Chinese firms to help India better its trade balance

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As many as 40 Memoranda of Understanding (MoUs) were signed on Saturday in Delhi between top state-owned and private Chinese enterprises and Indian corporate houses to source a range of products worth over $ 390 million from India such as polyethylene, polypropylene, marine products, aluminum, manganese, cotton, chrome and castor oil – a move according to Chinese sources would help India to improve its trade imbalance with China.

Among the major Indian companies which exchanged MoU documents with Chinese corporations were Reliance Industries Ltd, Sterlite Industries Ltd., Ranbaxy, Adari Wimar Ltd., Balco, Bharat Mining Company and TT Ltd.

The MoU were signed in the presence of the visiting Chinese vice minister of commerce, Gao Hucheng, and the joint secretary in the Indian commerce ministry, Dinesh Sharma at a business meeting organized by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Hucheng said that the Chinese response came in the wake of the Prime Minister, Manmohan Singh's visit to China last year where he had expressed the hope that the Chinese Government would take positive steps to redress the trade imbalance of $16 billon against India by sourcing Indian products for the Chinese market.

China, he said, was a huge market and invited Indian investors and entrepreneurs to visit China and determine the Indian products that would appeal to the Chinese people.

The FICCI general secretary, Amit Mitra proposed that in order to balance the trade between the two countries and build sustainable trade relations, the two Governments could look at five or six items which were being competitively produced by India and being exported to the US, Europe and Japan. These identified thrust items would be acceptable in the Chinese market because of the competitive price and India would get easy access to the Chinese market.

The joint secretary in the Indian commerce ministry, Dinesh Sharma pointed out that China was India's largest trading partner and currently India's exports consisted mainly of raw materials and low value products. Of the $37.8 billion total bilateral trade` volume in 2007-08, India's exports were valued at $11 billion and imports from China at $27 billion. As high as 50% of the value of exports were accounted for by iron ore. The bilateral trade marked an increase of 47% over that in 2006-07