Talks of resumption of direct flights between India and China are in the air. If air links are, indeed, re-established, they will have favourable knock-on effects on their economic ties. The two countries share a wide range of common concerns ranging from capital controls to energy security that are under threat from US protectionism. Both economies are seeking to diversify their merchandise trade as retaliatory US tariffs take a bite out of their principal export market. China runs a large trade surplus with India that could be offset by increased investment. All of these require people-to-people contact that was ruptured by suspension of flights between the two countries with the pandemic followed by border skirmishes.
New Delhi has covered some ground in normalising relations with Beijing. But it needs to draw a clearer line separating economic and strategic relations. India has not been a party to China's BRI, or to the world's biggest trade bloc built around Chinese factory output. It has done so with good reason. Chinese overseas infrastructure funding has led to debtor distress, while its regional free trade arrangement is causing fissures in the global economy. There is reason to be wary of China's multilateralism. Yet, there remains a wide swathe of economic engagement that could benefit through bilateralism. India is pursuing a course of BTAs, and China is a notable exception here considering it is among the country's largest trading partners.
Aviation is a case in point. China is the world's second-largest aviation market, and India is third. There can be little justification for these two markets to operate in isolation. The two countries drive business and leisure travel internationally, and both will benefit from resumption of direct flights. Bulking up travel with China also helps India pull aviation hubs onshore given their extensive border. The Chinese are currently the biggest bunch of globetrotters, and Indians are catching up. They ought to be paying more attention to their neighbours and neighbourhood.
New Delhi has covered some ground in normalising relations with Beijing. But it needs to draw a clearer line separating economic and strategic relations. India has not been a party to China's BRI, or to the world's biggest trade bloc built around Chinese factory output. It has done so with good reason. Chinese overseas infrastructure funding has led to debtor distress, while its regional free trade arrangement is causing fissures in the global economy. There is reason to be wary of China's multilateralism. Yet, there remains a wide swathe of economic engagement that could benefit through bilateralism. India is pursuing a course of BTAs, and China is a notable exception here considering it is among the country's largest trading partners.
Aviation is a case in point. China is the world's second-largest aviation market, and India is third. There can be little justification for these two markets to operate in isolation. The two countries drive business and leisure travel internationally, and both will benefit from resumption of direct flights. Bulking up travel with China also helps India pull aviation hubs onshore given their extensive border. The Chinese are currently the biggest bunch of globetrotters, and Indians are catching up. They ought to be paying more attention to their neighbours and neighbourhood.
