India and China have had a long history of bilateral trade that goes back centuries. The two countries have established a strong economic relationship and are part of various regional and international trade blocs. In recent years, the bilateral trade between India and China has grown rapidly, making China India`s largest trading partner.

The two countries have signed several agreements to enhance their trade relations. One of the most important agreements is the India-China bilateral trade agreement signed in 1984. The agreement aimed to promote and improve trade between the two countries by reducing tariffs and non-tariff trade barriers.

Under the agreement, both countries agreed to extend Most Favored Nation (MFN) status to each other. The MFN status is an international trade rule that requires countries to extend the same trade concessions and benefits to all other countries that they extend to their most favored trading partner. This meant that India and China agreed to treat each other as their most favored trading partner, making it easier for them to do business with each other.

Since the signing of the agreement, there has been a significant increase in trade between India and China. According to data from the Ministry of Commerce and Industry, the bilateral trade between the two countries reached $92.68 billion in 2020. The two countries have set a target of $100 billion in bilateral trade by the end of 2021.

India exports various goods to China including iron ore, cotton yarn, and organic chemicals, while China exports electronics, machinery, and chemicals to India. However, there have been concerns about the trade deficit between the two countries, with India importing significantly more than it exports to China. The two countries have been working to address this issue by encouraging more Indian exports to China.

The recent tensions between India and China over their border dispute have raised concerns about the future of bilateral trade between the two countries. However, both countries have expressed their commitment to maintaining their trade relations and have continued to engage in trade talks.

In conclusion, the India-China bilateral trade agreement has been instrumental in promoting trade between the two countries. The agreement has allowed for easier trade access and has increased the volume of trade between the two countries. However, there are still challenges to be addressed, such as the trade deficit. The two countries will need to continue working together to address these challenges and ensure the sustainability of their trade relationship.