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.
China supports India's full membership in Shanghai Cooperation Organization: Xi Jinping
China will set up one industrial park in Gujarat and another in Maharashtra : Xi Jinping,Chinese Prez. While one industrial park for power equipment will be in Gujarat, another for automotive parts will come up in Maharashtra
China will help India train 1,500 Chinese-language teachers. China and India will each send 200 youths to visit the other each year.
The Chinese media also highlighted the India-China agreement to strengthen culture and personnel exchanges during Xi's current visit to India.
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
Seeking a Dynamic Relation with Vietnam
Narendra Modi's foreign policy is currently focused on improving relations with South Asian Association for Regional Cooperation (SAARC) countries and other Asian countries. Instead of Modi’s visit, Sushma Swaraj has also made official visits to Bangladesh, Nepal, Myanmar, Singapore, and Vietnam.
Seeking a more dynamic relationship with strategically important Vietnam, Minister Sushma Swaraj went to Vietnam on August 24 for talks with the country's top leadership during which cooperation in defence, agriculture, pharmaceuticals and textiles would be in focus.
The essential three-day visit comes just days after Vietnam renewed India's lease of two oil blocks in South China Sea for another year, a move that could rile China. India and Vietnam have a tradition of exchanging high- level visits. The last high level visit from Vietnam was by the Secretary General of Vietnamese Communist Party Nguyen Phu Trong in November, 2013. Both the countries also have fairly robust economic ties and the bilateral trade stands at $8 billion, of which Indian exports to the country is about $5.4 billion. The visit also sees the prospects in the current situation in terms of enhancing ties including in areas such as textile, pharmaceuticals and agricultural products.
According to Indian diplomats, Indian oil companies have felt, for techno-commercial reasons, that they would like to avail the opportunity to explore those oil blocks for a further period of one year. Earlier the companies had found that it would be difficult to utilise those because of lack of availability of deep sea rigs. India has decided to ramp up its engagement with Vietnam in the oil sector and deepen defence ties.
For the first time, India and Vietnam will have direct daily flights from November 5 with Jet Airways connecting Delhi and Mumbai to historic Ho Chi Minh City of Vietnam. A memorandum of understanding (MoU) for connecting the two countries by air was inked between President Pranab Mukherjee and his Vietnamese counterpart Truong Tan Sang on Mukherjee’s four day visit to Vietnam. Apart from this pact, six other MoUs were signed between the two nations.
Both the countries also declared their commitment for free movement in the waters of South China Sea. The reference to free movement in South China Sea waters came ahead of President Xi Jinping’s visit to India. India extended an invite for Vietnamese Prime Minister Nguygen Tan Dung and he is expected in New Delhi sometime next month.