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Significance

Between April 2000 and March 2024, China accounted for less than 0.4% of India’s FDI equity inflows. India-China ties remain under strain because of a border stand-off in the western Himalayas, now into its fifth year. Delhi has frequently ruled out normalisation until the situation is resolved.

Impacts

Reducing its trade deficit with China will remain a top priority for India.

India will draw closer to the United States, Japan and Australia, its partners in the Quad.

Delhi-Beijing competition for regional influence will intensify.

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