India-China Trade: Why Deficits Aren’t The Enemy: Montek Singh Ahluwalia Explains

At the BT India@100 Summit, Montek Singh Ahluwalia, Former Dy Chairman of the Planning Commission addressed India’s trade relationship with China, emphasizing that while security concerns must take precedence, economic engagement should not be dismissed. He argued that India should not fall into the "Trumpian" trap of obsessing over bilateral trade deficits, especially with China. As long as India’s overall balance of payments is stable, a trade deficit with China is not inherently problematic. Ahluwalia stressed that successful trade deals often occur between competitors, especially when they operate at different stages of the value chain. Instead of isolation, he advocates for strategic engagement with China and regional partners like RCEP, urging India to adopt a broader, pragmatic trade strategy in a shifting global order.