India-China Economic Relations


With the swift development of trade and economic relations, China has become one of India’s biggest trading partners. Both the countries have similarities and complementarities, and there are opportunities to learn from each other to offset their weaknesses in the fields of economic and social development. It is well known that China’s hardware and India’s software are complementary!

Companies from both countries are pro-actively looking at large investment opportunities in each other’s country. India has undertaken new developmental and business initiatives, such as liberalized FDI policy, Make in India, Digital India, Smart Cities and Skill Development which offer significant investment opportunities for Chinesebusinesses in India.

Many Indian banks have established their presence in China in the last few years. Four Indian banks, namely, State Bank of India (Shanghai and Tianjin), Canara Bank (Shanghai), Bank of Baroda (Guangzhou) and Bank of India (Shenzhen) have branch offices in China. Besides, the following representative offices of Indian banks are also operating in mainland China:

  • Axis Bank, Shanghai
  • Punjab National Bank, Shanghai
  • Union Bank of India, Shanghai
  • ICICI Bank, Shanghai
  • Bank of India, Beijing
  • Union Bank of India, Beijing
  • Allahabad Bank, Shenzhen
  • Indian Overseas Bank, Guangzhou

More Indian banks are planning to upgrade their Representative Offices in China to branch offices and existing branch offices are applying for RMB license. Axis Bank and ICICI Bank (Shanghai) have also obtained permission for branch offices.


India-China FDI synopsis

Share of china in fdi equity inflows from april 2000 to september 2015

  • Rank: CHINA ranks 17th.
  • Percentage share of total FDI inflows: is 0.47%.
  • Total FDI Inflows from CHINA: are US$ 1.24 billion.


Top sectors that attracted FDI equity inflows(from April 2000 to September 2015), from CHINA, are:

  • Automobile Industry (60%)
  • Metallurgical Industries (14%)
  • Electrical Equipments (4%)
  • Industrial Machinery (4%)
  • Power (3%)

FDI equity inflows from China (April 2000-September 2015)

Financial year-wise inflows of foreign direct investment

Financial Year (April-March) FDI equity inflows From CHINA(US$ in millions) FDI equity inflows from all Countries (US$ in millions)
2013-14 123.99 24,299
2014-15 494.75 30,931
2015-16 (upto Sept.15) 344.26 16,631
  • Note: These amounts include the inflows received through FIPB/SIA route, acquisition of existing shares, RBI’s automatic route and RBI’s – NRI schemes.
  • Data in respect of ‘Re-invested earnings’ & ‘Other capital’ for the years 2013- 14, 2014-15 are on an estimated basis. It is estimated by RBI as an average of the previous two years.
  • According to the Department of Industrial Policy and Promotion, FDI in India grew 42% between June 2014 and March 2016 on the back of initiatives such as Make in India and liberalised FDI policy.
  • During 2015-16 FDI inflows grew 29% to $40 billion from $30.93 billion in the previous fiscal, recording highest FDI inflow in the country since 2000-01

Chinese Companies Investing in India

Company Sectors
Beijing Automotive Industry Corporation (BAIC) Automobile
Sany Heavy Industry Ltd Construction
TCL Electronics
Haier Electronics
Shanghai Electric Electronics
Harbin Electric Electronics
Dongfang Electric Electronics
Shenyang Electric Electronics
China Dongfang International Electronics
Sino Hydro Corporation Engineering
Chongqing Lifan Industry Ltd General Industrials
Nippon Paint (India) Pvt Ltd Industrial Manufacturing
Jushi India FRP Accessories Pvt Ltd Manufactureof Plastic Products
WISCO (I) P. Ltd Manufacture of Metallurgical Machinery
YAPP India Automotive Systems Pvt Ltd Manufactureof Plastic Products
Sinosteel Mineral Resources
XINDIA Steels Ltd. Steel
Shougang International Steel
Baoshan Iron & Steel Ltd Steel
Huawei Technologies Telecom
ZTE Telecom

Details of top FDI inflows received from china (Apr 2000- Sep 2015)

Name of Indian Company Name of Foreign Collaborator Sector AMOUNT OF FDI Inflows (In US$ million)
General Motors India Pvt Ltd SAIC General Motors Investment Ltd Manufacture of passenger cars 588.46
Foton Motors Mfg India Pvt Ltd Beiqi Foton Motors Co Ltd Manufacture of motor vehicles for the transport of goods, Manufacture of special purpose heavy motors 93.86
Tbea Energy (India) Pvt Ltd TBEA Shenyang Transformer Group Ltd. Manufacture of electric power distribution transformers, arcwelding transformers, fluorescent ballasts 50.7
China Steel Corporation India Pvt Ltd China Steel Corporation Manufacture of other basic iron and steel N.E.C. 79.67
Visa Bao Ltd. Boasteel Resources Co Ltd. Manufacture of ferro alloys 32.80
Liugong India Pvt Ltd Gaungxi Liugong Machinery Co. Ltd. Wholesale of construction and civil engineering machinery and equipment 14.54
Highly Electrical Appliances India Private Limited Shanghai Hitachi Electrical Appliances Co. Manufacture of pumps,compressors,taps & valves 22.51
Xindia Steels Limited Xiangfen County Hongda Group Cement & Bl Manufacture of iron & steel in primary forms 14.62
Dongfang Electric India (Pvt) Ltd Dongfang Electric Corporation Ltd Renting of other industrial machinery and equipment. (this group includes the renting or leasing 12.09
ZTE Kangun Telecom Company (I) P. Ltd ZTE Corporation Repair enterprises 12.60
YAPP India Automotive Systems Pvt Ltd YAPP Automotive Parts Co Ltd Manufacture of plastic products 8.59
ESSEL Ahmedabad Godhra Toll Roads Ltd China Railway 18th Bureau Corporation Ltd Construction and maintenance of roads, railways, bridges, tunnels, pipelines, ropeways and Ports 10.70