De-risking India’s Trade with China: Identifying Strategic and Critical Vulnerabilities

Published January 1, 2025

Executive Summary

This paper examines India’s import dependence on China across three product categories: Organic Chemicals, Machinery and Mechanical Appliances, and Electrical Machinery and Equipment. Given that these three categories account for over two-thirds of India’s total imports from China, this study seeks to examine whether India’s dependence renders it strategically vulnerable.

Using the Strategic and Critical Vulnerability (SCV) Framework and Relative Impact Factor-Product Complexity Index (RIF-PCI) scale, this study finds that an overwhelming number of items imported from China exhibit a product complexity of either ‘low to moderate’ or less. Only a few items such as heterocyclic compounds, machine tools, metalworking tools and certain types of textile machines, exhibit ‘high’ to ‘very high’ product complexity. But none of the items imported from China display an ‘Extremely High’ product complexity, suggesting their easy substitutability in case Beijing decides to weaponise its position vis-à-vis New Delhi. The resultant shock from any form of induced disruption in these three categories is likely to be short to medium-term.

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