“A green light has been switched on,” is how one businessman described the interest shown by Chinese businessmen in investing in India following Prime Minister Narendra Modi’s visit and meeting with top CEOs, including Jack Ma of Alibaba and Lin Min of Xiaomi, in Shanghai on Saturday.
At the meeting, followed by a conference of Indian and Chinese CEOs, 21 agreements or MoUs estimated at a total of $22 billion were signed. Funding from Chinese banks ICBC and China Development Bank for Airtel, Adani Power Company and Jindal Steel and Power accounted for the major part of the agreement total, as did tie-ups for renewable energy companies. The Adani Group, in particular, bagged several MoUs for its Mundra port, including a “sister-port” agreement with the Guangzhou Port Authority.
“I want to tell you to make in India,” Mr. Modi said in his opening lines to the businessmen, adding that as China is the world’s manufacturing base and India runs the “back-offices,” it would be best if the two collaborate on digital commerce. “We are very excited about India, ‘Make in India’ and ‘Digital India,’” said Mr. Ma, the owner of the world’s biggest online commerce company which processed transactions of $248 billion last year. Mr. Ma made two visits to India recently and is finalising plans to set up operations there.
Challenge will be to get China to ‘Make in India’
With China and India agreeing to narrow the trade deficit at a meeting between Prime Minister Narendra Modi and Chinese Premier Li Keqiang, the greater challenge will be to convince Chinese businesses to manufacture in India and set up factories there.
The two countries share bilateral trade of $70 billion, making China India’s biggest trading partner, but the figure is worryingly skewed, with an estimated $40 billion in favour of China.
Officials said more business will follow if Chinese companies take back positive feedback of their experience in India. “Change will not happen overnight. For projects and investors to come in, they need time to study what the Indian market can do for them. I see a heightened level of interest now, so we are confident,” Amitabh Kant, Secretary, Department of Industrial Policy and Promotion, told The Hindu.
‘Perceptible shift’
Shiv Khemka, vice-chairman of the Sun Group, said there was a perceptible shift in the political atmosphere in Beijing. “Until there was a political green light from China, all these businessmen were hesitant to come and invest in our country. This is a watershed moment, because I get a sense the green light has been switched on. All the Chinese business people I speak to are looking at India with a lot of focus: infrastructure, metallurgy, energy in particular,” he said. The Sun Group has tied up with a Chinese solar company to set up a 5,000-MW project in five years.
> In China, going beyond optics
In redefining India's geopolitical relationship, Modi would have to take a call on balance of power in Asia-Pacific
>Modi, Xi get down to tackling tough issues
Boundary row, trade balance dominate talks, writes Suhasini Haidar.
Takeaways from China
- 1 For enhanced border defence cooperation, a "hotline" to work between the Military Headquarters >Read more
- 2 ISRO and China space agency to sign Space Cooperation Outline for Deep Space Exploration >Read more
- 3 Sisterhood between Karnataka & Sichuan; Aurangabad & Dunhuang, Chennai & Chongqing, Hyderabad & Qingdao >Read more
- 4 Extend electronic tourist visas to Chinese nationals. India will celebrate the "Year of China" next year >Read more
- 5 Agreement on climate change later this year, will address mitigation, adaptation, finance, technology development and transfer >Read more
- 6 China will open a new Consulate General in Chennai, India will open one in Chengdu >Read more
- 7 Tackle growing trade deficit by expanding economic relations in Infrastructure, IT, Pharma, Agriculture and Manufacturing >Read more
>To China with a clear strategy
India cannot overlook excess of nationalism, belief in exceptionalism in today's China
>A long march to a new relationship
India-China relationship today is marked by low levels of mutual trust, writes Nirupama Rao.
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