Indian businesses should not be excessively dependent on one supply chain: Jaishankar on trade with China

External Affairs Minister Jaishankar emphasizes the need for a balanced approach in India's trade relations with China.

Indian businesses should take a "balanced" approach in dealing with China as excessive dependence on its supply chain could be detrimental to India's national interest, External Affairs Minister S Jaishankar said on Thursday (December 5, 2024).

In an interactive session at industry chamber Assocham, he said the recent resolution of the issues in the remaining friction points along the Line of Actual Control (LAC) in eastern Ladakh has resulted in "some progress" but there is a need for further discussions.

To a question on evolving relations with China, he said with that country accounting for 32-33% of global manufacturing, it is logical that several supply chains will have to go through China.

"It is a reality which we will have to factor [that] into our calculations."

"But it is also a fact that if you become excessively dependent on a single supply chain or in the name of supply chain, you open up your market that it is no longer a supply chain, but your sectors are getting hollowed out. You have to be careful," he said.

"Nobody is saying don't do business [with China]. But we are equally saying, think about it, weigh it, and look at the bigger-term implications, especially for micro, small & medium enterprises [MSMEs]," he said.

Mr. Jaishankar said India doesn't want to "end up as a market for another economy and not be able to compete with their products, which are dumped in our country".