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BIZCHINA / Top Biz News

China may top US as India's lead trade partner
By Li Jing (China Daily)
Updated: 2006-04-18 08:49

China will likely emerge as India's largest trading partner, overtaking the United States within a few years, with the two-way trade hitting US$100 billion in the near future, predicts a senior Indian businessman.

Saroj Kumar Poddar, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), said yesterday in Beijing that "tremendous potentials" exist in regards to bilateral trade between the world's two fastest-growing economies.

The trade between China and India last year hit a record of US$18.7 billion, jumping 38 per cent year-on-year.

If the growth is sustained, the bilateral trade could soon overtake Indo-US trade, which is hovering around US$30 billion, said Poddar, who is leading a FICCI CEO delegation in China this week.

But Poddar said in order to carry on the robust growth, it is crucial to diversify the Indian export basket from primary products to manufactured items and processed products.

India's exports to China now are largely restricted to primary and resource-based products, such as iron ore exports, which constitute more than half of India's total exports to China.

"One of my tasks this time in China is trying to find ways to diversify the export basket, especially increasing the proportion of high value-added products," Poddar told China Daily.

This week's visit by the FICCI delegation, which is composed of a dozen representatives from modern Indian industries, is regarded as a crucial step for the sustainable long-term growth of Sino-Indian trade.

Poddar said the delegation members come from a wide range of industries, including fertilizer, energy, food processing, petrochemicals, textile and tobacco sectors.

"We have diversified interests and are looking for opportunities in different fields," Poddar said, adding that the delegation would visit Xi'an, capital of Northwest China's Shaanxi Province, and Shanghai this week, exchanging views with local businesspeople on the Chinese economy.

Poddar said India and China, dubbed the "double engines" of economic development in Asia, would further benefit if they had a closer relationship with each other.

"The two countries have many complementary aspects and we can learn from each other," Poddar said. "China's development depends highly on foreign trade and investment, while India mainly lies on the growth of domestic enterprises. Each of us can draw experience from the other."

Poddar called it "very natural" for the two populous countries to be rivals in the world's economic arena.

"Even Indian companies themselves are competing one another. Competition makes us have the best Chinese enterprises and the best Indian enterprises."

When talking about the feasibility of reaching a free trade agreement (FTA) between India and China, Poddar said it would happen in the future, but it is still premature for now.

"We need to understand each other better before such an agreement is reached," Poddar said. "It takes time."


(For more biz stories, please visit Industry Updates)

 
 

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