Despite the border clash India cannot disengage from China wholly

India banned dozens of Chinese mobile apps last week, which drew Beijing’s ire. It has been reported that China began pulling back troops from along the contested border. But experts say it is difficult for New Delhi to disengage from Beijing and reduce its ties in the near term because of how intertwined the countries have become in recent decades.

Data shows China’s influence in trade, investments and technology in India has grown substantially over the years.

Government data showed India imported more than $65 billion worth of goods from China between April 2019 and March this year and exported only around $16.6 billion worth of products. That left New Delhi with a more than $48 billion trade deficit with Beijing. Still, trade volume is down from the previous fiscal year that ended in March 2019 while reports suggest India is planning additional duties on certain Chinese imports.

India imports intermediate and finished products from China including electrical machinery and equipment, consumer electronics, chemicals, pharmaceuticals and electronic components among others.

Chinese investments into Indian companies have steadily grown in recent years, data showed.

Chinese investors have put an estimated $4 billion into Indian start-ups, according to a report from foreign policy think tank Gateway House earlier this year. As of March, 18 of India’s 30 unicorns - start-ups valued over $1 billion - have received funding from Chinese investors.

Gateway House provided three reasons why Chinese firms dominate India’s nascent technology space. First, there are no major Indian venture investors for local start-ups, a gap that China took early advantage of when Alibaba invested into Paytm in 2015.

India is one of the fastest-growing digital consumer markets in the world, with more Indians coming online every day. That makes the country a very lucrative market for tech companies. Chinese tech firms including Alibaba, Tencent and TikTok-owner ByteDance compete regularly with the likes of Facebook, Amazon and Google to reach Indian consumers.

But, India can implement restrictions in areas like the telecommunications sector where there are alternatives available, the analysts said. That means New Delhi could cite security and privacy concerns to block the likes of Huawei and ZTE from participating in the country’s telecom infrastructure. Some reports already suggest that Huawei could potentially be banned from India’s 5G rollout.