Impact of WTO on Bilateral Trade Between India and China

Abstract

Both India and China are large economies. Their domestic markets provide vast scope for diversified industrialization and trade. Both economies are classified by international agencies as emerging markets with potential for rapid economic growth. China’s entry into the WTO was an important event in terms of the integration of one of the world’s fastest growing economies. It would enable global trading to expand rapidly. It has opened up new opportunities and challenges to Indian enterprises in domestic, Chinese and global markets. Chinese products will compete in India’s domestic market on the basis of the WTO market access agreements. Similarly, Indian enterprises will get access to China’s domestic market. Both countries will compete on the same footing in the world market. Besides, both countries are making efforts to attract FDI to expand production, upgrade technology and management practices. In the recent period, the Chinese trade regime has undergone many changes to bring in conformity with the rules and regulations stipulated as a condition to Chinese entry into WTO. Thus the present paper is an attempt to study the foreign trade policies of India and China; to study the impact of WTO on foreign trade policy of China and to study the impact of entry of China in WTO on bilateral trade between India and China.

Keywords: bilateral trade, export, import, foreign trade policy, balance of payment

JEL Classification: A1