Trade hopes lift after India-China meet, optimism prevails after renew in relationship
Telegraph | 3 September 2025
A thaw in India’s strained relationship with China has renewed optimism among several city-based businesses, including seafood exporters, leather merchants, and chemical importers.
The hopes stem from Sunday’s bilateral engagement between Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation summit in Tianjin. Readouts from both countries highlighted a shared intention to expand bilateral trade and investment while working to reduce the trade deficit.
The recent 50% tariff imposed by the US under President Donald Trump’s administration has severely impacted Indian seafood exports, pushing exporters to explore alternative markets. The steep tariff, which took effect on August 27, threatens job losses in the leather, garments, and seafood export sectors.
Many Calcutta businesses believe the Modi-Xi meeting could mark the beginning of a more favourable trade environment with China.
Seafood exporters
On Monday, a number of frozen seafood exporters in Calcutta received calls from Chinese importers enquiring about additional shipments, suggesting a renewed interest from buyers in the region.
China is a major market for frozen seafood from India, including shrimps from Bengal. According to Rajarshi Banerji, president of the Seafood Exporters’ Association of India’s Bengal region, around 70,000 to 75,000 tonnes of frozen seafood are exported from Bengal each year.
“The additional tariff and duties by the US had posed a huge challenge to Indian seafood exporters. Exporters from Bengal are in discussions with buyers in China and Vietnam to explore whether cargo can be redirected to those countries instead of the US from now on,” said Banerji.
Businessmen are also hoping the diplomatic breakthrough will lead to easier visa access, lower import-export duties, and potential tie-ups with Chinese firms to either set up operations in India or boost local production.
Leather traders
The leather industry, another key export sector in Calcutta, is also hopeful that improved relations could lead to a revival in trade volumes. Finished leather is exported from Calcutta to China, while components for leather products — such as zips and metal buttons — are often imported from Chinese suppliers.
“About 10 years ago, around 25% of Calcutta’s finished leather exports went to China. It has now dropped to around 10% due to restrictions imposed by China,” said Zia Nafis, owner of Nafis Tanning Industries. “If these restrictions are lifted, the market can be explored again.”
A leather bag exporter who ships to Europe said he sources hard components from China. “The quality is good and the price is competitive. But supplies are often irregular,” he said.
Some leather traders are particularly keen to see visa restrictions eased. “Because of the current curbs, we often can’t travel to China, which limits our ability to find new clients,” one businessman said.
Others are looking beyond trade to technology partnerships. “Several companies from China and Taiwan are collaborating with shoe manufacturers in south India,” said Kevin Juneja, managing director of JC International. “If we can have similar collaborations here, it will boost our business. The Chinese technology is better, and their production process is more efficient.”
Chemical importers
The diplomatic development has also sparked hope in the chemical sector.
Zia Nafis, who owns Elegant Fashion Fiber Chemical, said his company’s imports of organic fertiliser from China have dropped by nearly 50% since 2021.
“Besides China, Australia and Canada are also sources. But Chinese products are more competitive in price,” he said. “The dip was primarily because of restrictions from China. If those are eased, we could scale up imports and reclaim our market.”