Akshat Srivastava, founder of Wisdom Hatch, in a note on X, drew a stark comparison of the economic chasm between India and China: China's trade surplus is $1 trillion, 26% of India's GDP — while India contends with $73.5 billion. Trade deficit.
“Until the late 80s, both countries were net importers. Today, China is building next-generation exports in robotics, semiconductors and AI. India? Our greatest hope seems to be to export smart people and rely on remittances,” he wrote.
The figures reflect a deep reliance on Chinese imports, particularly in critical sectors such as electronics, chemicals and renewable energy. Despite initiatives such as the Production Linked Incentives (PLI) scheme launched in 2020 to strengthen domestic manufacturing, India's dependence has grown, raising questions about its global competitiveness.
Economists argue that India needs structural reforms to address this imbalance.
Deloitte India's Rumki Majumdar advocates for greater investment in R&D: “India needs to improve its manufacturing competitiveness by moving up the value chain and encouraging local manufacturing.”
With Union Budget 2025 around the corner, experts are calling for decisive steps. Expanding the PLI scheme to include more sectors, diversifying supply chains and encouraging foreign direct investment (FDI) are some of the strategies being discussed.
Gopal Jain, managing partner at Gaja Capital, recently called for a pragmatic approach: “India should welcome global investment and focus on creating mutually beneficial trade partnerships. This is critical to reducing dependency and strengthening our economic resilience.