Indochina trade relations

Bilateral trade relations between India and China

Indian sub-continent
India, also known as the Indian subcontinent owes its trading facilities to its strategic location. Its social impacts have crossed its borders from time immemorial and arrived at faraway grounds. It goes about as a bridge head between improved and advancing nations of the world and between the East and the West. India's quality lies in its geology to the extent that in its society. Since the opening of the Suez Canal in 1869, separation between India and Europe has been diminished by 7000 kilometres. India appreciates a favourable sea ways from East and South-East Asia and Australia to Africa and Europe pass through Indian Ocean. In 2008, India's share of world trade was 1.68%. In 2011, India was the world's tenth largest importer and the nineteenth largest exporter. Major exports include petroleum products, textile goods, jewellery, software, engineering goods, chemicals, and leather manufactures. Major imports include crude oil, machinery, gems, fertiliser, and chemicals.

Indochina trade relations

China does not only share boundaries with India but has a similar history to that of Indias and are also major civilisations. Regardless of a history filled with conflicts and a contemporary competition over regional influence have the two Asian powers managed to increasingly deepen their economic ties. China and India is being referred to as the two Asian powers as they constitute to nearly 1/3 of the world population and demographically two largest countries. This makes Indochina relations a crucial factor not only to the citizens but also to other countries. In 2008, China became the largest trading partner for India. Bilateral trade between India and China exceeded the two countries' $60-billion target in 2010, driven largely by rising Indian imports of Chinese machinery that has left a record trade imbalance of $20 billion in China's favour as Indias import from china is 11% from its overall import.

Indochina trade relations

China exports electrical machinery and equipment, organic chemicals, nuclear reactors, machinery, boilers, mineral fuels, oils and silk. Value added items like machinery, especially electrical machinery, forms about 36% of Chinese exports to India. On the contrary, India exports iron ore, non-ferrous metals, Ferro alloys, other minerals, cotton and its waste, plastics and linoleum, gems and jewellery, machinery and equipment, electronic goods and marine products. There seems to be great potential existing in areas like biotechnology, IT and ITES, health, education, tourism, and the financial sector - all of which would contribute to the services and knowledge based sectors.

Indian companies thriving in China

There are around 119 Indian companies which have their presence in china of which 36 companies are in the engineering sector and 32 are into trading. They are also into other industries like gems and jewellery, shipping and logistics, textiles, pharmaceuticals, iron and steel, IT and BPO, chemical trading companies and consultancies. There are even 10 Indian banks operating in china. Indian MNCs like Reliance industries, Aditya Birla group, Hero Electric, Larsen and Tourbo, Lucas TVS, Mahindra, Sundaram fasteners, TATA group, WIPRO, HCL, Infosys, Sun pharmaceuticals,, Piramal, Raymonds etc have their foot in china.

Chinese companies thriving in India

In December 2006, 32 Chinese firms in India came together to form the Chamber of Chinese Enterprises in India (CCEI) or the Indo Chinese (Chindia) chamber of commerce, which works for Chinese commercial interests in India now has around 132 Chinese companies operating in India. Few MNCs operating in India are Shenzhen CIMC-Tianda Airport Support Ltd, a Shenzhen-based subsidiary of the worlds largest container and trailer manufacturer CIMC, Zhongxing Telecom Equipment (ZTE) is Chinas largest listed telecom manufacturer, Huawei Technologies is a vendor of telecom products and solutions etc. Two Chinese cement companies, Yingde Dragon Mountain Cement Company Ltd. and Longkou Fanlin Cement Company sell cement in the Indian market.

Indochina trade relations

There are joint ventures also between Indian and Chinese companies. In the metals sector, Baosteel, Anshan Iron & Steel, and Benxi Iron & Steel have started to converse with Indian steel organizations about joint ventures and technological participation.

Current scenario of Indian companies in china

Companies such as Sundaram fasteners and Mahindra & Mahindra are struggling to make china feel their presence. Economic Times quotes a Chinese researcher reasoning out the struggle by the Indian companies. She says New entrants need to show their clients reasons to buy their product, which can be based on lower price, superior technology, better quality, etc. Indian companies, have neither the brand pull of American and European companies, nor the immaculate cost management of Chinese companies. This shows us that China is no indifferent to India.

Growth prospects for India with China

India can export high value based products such as organic and inorganic foods, agriculture products like tobacco and grains, consumer durables, textile yarns, medical equipment, fresh and processed fruits etc. These could be done only through positive initiatives and exchange of delegations initiated by both the countries.

Indochina trade relations

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