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China regains slot as India’s top trade partner despite tensions

China has regained its position as India’s top trading partner despite a decaying relationship between the Asian neighbours.

The two countries were involved in a bloody border conflict last year and saw India ban 220 Chinese tech apps.

But that did not stop China leapfrogging the US in 2020 to become India’s biggest trade partner.

Two-way trade between the long-standing economic and strategic Asian rivals stood at $77.7bn (£55.2bn) last year.

Although this figure was lower than the previous year’s $85.5bn total, it was enough to make China India’s largest commercial partner, according to provisional data from Delhi’s commerce ministry.

Global trade flows have been muted during the pandemic, although there has still been strong demand for medical equipment and supplies.

Despite efforts by India to become more self-reliant and curb trade with Beijing, it still relies heavily on Chinese-made heavy machinery, telecom equipment and home appliances.

Total imports from China stood at $58.7bn, which were more than India’s combined purchases from the US and UAE - its second and third largest trade partners.

"The continuing dependence on Chinese imports is lack of availability of these at home," said National University of Singapore economist Amitendu Palit who specialising in international trade.

"Imports from China are cheap and available quickly in sufficient amounts. Imports from several other sources are not as cost-effective, and as easily available, as they are from China," he added.
The two nations were involved in a Himalayan border dispute last June that saw at least 20 Indian soldiers killed in a clash with Chinese forces.

Last week, China revealed that four of its soldiers had also died in the battle.

The incident was the first deadly clash in the border area for at least 45 years.

In response to the clashes, India’s government banned TikTok, WeChat and more than 200 other Chinese-made apps in June saying they were a danger to the country.

In a statement, it said the apps were "prejudicial to sovereignty and integrity of India, defence of India, security of state and public order".