PM Modi stresses economic relation with China, as he had done as Guj CM

Prime Minister

spoke to each of the seven nations of the South Asian Association for Regional Cooperation (SAARC) after assuming the office and just three days after taking oath, he had a telephonic conversation with his Chinese counterpart Li Keqiang.

It was also reported on Thursday that Chinese Foreign Minister Wang Yi is set to visit India on June 8 to meet the Indian prime minister. He would also meet Minister of External Affairs Sushma Swaraj during his visit.

Reports said the decision on Yi's visit to India was taken on Wednesday and subsequently Keqiang called up Modi to congratulate him and stressed a stronger relation between the two neighbours. Modi told Keqiang that besides the strategic issues, he wants a better economic relation between the the two countries.

Modi might not deviate much from the policy of maintaining peaceful relation with other countries but the significance of Modi's approach is that he is putting more stress on the economic aspects.

The economic relation between India and China doesn't have hurdles like those between India and Pakistan but yet India has lagged much behind in its economic dealings with the Chinese. Compared to the entry of Chinese goods in the Indian market, India has succeeded little in penetrating the Chinese markets (in the 2013-14 fiscal, China has exported goods worth over Rs 5,400 crore to India while India has exported goods worth only Rs 1,350 crore).

The scenario hasn't improved despite repeated joint statements issued by the leaders of the two countries and reports have also suggested that China deliberately avoided buying goods from India. It has left the Indian establishment deeply worried. Even during the campaigning of the recently concluded Lok Sabha election, top leaders in India were seen stressing the 'Made in China' factor and sought a bigger market for India's domestic products.

The new prime minister has the experience of engaging with China as the chief minister of Gujarat and he is eyeing to bring a balance in India's economic relation with China from the very beginning. Much of China's investment in India (USD 900 million) is made in Gujarat.

Modi's experience as the chief administrator of an economically developed state of India and his personal rapport with the Chinese authorities are expected top give a boost to the bilateral relation between the two states. The two sides are also eyeing for more frequent meetings to improve the relation further.

The Indian leadership is also considering to engage with China on issues liike border disputes in Arunachal Pradesh and Line of Actual Control and Bejing's strategic assertion in South China Sea. The new NDA government will need to maintain a crucial balance between a firm and soft stand vis-a-vis China to ensure that the bilateral relation between the two biggest countries in Asia proceed in the right direction.