As the world's second largest economy suffers a deepening slowdown, neighboring rival India could be a major benefactor from China's lackluster performance, say economists.
"India will be less exposed to the trend of a China slowdown, due to limited trade linkage with China, and will likely gain from lower commodity prices and improvement in terms of trade," Chetan Ahya, India & South East Asia economist at Morgan Stanley wrote in a report published on Wednesday.
China accounted for 53 percent to 111 percent of the total increase in global demand for various commodities in 2012, according to Morgan Stanley. Hence a decline in demand should put some downward pressure on prices, the bank said, a positive for net commodity importer India.
Commodities account for a large portion of India's current account deficit, with the country importing close to 80 percent of its overall crude oil requirements, for example.
The impact of a slowdown in China is expected to be more pronounced on industrial commodities including aluminum, steel, iron ore, copper, and coal, as the economy accounts for a much higher proportion of global demand for these resources.
Citi economist Rohini Malkani shared a similar view, writing in a note on Thursday, "China pains could be India gains. The China slowdown fear does play out well for India [given] its commodity user status."
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A slew of disappointing economic data out of the mainland in the recent weeks has heightened concerns over the outlook for the economy.
China is due to release its second quarter gross domestic product (GDP) data on July 15, which is expected to show growth decelerating to its lowest level in over two decades to 7.5 percent from 7.7 percent in the previous three months.
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On the trade front, linkages between India and China remain relatively low, said economists. The South Asian nation's exports to China, including Hong Kong, account for 8 percent of overall shipments, according to data from the bank.
The biggest losers from the slowdown in China's growth, as the economy rebalances from an export and investment-led one to a consumption-driven economy, are major commodity producing emerging markets.
"China's slowdown will impact on different commodity groups in different ways. Metals producers are likely to suffer most since China's investment boom has been the key driver of stronger demand for copper, iron ore and steel over the past decade. But this is now cooling and is likely to weaken further," economists at Capital Economics wrote. The research firm sees growth in the mainland slowing to 7 percent in 2014 and 6.5 percent in 2015.
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"We are most concerned about large exporters of metals that have run external deficits in recent years. South Africa, Zambia, Chile and Peru look especially vulnerable," they said.
—By CNBC's Ansuya Harjani