ABSTRACT
It is well known that the economic engagement between the two Asian giants has been accompanied by a turbulent political relationship. Though there are examples of countries having good economic ties along with uneasy political relations (e.g. China and Taiwan), the dichotomy always creates anxiety over whether political problems will affect economic engagement and make it unsustainable in the longer term. Healthy political ties are considered conducive to bilateral economic engagement. Bilateral trade, investment and commercial transactions are expected to profit and multiply with improvement in mutual political ties. The reverse posturing underlines the possibility of bad political ties disrupting good economic relationships. Both underpin a positive association between political and economic ties with improvement (deterioration) in political ties similarly influencing economic ties. Like other bilateral relationships that possess these contrasting features, the India–China ties too cannot be outside the domain of this association, though until now the relationship has appeared to be progressing irrespective of the contrasts. Nonetheless, whether political tensions will affect the good economic relations between the two countries is a question that agitates not only the observers of the relationship, but also the different economic actors involved in the China–India bilateral economics.
