The Hindu Business Line : PM for more ambitious trade targets for India, China

Beijing, Jan. 14 More than 400 members of the Chinese business and government community gathered in the Chinese capital on Monday, in what according to Indian Commerce Minister, Mr Kamal Nath, was the largest ever business congress between India and China.

The summit was held against a backdrop of record highs in bilateral trade and investment. In 2007, Sino-India trade reached $38.6 billion. However, a widening trade deficit for India (currently to the tune of around $10 billion) coupled with the narrow range of products in India’s basket of exports to China, have also left Indian industry somewhat nervous.

The keynote address at the summit was delivered by the Prime Minister, Dr Manmohan Singh. The fact that this was the Prime Minister’s first formal appearance in his three-day China visit only underscored the importance that the bilateral economic engagement has come to occupy in overall ties.

3-pronged strategy

Dr Singh suggested a three-pronged strategy for the businesses community on both sides of the border to enhance the economic relationship including “jointly developing a strategic plan for the future”, evolving “profitable business models that factor in complementarities and competitive strengths” and acquiring “insights into each other’s markets, business customs, and management styles.”

The Prime Minister further urged Indian industry to “vigorously pursue opportunities for expanding non-traditional items of export” in order to address the trade imbalance.

He also said that since all the trade targets set by the Indian and Chinese sides so far had always been met in advance, he wondered whether “the two Governments have been underestimating the capabilities of our respective industries”, and proposed the setting of more ambitious targets going forward.

Earlier on in the meeting representatives of Indian industry raised concerns regarding non-tariff barriers and other technical barriers to trade that they pushed for the Chinese side to lift.

Partnership message

Speaking in his capacity as President of the Confederation of Indian Industry, Mr Sunil Bharti Mittal said that the message India Inc was bringing to China was one of “cooperation, partnership and deeper engagement.” However, he added that a level-playing field between the two countries needed to be created and that it “was the legitimate aspiration of Indian industry to have a stake in China’s economic growth”, equal to that the Chinese were now taking in India’s growth.

In his speech, the Prime Minister also underlined the importance of “creating a level-playing field by addressing issues such as non-tariff barriers, IPR protection, and market-related exchange rates.”

Fast growth track

On the Chinese side, the Assistant Foreign Minister, Mr Chen Jian, highlighted the fact that China’s trade with India was growing at a faster rate than China’s trade with any other major trading partner.

He revealed that the more than $5 billion worth of contracts signed by Chinese companies for implementation of infrastructure projects in India, in the first three quarters of 2007, was also the highest value for contracts signed by China with any other country in this time period.

Mr Chen admitted that the trade surplus with India was of concern to the Chinese side as well and said that Beijing planned on increasing imports from India, including the sending of delegations from China on procurement missions to India.

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