India China Trade: The Indian government is now sharpening its strategy on the trade front with China. The Commerce Department has started preparing a detailed list of all the trade barriers that Indian service exporters face in China. These problems mainly involve strict licensing rules, complexities of registration, pressure of local laws. According to a report in the Economic Times, China is identifying trade barriers in the goods as well as services sector.

India’s position in the vast market of China

China is one of the world’s largest importers of services. About $300 billion worth of services are imported there every year. Compared to that, India’s service export to China is very less. According to the year 2024 data, India exported only $8.95 billion in total services to China. According to an industry representative, India’s share is very small considering China’s huge market. India mainly has its hold in areas like Information Technology (IT), IT based services, digital solutions. But Indian companies are unable to utilize their full potential due to the strict regulations there.

Which rules cause the most problems?

Indian companies have to go through many strict rules to do business directly in China. The Commerce Department has sought detailed information from industry on China’s data localization, cybersecurity and cross-border data transfer requirements. Apart from this, problems like delays in obtaining visas, work permit conditions, non-recognition of professional qualifications are also included in this list. When Indian companies want to send their talent to China, they face severe mobility restrictions. Service exporters have also raised their concerns like tax, payment, remittance process, discrimination in getting contracts etc. before the government.

How do Indian companies work?

According to industry representatives, it is not that Indian companies are not present in China. She is actively working there, but her way of working is not straightforward. Most Indian companies do not directly export services to their customers. Instead, they work for other organizations representing the primary client. The department has now also sought a report from these companies on the status of cross-border virtual delivery. In addition, information is also being collected on the business presence, ownership, local partnerships and operational requirements of these companies in China.

US, Britain lead in commercial services exports

If seen at the global level, America and Britain are at the forefront of commercial services exports. But India is also progressing rapidly. India’s share of world services exports increased from 3 percent in 2014 to 4.3 percent in 2024, while China’s share increased from 4.2 percent to 5.1 percent during this period. Before the Covid pandemic, India’s services export growth was 7.6 per cent, which has increased to 14 per cent between 2022-23 and 2024-25. The main reason behind this is the growing global demand for space and digital services.