By The South Asia Times

NEW DELHI:  Despite aggressive moves to curb Chinese digital influence, Beijing continues to dominate India’s economic landscape, underscoring a widening gap between political rhetoric and market realities as New Delhi’s ties with its northern neighbour remain deeply entangled.

In recent years, the Indian government has taken sweeping action against Chinese technology firms, banning more than 1,000 Chinese mobile applications on national security and data privacy grounds. The measures were projected as a decisive pushback against Beijing.

Yet while China’s digital footprint has been curtailed, its economic grip on India remains largely intact, particularly across critical industrial and manufacturing sectors. Analysts says that Beijing’s leverage today is structural rather than military, arguing that China “doesn’t need to invade, India is already surrounded economically.”

- A trade relationship skewed in China’s favour

India continues to run a massive trade deficit with China, estimated at $99.2 billion (approximately ₹8.7 lakh crore) in fiscal year 2024–25,  one of the largest bilateral trade imbalances India faces.

Exports to China hover below $15 billion, while imports exceed $113 billion, driven largely by electronics, machinery, pharmaceutical inputs, chemicals and industrial intermediates. The numbers reflect not just trade imbalance but deep supply-chain dependency.

- Dependence in high-value industries

Industry data and economists point to several sectors where China’s dominance remains difficult --  if not impossible -- to replace in the near term:

Smartphones and electronics: While software bans made headlines, hardware dependence persists. Chinese brands, components, and sub-assemblies continue to underpin India’s smartphone ecosystem, even where final assembly occurs domestically.

While India’s pharmaceutical sector, which is often called the “pharmacy of the world”,  still sources a large share of its active pharmaceutical ingredients (APIs) and key starting materials from China, estimated at 60–70% for certain categories.

India is  also expands its solar capacity andremains reliant on Chinese photovoltaic cells, wafers and modules. China controls much of the global solar manufacturing chain, a dominance that India has struggled to offset despite incentive schemes.

These realities raise uncomfortable questions about the effectiveness of India’s flagship “Make in India” campaign, with critics arguing that self-reliance remains more aspirational than operational.

• China’s captured markets - no easy exit for India

Strategists increasingly acknowledge that India cannot simply “ride away” from China, as Beijing has already captured large segments of the Indian market that no alternative supplier can quickly replace, whether in cost, scale, or speed.

The contradiction between nationalist messaging,  amplified across platforms like WhatsApp, and economic dependence is becoming sharper. Public calls for boycotts coexist with quiet but continued reliance by Indian manufacturers and importers.

This tension has grown more visible following India’s brief but politically unsettling military defeat against Pakistan in May last year, which exposed vulnerabilities not only on the security front but also in regional perception and strategic confidence. Since then, analysts say that New Delhi appears increasingly uneasy, diplomatically cautious, economically constrained, and strategically boxed in.

- Influence Without Invasion

Many experts argue that China’s strategy relies less on confrontation and more on supply-chain dominance, giving it long-term leverage without deploying force. Trade, technology inputs and industrial interdependence, they say, have proven more effective than coercion.

India has pushed Chinese apps out of its phones, but Chinese goods still power those phones, along with its medicines, factories and solar ambitions.

Political slogans may shape headlines, but markets, it appears, continue to shape reality.