India, China trade to reach $30 bln by 2009

 
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New Delhi, Nov 12 (UNI) The bilateral trade between India and China will reach upto 30 billion dollars by 2009 from its current level of 17.6 billion dollars, industry chamber FICCI has said.

''If both countries make vigorous efforts in the 'China-India Friendship Year-2006', trade can go upto 30 billion dollars to diversify the export products from India and new products are identified for trade,'' the FICCI paper said here.

The analysis on deepening the economic engagement between India and China, noted that while India's exports to China are largely restricted to primary and resource based products, Chinese exports to India are fairly diversified and include resource based products, manufactured items as well as low and medium technology products.

The paper revealed that the key items of India's exports to China in 2004-05 included ores, slag and ash, iron and steel, plastics and articles thereof, organic and inorganic chemicals.

Further, India's exports to China are highly concentrated as in 2004-05, top three export items accounted for 71 per cent of total exports, top five export items accounted for 81.4 per cent of total exports and top 10 export items accounted for 90.4 per cent of total exports.

In fact, in the top 10 export items, ores, slag and ash alone accounted for 52.1 per cent of the total exports.

On the other hand, India's imports from China present a balanced picture with both resources based and manufactured products listed in the top 10 imports.

The key items of India's imports from China in 2004-05 included electrical machinery and equipment, nuclear reactors, mineral fuels and products, organic chemicals and silk.

A key feature of the trade pattern is that India's imports from China are less concentrated as compared to India's exports as in 2004-05 such as top three import items accounted for 52.4 per cent of total imports, top five import items accounted for 68.4 per cent of total imports and top 10 import items accounted for 77.5 per cent of total imports.

FICCI has identified 14 items as focus products for enhancing and diversifying India's exports to china, including automobiles, electronic components, and pharmaceuticals.

With China's entry into the WTO, immense opportunities have also opened for setting up joint ventures and business collaborations between Indian and Chinese Industry, it said.

While total Chinese investment inflows into India during the period August 1991 to July 2006 amounted to about 3.5 million dollars, total Indian approved investment in China during the period April 1996 to February 2006 is estimated to be about 161.4 million dollars.

The key sectors where Chinese companies have invested in the Indian market include telecommunications, metallurgical industries, commercial, office and household equipments, transportation industry and electrical equipment.

The presence of Indian companies in China has also increased substantially, especially in sectors such as iron and steel, textiles, chemicals, automobile components, and pharmaceuticals.

Indian companies in China are active in Services Sector like restaurants, entertainment, culture and banking.

Indian companies are also looking at projects in China in the areas like gas turbine and steel. Project exports are an important area, particularly as China receives a large amount of multi-lateral loans and Indian companies can participate in projects enjoying multilateral funding.

To give a fillip to bilateral trade, FICCI has operationalised its hyperlink with China Council for Promotion of International Trade (CCPIT).

Besides the Joint Business Council (JBC) agreement between FICCI and CCPIT, FICCI has signed 10 MoUs with various organisations in China to strengthen networks for doing business, thus giving a fillip to the two-way trade.

UNI SBA SRS DKS HT1210

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