China drops 'developing nation' status: Implications for India's global trade strategy

Beijing’s decision to relinquish its ‘developing nation’ status in the World Trade Organization (WTO) is set to reverberate across global markets, with India likely to face both competitive pressures and strategic opportunities.

China’s commerce ministry confirmed on 24 September, Wednesday, that the country will no longer claim the special privileges traditionally accorded to developing nations, a move long demanded by the United States and hailed by WTO director-general Ngozi Okonjo-Iweala as “major news key to WTO reform”.

The change, first announced by premier Li Qiang in New York, signals China’s readiness to embrace stricter trade disciplines at a time when tariff wars and protectionist measures are reshaping the global economic order.

For India, the immediate impact will be felt in sectors where its exporters compete directly with Chinese products.

Sharing major news key to WTO reform! Premier Li Qiang of China has just announced that China will no longer have access to Special and Differential Treatment in new WTO Agreements. This announcement was made at a meeting convened by China on its Global Development Initiative on… pic.twitter.com/y0IT3exgaL

— Ngozi Okonjo-Iweala (@NOIweala) September 23, 2025

Giving up ‘developing country’ benefits means China will face tighter obligations to open up its markets and adopt reforms, but it may also accelerate its own liberalisation and strengthen its foothold in global supply chains.

Indian manufacturers in industries such as textiles, chemicals, electronics and machinery could face sharper competition in both domestic and overseas markets, pushing India to raise productivity, upgrade technology and move towards higher value-added production.

China’s shift also opens a window for India to reposition itself within the WTO framework.

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With Beijing aligning more closely with the demands of advanced economies for multilateral trade reform, New Delhi may emerge as a leading advocate for ‘genuine’ developing nations that lack China’s economic clout.

India could also press for enhanced special and differential treatment (S&DT) provisions tailored to lower-income countries, ensuring that smaller economies retain preferential access to global markets.

The development is expected to accelerate India’s trade policy diversification. New Delhi is likely to deepen free trade agreements (FTAs) with key partners and broaden export markets to reduce reliance on China, particularly as geopolitical tensions remain high.

Domestically, the government is expected to intensify manufacturing reforms under initiatives such as Make in India 2.0 and Bharat Trade Net, focusing on tariff rationalisation, logistics improvements and digital trade facilitation to enhance competitiveness.

The change may also reshape India–China economic dynamics.

While both nations continue a cautious reset of ties in 2025, Beijing’s new WTO stance could encourage more pragmatic cooperation in areas such as energy, infrastructure and technology transfer.

At the same time, India will need to carefully manage trade deficits and supply chain dependencies, balancing opportunities for collaboration with the need to safeguard national economic interests.

China’s decision marks a historic moment in global trade reform, but for India, it is a call to action. By leveraging this shift, New Delhi could have a chance to strengthen its industrial base, advocate for the world’s most vulnerable economies and reposition itself as a key player in shaping the future of the multilateral trading system.

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