Morgan Stanley economist Chetan Ahya says that India’s trepidations about the One Belt One Road initiative will do little to stem the expansion of China’s manufacturing exports to the sub-continent.
Speaking to Caixin Ahya said that while India has refused to participate in the One Belt One Road initiative largely due to lingering border disputes and China’s relationship with Pakistan, Sino-Indian trade relations are seeing rapid growth, and China continues to enjoy a huge trade surplus with India.
India refrained from sending any representatives to the One Belt One road summit held in Beijing last month, due to disagreements over the China-Pakistan Economic Corridor.
Despite this diplomatic snub, Ahya believes that it will not be possible in future of India to suspend or reduce trade with China, and that Chinese enterprises will continue to invest and trade in the sub-continent.
Any reluctance on the part of the Indian government to support One Belt One Road will have little impact on Chinese imports, particularly given the huge presence that they’ve already established in certain key sectors.
Data from the International Data Corporation indicates that Chinese manufacturers already lay claim to a 51.4% share of the India mobile phone market, a figure which rises to 80% when phones made in China by overseas corporations are taken into account.
Another key area where Chinese importers are clearly dominant is solar panels, with Middle Kingdom manufactures serving as the chief beneficiaries of the Indian government’s strong push for clean energy. The total value of India’s solar PV imports for the 11 month period to February 2017 was USD$2.5 billion, of which $2.2 billion were sourced from the Middle Kingdom.