Sanjeev Sanyal says China remains too important to India’s trade and supply chains to be ignored, but New Delhi must retain safeguards around critical sectors such as telecom and semiconductors.
India cannot afford to simply exclude China from its economic strategy despite continuing geopolitical and security concerns, Sanjeev Sanyal said in an exclusive conversation with Firstpost, arguing that New Delhi needs to engage Beijing while simultaneously diversifying its trade and supply-chain relationships.
“You cannot wish China away. China is the world’s largest industrial country,” Sanyal said, stressing that China remains a major source of industrial inputs as India seeks to strengthen its manufacturing capabilities and integrate further into global supply chains.
His comments come as the global trading system faces growing disruption from geopolitical conflicts, tariffs and supply-chain shocks. Sanyal said India needs to remain “nimble” and develop trade, investment and supply-chain relationships with multiple countries. Quoting External Affairs Minister S Jaishankar, he said the world had moved from “just in time to just in case”, making supply-chain resilience increasingly important.
India has been pursuing trade agreements with several economies, including Australia and the UK, while negotiations with Canada and the European Union continue. Even amid tariff disagreements with the US, engagement with Washington remains part of India’s strategy.
But China presents a distinct challenge because of the scale of its industrial ecosystem. “They are the source of lots of inputs. They’re also an export market of some size,” Sanyal said, adding that India should seek to increase its exports to China even though the bilateral trade relationship remains heavily tilted towards imports from China.
More from BusinessAt the same time, he said economic engagement cannot override India’s strategic concerns. “We will continue to monitor and limit Chinese involvement in certain sectors of the economy. But on the others, we should engage them.”
On sensitive sectors such as telecom, Sanyal said India should prevent foreign control over critical infrastructure. “What we don’t want is another country taking control of our telecommunication system.” But he argued that concerns over telecom should not automatically prevent trade in other areas, such as ready-made garments.
On Chinese investment, Sanyal pointed to changes to Press Note 3, saying India is already moving towards greater engagement but “at our own pace” and “on our own terms”.
Sanyal placed the China debate within a wider shift in global geopolitics, arguing that the old international order is breaking down while a new one has yet to emerge.
For India, he said, the answer is flexibility, maintaining multiple partnerships and pursuing a multi-aligned approach. The message on China is therefore pragmatic: India can diversify away from excessive dependence, but given China’s industrial scale and role in global supply chains, complete disengagement is not a realistic economic strategy.
