How India became dangerously addicted to Chinese imports
Despite India's efforts to reduce economic dependence on China through tariffs and trade restrictions, the bilateral trade deficit has continued to grow significantly. While specific sectors like toy manufacturing have seen success in localizing production, overall industrial reliance on Chinese imports remains high.
Why it matters
It illustrates the difficulty of decoupling major economies and the complex geopolitical tension between India and China.
Image source, AFP via Getty Images Image caption, Xi and Modi have vowed to address growing trade imbalances
Take a walk into an Indian toy shop and as well as picking up a new favourite plaything for a child, you might just get an insight into how the nation is battling for a batter economic relationship with its all-powerful neighbour China.
Six years ago, in an attempt to push local manufacturing and keep substandard toys out of its market, India raised tariffs on imported toys from 20% to 60% and eventually to 70%.
Retailers were up in arms and said that domestic firms could never match the foreign-made stuff. But the combination of higher customs duties and quality control standards worked.
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