Rakesh Mohan, a member of the Prime Minister's Economic Advisory Council, has called for India to attract greater Chinese investment and strengthen trade ties to create jobs and boost exports. According to reports from Business Standard, Mohan advocates for leveraging India's low manufacturing wages to attract capital from Asia's largest economy, particularly in labour-intensive sectors such as textiles, garments, footwear and furniture. The former Reserve Bank of India Deputy Governor emphasized that India should encourage Chinese manufacturers to invest in these sectors where India can compete effectively.
As reported by Business Standard, Mohan highlighted India's significant trade dependency on China, stating "We are importing everything from China and exporting very little." He noted that India imported more than ₹130 billion worth of goods in the fiscal year-ended March, making deeper engagement with Beijing unavoidable. The adviser called for detailed analysis of what China imports and where India can compete effectively in these markets.
According to the report, Mohan urged New Delhi to reconsider its decision to stay out of China-backed RCEP, which India opted out of in 2019 over concerns that cheaper imports would hurt domestic manufacturers and farmers. He also called on India to seek membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. These trade blocs would deepen India's integration with Asian supply chains, strengthen its manufacturing base and boost exports to Western markets, as reported by Business Standard.
As reported by Business Standard, the recommendations come amid shifting geopolitical dynamics, with President Donald Trump's tariff policies raising doubts about the US as a long-term economic partner. Mohan noted that "We need to be much more part of the Asian supply chain" and called for further easing of restrictions on business travel and people-to-people exchanges. The comments challenge New Delhi's economic strategy following deadly border clashes in 2020, when India tightened scrutiny of Chinese investment. Mohan argued that "We have to be pragmatic in our dealing with China" and emphasized that "Economic security is as important as national security."
According to the report, India and China have taken steps to repair relations over the past year, with India restoring direct flights, resuming business visas and approving select Chinese investments in sectors such as electronics. However, China continues to restrict exports of critical materials and technologies, including rare earths, while India maintains some restrictions on investment and business. Mohan emphasized that "We need to be pragmatic in our dealing with China" and called for pragmatic dealing with China, noting that "We have to be much more part of the Asian supply chain."
