Global economic challenges, including US tariffs of 50% on India and 30% on China, are prompting both nations to seek enhanced economic cooperation, with India considering re-entry into RCEP as a strategic move.

China is willing to invest in India by opening factories and branches, aiming to leverage India's strong service sector and tourism, especially as China's GDP growth slowed to 5% in 2024 while India maintained a robust 7.8% growth.

India initially stayed out of RCEP in 2019 to protect its domestic industries from cheap Chinese imports, particularly in electronics, machinery, and dairy, citing concerns over service and investment conditions.

India faces the challenge of balancing its national interests with the need to open new avenues for trade and cooperation with China to promote economic stability.

India is actively securing critical resources by partnering with Kia to import rare earth elements from Myanmar, reflecting a focus on future resource needs.

Experts see AI and green energy transitions as key drivers for future investment and growth, with China focusing on boosting domestic consumption to counter global uncertainties.

Joining RCEP could improve India-China trade relations by making Indian products more competitive globally and reducing tariffs within the bloc over the next decade.

India's trade deficit with China widened in 2024-25, with exports falling 14.4% to $14.3 billion and imports rising 11.5% to $113.4 billion, deepening economic imbalances.