Some have come to see the booming bilateral trade between the two countries as a steadfast pillar of India-China cordiality. When searching for positive trends in China-India relation post the 1962 war, nothing beats their bilateral trade relations. Though starting with an extremely slow pace, their trade has now effectively occupied the centre stage of their interaction. These two nations had signed an important agreement called the 'Panchasheel' on April 29, 1954. It was an agreement stating five principles of trade between the India and China, so as to promote the peaceful coexistence between the two. However, these principles became obsolete soon after, with the war of 1962. Even though India China trade is seen as something that could bridge the bitter relations between these countries, it should be noted that the bilateral trade is heavily dominated by China. According to The Hindu, "trade deficit between India and China increased about 34 percent to USD 48.43 billion in 2014-2015 from USD 36.21 billion in the previous fiscal." India's export to China is nowhere in league with the import. China restricts Indian companies from entering many sectors, shows an institutionalised preference for its state owned enterprises, and provides subsidies to its companies that some claim overstep international trade law. Thus, their economic engagement is measured more in terms of the political impact of the trade, rather than in terms of profits and statistics; as stated by Swaran Singh, "China uses trade as its diplomatic tool.".
STRATEGIC OUTLOOK .
China has always played a game of strategic encirclement when seeking to assert its dominance. Moving into empty regions, nibbling away at India's borders, weakening enemy's strategic potential, intruding into areas previously declared restricted or barren; these are all very familiar practices for China. The Chinese play a game of hoping to spread influence and making sure that issues do not develop into full scale conflicts, when concerning India's neighbouring countries.
