Abstract
This research paper attempts at analyzing bilateral trade and economic growth of India and China and explore future implications of their trade and economic cooperation. This paper examines the changes and major movements in the exports, imports, trade openness, and terms of trade and gross domestic product of both countries. Appropriate statistical methods are applied to obtain results which reveal that exports and imports of China are higher than India’s which has resulted in much better integration with the world economy for China as compared to India. The lack of significant difference in TOT implies a relatively balanced economic relationship. No significant difference in trade openness suggests that both countries are equally open to international trade. Significant difference is observed in the GDP and GDP growth over the time period under study. The large size of the economy and rapid growth shows that China has significantly scaled up its economy. Regarding bilateral trade, there has been substantial increase in bilateral exports and imports but a statistically significant difference is observed in their performance. India’s imports from China outperformed the exports from the country to China. This has resulted in trade imbalance and it is skewed in favor of China. Policy makers need to focus on other areas to improve bilateral trade such as infrastructure, reduction in barriers to trade, technology exchange, innovation, sustainable trade practices and diversification in types of goods traded.
Keywords: Bilateral Trade, Comparative Analysis, India-China, Trade Performance