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 percent 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."
(China Daily April 18, 2005)