SIGN MOU TO STRENGTHEN

to strengthen trade & com­mer­cial re­la­tions

Cargo Talk - - Front Page -

Re­cently, Fed­er­a­tion of In­dian Cham­bers of Com­merce and In­dus­try (FICCI) and its Chi­nese coun­ter­part China Cham­ber of Im­port & Ex­port of Ma­chin­ery & Elec­tronic Prod­ucts (CCCME) have signed an MoU to en­hance bi­lat­eral trade be­tween the two coun­tries. In view of the present shift of global eco­nomic power cen­tre to­wards Asia Pa­cific re­gion, the agree­ment will have great sig­nif­i­cance. CT Bureau

THE TRADE DEFICIT FROM JAN­UARY TO DE­CEM­BER OF 2011, HOW­EVER, PILED UP TO $27.07 BIL­LION, EVEN THOUGH IN­DIAN EX­PORTS TO CHINA WENT UP TO $23.4 BIL­LION REG­IS­TER­ING A GROWTH OF AL­MOST 12.26 PER CENT COM­PARED TO THE SAME PE­RIOD IN 2010

In­dia and China have set a bi­lat­eral trade tar­get of $100 bil­lion by 2015, com­pared to last year's record fig­ure of $74 bil­lion. Bi­lat­eral eco­nomic and trade co­op­er­a­tion has wit­nessed a ro­bust growth rate.

In­dia and China of­fi­cially re­sumed trade in 1978. In 1984, the two sides signed the Most Favoured Na­tion (MFN) agree­ment. In­di­aChina bi­lat­eral trade which was as low as US$ 2.92 bil­lion in 2000 reached US$ 61.7 bil­lion in 2010, mak­ing China In­dia's largest goods trad­ing part­ner. In 2008, bi­lat­eral trade stood at US$ 51.8 bil­lion and China be­came In­dia's largest goods trad­ing part­ner, re­plac­ing the United States of Amer­ica. By the end of 2009, as a re­sult of the world eco­nomic down­turn, bi­lat­eral trade dropped to US$ 43.27 bil­lion (a de­cline of 16.54 per cent).

How­ever, in 2010, bi­lat­eral trade reached US$ 61.74 bil­lion, a growth of 43 per cent com­pared to the same pe­riod in 2009. In­dia ex­ported goods worth US$ 20.86 bil­lion (+52 per cent) to China and im­ported goods worth US$ 40.88 bil­lion (+38 per cent) from China, re­sult­ing in an ad­verse bal­ance of trade of US$ 20 bil­lion. Over all, In­dia-China bi­lat­eral trade rose by $12.2 bil­lion in 2011 com­pared to 2010, when the to­tal trade was $61.7 bil­lion.

The trade deficit from Jan­uary to De­cem­ber of 2011, how­ever, piled up to $27.07 bil­lion, even though In­dian ex­ports to China went up to $23.4 bil­lion reg­is­ter­ing a growth of al­most 12.26 per cent com­pared to the same pe­riod in 2010.

In­dian ex­ports to China, mainly com­posed of pri­mary prod­ucts and com­mod­ity, in­creased de­spite the de­cline of iron ore ex­ports, which dom­i­nated In­dia's ex­ports for long due to ban on min­ing in Kar­nataka and Goa, ac­cord­ing to of­fi­cial sources.

HIGH­LIGHTS OF INDO-CHINA TRADE In­dia-China trade for Jan-Oct, 2011 stood at US$ 60.58 bil­lion, record­ing an in­crease of al­most 22 per cent In­dia's ex­ports to China for Jan-Oct, 2011 reached US$ 18.89 bil­lion, a growth of more than 11 per cent when com­pared to the same pe­riod in 2010

China's ex­ports to In­dia for Jan-Oct, 2011 reached US$ 41.68 bil­lion, record­ing an in­crease of al­most 27 per cent com­pared to Jan-Oct, 2010

The trade deficit for In­dia for Jan-Oct, 2011 stood at US$ 22.79 bil­lion Iron ores, cot­ton and yarn, fab­ric, cop­per, pre­cious stones, or­ganic chem­i­cals, plas­tic, salt, sul­fur, earth & stone, ma­chin­ery, re­ac­tors, boil­ers con­tin­ued to dom­i­nate the

WHILE THE IN­DIAN TRAD­ING COMMUNITY IS PRI­MAR­ILY CON­FINED TO MA­JOR PORT CITIES SUCH AS GUANGZHOU AND SHEN­ZHEN, THEY ARE ALSO PRESENT IN LARGE NUM­BERS IN PLACES WHERE THE CHI­NESE HAVE SET UP WARE­HOUSES AND WHOLE­SALE MAR­KETS SUCH AS YIWU

IN­DIAN EX­PORT BAS­KET

Among the prod­ucts ex­ported from In­dia to China, iron ores, slag and ash (HS 26) con­sti­tuted a dom­i­nant share of 49 per cent though the ex­port de­clined by 10 per cent y-o-y. The share of cot­ton, yarn and fab­rics in the to­tal ex­ports from In­dia to China stood at 10 per cent for the pe­riod Jan-Oct, 2011 Spec­tac­u­lar rise was seen in the ex­port of cop­per and ar­ti­cles thereof (HS 74), plas­tic (HS 39), food waste (HS 23) and mis­cel­la­neous chem­i­cal prod­ucts (HS 38) record­ing in­crease of 164 per cent, 71 per cent, 64 per cent and 63 per cent y-o-y, re­spec­tively.

