INDIA – CHINA: TRADE RELATIONSHIP OR DEFICIT RELATIONSHIP?

India and China has one –third of the world's population. They are not only the neighboring countries but since 2008 there are the biggest trading partners. China is three times bigger than India in size. They both are the biggest growing economies of the world and have high purchasing powers. Between India and China the trade is about 90 billion $, but this relationship is more favorable for China as compared to India. The trade deficit between India and China is very high. This paper gives some suggestion to how correction of imbalances of payment can be done.