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India cannot realistically shut China out if it wants to build a successful manufacturing sector, according to Martin Wolf, chief economics commentator at the Financial Times.
Speaking to CNBC-TV18 ahead of the BRICS Summit in New Delhi, Wolf said China's dominant position in global manufacturing makes some level of economic engagement with Beijing unavoidable for India.
“For India to develop its manufacturing successfully in the current world, it can't freeze out China. It's completely impossible,” Wolf said.
India would need to work with Chinese companies through joint ventures, technology transfers and supply chains, while also allowing Chinese investment to contribute to the country's manufacturing capacity, he said.
“China is just too big to freeze out if India wants to be part of this new economy that is being created around China,” Wolf said.
His comments come as India and China appear to be moving towards a thaw in ties. Chinese President Xi Jinping is expected to attend the BRICS Summit in New Delhi, his first visit to India in seven years.
India faces a difficult China balancing act
Wolf said India's relationship with China would remain complicated because the two countries' interests do not always overlap.
“China's interests, economic and others, are not always going to be the same as India's, to put it mildly,” he said.
China is now the world's dominant manufacturing nation and the leading exporter of manufactured goods, Wolf said. Its scale also makes Chinese companies formidable competitors for manufacturers in other countries, including India.
That leaves New Delhi with a difficult balancing act. India needs closer economic ties with China to strengthen its manufacturing ecosystem, but also needs to guard against becoming overly dependent on its neighbour.
Wolf said India should therefore maintain strong relationships with several major economic powers rather than rely too heavily on any one country.
“I think that's what Indian policymakers are trying to make happen,” he said. “They want very good relations with China, but wary, and they want very good relations with other powers, Europe, the US, but also wary.”
India and China could both benefit from a more stable relationship and greater cooperation in areas where their interests overlap, Wolf said.
India is set to host the 18th BRICS Summit from September 12. The meeting comes as global trade remains uncertain and New Delhi seeks to expand manufacturing while managing its relationships with China, the US, Europe and other major powers.
Speaking to CNBC-TV18 ahead of the BRICS Summit in New Delhi, Wolf said China's dominant position in global manufacturing makes some level of economic engagement with Beijing unavoidable for India.
“For India to develop its manufacturing successfully in the current world, it can't freeze out China. It's completely impossible,” Wolf said.
India would need to work with Chinese companies through joint ventures, technology transfers and supply chains, while also allowing Chinese investment to contribute to the country's manufacturing capacity, he said.
“China is just too big to freeze out if India wants to be part of this new economy that is being created around China,” Wolf said.
His comments come as India and China appear to be moving towards a thaw in ties. Chinese President Xi Jinping is expected to attend the BRICS Summit in New Delhi, his first visit to India in seven years.
India faces a difficult China balancing act
Wolf said India's relationship with China would remain complicated because the two countries' interests do not always overlap.
“China's interests, economic and others, are not always going to be the same as India's, to put it mildly,” he said.
China is now the world's dominant manufacturing nation and the leading exporter of manufactured goods, Wolf said. Its scale also makes Chinese companies formidable competitors for manufacturers in other countries, including India.
That leaves New Delhi with a difficult balancing act. India needs closer economic ties with China to strengthen its manufacturing ecosystem, but also needs to guard against becoming overly dependent on its neighbour.
Wolf said India should therefore maintain strong relationships with several major economic powers rather than rely too heavily on any one country.
“I think that's what Indian policymakers are trying to make happen,” he said. “They want very good relations with China, but wary, and they want very good relations with other powers, Europe, the US, but also wary.”
India and China could both benefit from a more stable relationship and greater cooperation in areas where their interests overlap, Wolf said.
India is set to host the 18th BRICS Summit from September 12. The meeting comes as global trade remains uncertain and New Delhi seeks to expand manufacturing while managing its relationships with China, the US, Europe and other major powers.
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