IN­DIA-CHINA FI­NAN­CIAL DI­A­LOGUE E

In ac­cor­dance with the MoU on the Launch of the Fi­nan­cial Di­a­logue be­tween In­dia and China, signed dur­ing Chi­nese Prime Min­is­ter Wen Ji­abao's visit to In­dia in April 2005, the two sides have since suc­cess­fully held five Fi­nan­cial Di­a­logues in April 2006, De­cem­ber 2007, Jan­uary 2009, Septem­ber 2010 and Novem­ber 2011, re­spec­tively. The Fifth In­dia-China Fi­nan­cial Di­a­logue was held in New Delhi. Dur­ing the Di­a­logue, both sides ex­changed views on the global macro eco­nomic sit­u­a­tion and pol­icy re­sponses, with spe­cific ref­er­ence to cur­rent risks to the global econ­omy and the role of In­dia and China in the post-cri­sis re­cov­ery phase. Dis­cus­sions also took place on G20 is­sues in­clud­ing re­forms in the In­ter­na­tional Mone­tary Sys­tem and the Frame­work for Strong, Sus­tain­able and Bal­anced Growth. The Sixth In­dia- China Fi­nan­cial Di­a­logue is sched­uled to be held in China in the last quar­ter of 2012.

IN­DIAN COM­PA­NIES IN CHINA With the growth in bi­lat­eral trade be­tween In­dia and China in the last few years, many In­dian com­pa­nies have started set­ting up Chi­nese op­er­a­tions to ser­vice both their In­dian and MNC clien­tele in China. In­dian en­ter­prises oper­at­ing in China ei­ther as rep­re­sen­ta­tive of­fices, Wholly-owned For­eign En­ter­prises or Joint Ven­tures with Chi­nese com­pa­nies are into man­u­fac­tur­ing (phar­ma­ceu­ti­cals, re­frac­to­ries, lam­i­nated tubes, auto-com­po­nents, wind en­ergy, etc.), IT and IT- en­abled ser­vices (in­clud­ing IT ed­u­ca­tion, soft­ware so­lu­tions, and spe­cific soft­ware prod­ucts), trad­ing, bank­ing and al­lied ac­tiv­i­ties.

While the In­dian trad­ing community is pri­mar­ily con­fined to ma­jor port cities such as Guangzhou and Shen­zhen, they are also present in large num­bers in places where the Chi­nese have set up ware­houses and whole­sale mar­kets such as Yiwu. Most of the In­dian com­pa­nies have a pres­ence in Shang­hai, which is Chi­naÊs fi­nan­cial cen­tre; while a few In­dian com­pa­nies have set up of­fices in the cap­i­tal city of Bei­jing.

Many In­dian banks have also es­tab­lished their pres­ence in main­land China in the last few years. Four In­dian banks, namely, State Bank of In­dia ( Shang­hai), Ca­nara Bank (Shang­hai), Bank of Bar­oda (Guangzhou) and Bank of In­dia (Shen­zhen) have branch of­fices in China. At present, State Bank of In­dia is the only In­dian bank to have au­tho­ri­sa­tion to con­duct lo­cal cur­rency (RMB) busi­ness at its branch in Shang­hai.

Var­i­ous Gov­ern­ment in­sti­tu­tions and agen­cies from the two coun­tries have also been in­ter­act­ing with each other for fur­ther­ing co­op­er­a­tion in the ar­eas such as tax­a­tion, hu­man re­source de­vel­op­ment and em­ploy­ment, health, ur­ban de­vel­op­ment and tourism. There is a close ex­change and in­ter­ac­tion be­tween the eco­nomic think-tanks and schol­ars as well.

IN­DIAN COMMUNITY IN CHINA

The pres­ence of In­dian community in China is in­creas­ing. Present es­ti­mates put the community's strength in Main­land China at around 48,000, with 7,700 in and around Shang­hai and 25,000 in South­ern China (Guangzhou, Shen­zhen and sur­round­ing ar­eas), and the re­main­ing in Bei­jing and other ar­eas.

A ma­jor com­po­nent of the community in Main­land China are students. About 8,000 In­dian students are en­rolled in var­i­ous Chi­nese uni­ver­si­ties, par­tic­u­larly in Chi­nese med­i­cal uni­ver­si­ties. Easy ad­mis­sion sys­tem, af­ford­able fees and good stan­dard of fa­cil­i­ties are main at­trac­tions for the In­dian students.

R V Kano­ria, pres­i­dent, FICCI greets Dem­ing Chen, com­merce min­is­ter of China at the sign­ing cer­e­mony of MoU be­tween FICCI and CCCME in pres­ence of Anand Sharma, com­merce, in­dus­try and tex­tiles min­is­ter, In­dia

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