China and India are reshaping trade in 2025. From China’s revised Foreign Trade Law to India’s export reforms, discover how bilateral trade, sectoral dynamics, and regional economic shifts are redefining Asia’s economic landscape.
China and India are reshaping how they engage with global trade in 2025. China’s legislature recently passed a major revision to its Foreign Trade Law, which takes effect on March 1, 2026. The law strengthens China’s ability to manage disputes, expand digital and green trade, and protect strategic sectors. For the first time in over two decades, Beijing has codified a framework that balances state control with predictable legal structures, giving domestic and foreign companies clarity while safeguarding national economic interests. The revised law also broadens countermeasure authority in trade conflicts, integrates environmental standards, strengthens intellectual property protection, and supports critical industries.
India, meanwhile, is modernizing its trade strategy under the Foreign Trade Policy 2021–26, aiming to double exports by 2030. Recent reforms include consolidating export support schemes via the Export Promotion Mission, streamlining customs inspections, and negotiating trade agreements with the UK and European Free Trade Association. High-growth sectors such as textiles, pharmaceuticals, engineering goods, and marine products are receiving targeted support. These reforms aim to boost competitiveness, ease compliance, and diversify India’s export markets.
Despite political tensions, China and India maintain deep economic ties. Bilateral trade totaled around $127.7 billion in 2024–25, with China’s exports to India far exceeding Indian exports to China. Imports from China reached approximately $113.5 billion, while Indian exports to China were about $14.25 billion, creating a trade deficit of nearly $99.2 billion. Electronics, machinery, and chemicals dominate China’s exports, while petroleum products, telecom components, and seafood form the bulk of Indian exports. Analysts project the deficit could reach $106 billion in 2025, reflecting persistent structural asymmetry.
Both countries are adjusting policies to respond to these dynamics. China’s law strengthens its legal toolkit to protect strategic industries, regulate sensitive exports and imports, and enforce intellectual property rules. India is promoting local manufacturing to reduce dependence on Chinese intermediate goods, improving trade infrastructure, and diversifying export markets through new trade agreements. Export facilitation, digital trade adoption, and quality control measures are central to India’s approach, while China emphasizes legal codification, environmental standards, and digital trade compliance.
Economic cooperation continues alongside competition. Officials from both nations engage in dialogue to ease trade frictions, enhance logistics, and explore collaboration in green energy, electric vehicles, and digital trade standards. Chinese investments in Indian manufacturing and infrastructure complement Indian participation in pharmaceuticals, auto components, and technology sectors in China. This interdependence stabilizes the relationship, even amid political and strategic tensions.
The regional impact is significant. China’s export strength and legal reforms influence supply chains across South and Southeast Asia, while India’s expanding export capabilities and trade agreements shape investment patterns and market opportunities. Neighboring countries, from Bangladesh to ASEAN members, must navigate opportunities and dependencies created by the economic giants. India’s growing engagement with Africa, the Gulf, and the European Union further extends its influence, while China’s manufacturing dominance continues to shape sourcing and trade routes in the region.
In conclusion, 2025 is pivotal for trade in Asia. China strengthens legal, digital, and environmental frameworks to secure exports and manage disputes, while India drives export growth, market diversification, and trade facilitation. Bilateral trade remains significant but asymmetric, reflecting both opportunity and strategic challenge. Cooperation in targeted sectors and sustained dialogue show that economic interdependence will continue to shape regional stability, investment flows, and supply chains. These policy changes will influence the trajectory of trade, economic growth, and regional integration for years to come.
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