imports will require sustained, long-term efforts.
Since the strained relations in 2020, Chinese investments in India have been restricted, while the trade deficit has continued to widen. Between FY20 and FY24, India’s textile exports to China saw a marginal increase from $16.61 billion to $16.65 billion. However, imports from China surged from $65.26 billion to $101.74 billion, resulting in a trade deficit of over $387 billion, according to GTRI.
Ajay Srivastava, founder of GTRI, suggests that significant investments from China are unlikely in the near future, as the country was not a major investor in India even before 2020. This indicates that the recent diplomatic thaw may not translate into immediate benefits for the Indian textile industry, which remains heavily reliant on Chinese imports for raw materials and machinery.
