Modi Talks Business with Jinping

Unlike his predecessor Manmohan Singh, Prime Minister Narendra Modi is not an economist. But, when it comes to business, Modi is leaps ahead of the economist-turned-prime minister Singh, and never likes to miss an opportunity to have business tie-ups with India”s neighbouring countries.
Apart from giving a grand welcome to the Chinese president Xi Jinping by taking him to Mahatma Gandhi”s Sabarmati Ashram, a new chapter has been opened in India-China economic ties, with Beijing assuring greater access for Indian goods and capital, while also committing an investment of $20-billion over the next five years. Prime Minister (PM) Modi ensured to bring as many sectors as possible under the India-China cooperation for development and growth. Ensuring not to let the border dispute between the two countries become an impediment in business, Modi kept the Chinese premier in good humour right from Ahmedabad to Delhi, and gave an indication for a “win-win trade cooperation”.
Describing China as India”s biggest neighbour and that it had a role in nation-building and foreign policy, Modi said he attached “importance and priority to relations with China”. This statement of the PM sums up his intentions to build bridges with other nations through trade, and is reminiscent of what he often said during his election rallies that “development is important”.
On Day 1 of Jinping”s three-day visit, India and China signed three state-to-state agreements in Gujarat. These are Guangzhou-capital of China”s Guandong Province and Ahmedabad to be declared sister cities; setting up of an industrial park in the state; and pact between Gujarat and Guangdong to develop cultural and social ties.
In Delhi, Indian and Chinese firms signed $3.4billion worth of 24 contracts for supply of equipment and services. On September 18, China committed $20 billion investment over the next five years and agreed to provide greater market access to Indian products in farm, pharmaceuticals, handicrafts, textile, oil meals, basmati and non-basmati rice, fruit, vegetables, and gems and jewellery sectors, with a view to reducing the large trade gap with India. The deals have been signed in aircraft leasing and financing, telecom, chemicals, wind power components, cotton yarn and fabric, synthetic fibre and seafood sectors.
India-China bilateral merchandise trade stood at $65.88 billion in 2013. While India’s exports to China were valued at $14.50 billion, its imports were much larger at $51.37 billion, resulting in a large trade deficit.
“I raised the issue of trade imbalance between our two countries. I urged President Xi to give our companies better market access and investment opportunities in China,” Narendra Modi said after his talks with the Chinese side at Hyderabad House in New Delhi. The Chinese president assured that he would take concrete steps in this regard.
“China and India will act as twin engines in spearheading economic growth in the region. China will invest $20 billion in India in five years,” the Chinese president said in response. We will also align our strategy to strengthen rail infrastructure in India, the Chinese head of the state added.
The PM said he was pleased with the inking of agreements between the two sides for two Chinese industrial parks in India and Beijing”s investment commitment over the next five years. “I invited Chinese investments in infrastructure and manufacturing sectors. I am glad that two Chinese industrial parks will be built in India. The five-year economic and trade development plan is an important step,” said Modi.

The 12 pacts that were signed between the two sides on September 18 included cooperation in railways, outer space and culture among others. The “Five-year Trade and Economic Development Plan” was signed by Commerce Minister Nirmala Sitharaman and her Chinese counterpart Gao Hucheng in the presence of Narendra Modi and Xi Jinping. The agreement seeks to reduce the bilateral trade imbalance and strengthen investment cooperation among other things.
Sitharaman and Gao also signed the minutes of the tenth session of India-China Joint Group on Economic Relations, Trade, Science and Technology (JEG) held earlier this month in Beijing. As per the minutes, India asked China to relax regulatory norms for Indian banks operating there. China on its part, wanted India to expedite approval allowing Bank of China to establish a branch in Mumbai.
India has also been pressing for export of IT services to China and promotion of tourism between the two countries. With tourism in mind, it was decided to designate 2015 as the “Visit India Year in China” and 2016 as the “Visit China Year in India”.
Railway is another sector that has drawn attention of the Chinese president. The Indian Railways has joined hands with China to increase speed in its existing rail network, modernise stations and enhance mutual cooperation in the sector in the country. Under the MoU signed by the Railway Board chairman Arunendra Kumar and administrator of China”s National Railway Administration Lu Dongfu, both sides have agreed to enhance cooperation in the railway sector in speed-raising on the identified route and studying feasibility of cooperation in bullet train projects among others. It also envisages heavy-haul transportation training of Indian Railway personnel, redevelopment of railway stations and setting up of a railway university in India. Railways have identified Chennai-Bangalore-Mysore section for raising speed to 160 km per hour with the help from China.
India and China have agreed to hold a maritime dialogue this year to exchange views on issues including cooperation between their maritime agencies and freedom of navigation. The proposed discussion on freedom of navigation assumes significance as few years ago China had raised objections over the presence of Indian warships in the South China Sea, where it claims territorial sovereignty and New Delhi has been demanding that there should be no impediment on the movement of its vessels there.
According to official sources, both the countries agreed to hold the first round of maritime cooperation dialogue within this year to exchange views on maritime affairs and security, including anti-piracy. In the anti-piracy operations, India and China have worked together in the Gulf of Aden to tackle the threat of the Somali pirates operating there and started coordinated patrols in the region to curb their activities. India and China hold joint Army drills under the Hand-in-Hand series of exercises and have been discussing the possibility of holding maritime exercises in the near future.
According to government sources, Xi Jinping”s three-day visit may witness an investment commitment close to $100 billion.
Modi said mutual trust and respect for each other”s sensitivities and concerns, and peace and stability in our relations and along our borders are essential. “If there is peace and stability, friendship and cooperation on the border, we can utilise the possibilities and contribute in each other”s growth, and give a new direction to the world economy,” the PM added. India”s Foreign Minister, Sushma Swaraj, made it clear China must respect India”s territorial claim over Arunachal Pradesh. – Debobrat Ghose, The writer is a Delhi-based journalist who reports on national & international issues