Resumption of Direct Flights Between India and China

Discussions on restarting direct flights between India and China are underway. This could positively impact their economic relations.

Common Concerns and Economic Ties

• The two countries share concerns over: 
  1. Capital controls
  2. Energy security under threat from US protectionism
• Both economies aim to diversify their trade in response to US tariffs affecting their export markets.
• China has a significant trade surplus with India, which could be balanced by increased investment.
• Resumption of flights is crucial for people-to-people contact necessary for enhancing economic ties.

Diplomatic and Strategic Relations

India has made strides in normalizing relations with Beijing but must clearly differentiate between economic and strategic relations.

• India has refrained from participating in: 
  1. China's Belt and Road Initiative (BRI)
  2. The world's largest trade bloc centered on Chinese manufacturing
• Concerns include: 
  1. Debtor distress from Chinese infrastructure funding
  2. Global economic fissures from regional free trade arrangements

Bilateral Economic Engagement

Despite multilateral concerns, bilateral economic engagement promises benefits.

• India is pursuing Bilateral Trade Agreements (BTAs), excluding China.
• China remains one of India's largest trading partners.

Aviation Sector

• China and India are the second and third largest aviation markets, respectively.
• Resumption of direct flights will boost business and leisure travel.
• Bolstering travel with China may help India develop its aviation hubs.
• With increasing numbers of global travelers, both nations should focus more on regional connections.