Setting up of Chinese industrial parks in India, increased access to Indian products to bridge the ballooning trade deficit, besides border issues was expected to figure in Prime Minister Narendra Modi’s first meeting with Chinese President Xi Jinping on the sidelines of BRICS Summit.
Officials say that a mix of bilateral economic, trade and strategic issues was expected to figure in the maiden meeting between the two leaders who had the reputation of being strong leaders in their respective countries.
Their meeting likely to be held on July 15 is taking place in the backdrop of signing of MoU to facilitate Chinese industrial parks in India during the visit of Vice-President, Hamid Ansari, here last month.
Commerce Minister Nirmala Sitharaman, who was part of Ansari’s delegation, had held extensive talks with her Chinese counterpart Gao Hucheng.
She said India is expecting China to set up four Chinese industrial parks with substantial investments. Sitharaman is also accompanying Modi during his Brazil trip for BRICS Summit.
Bilateral trade
India looks to China to come up with a big investment commitment to translate its promises to address the ballooning trade deficit, which in the five month of this year climbed to nearly $13 billion.
According to the January-May data released by the Chinese Customs, China’s exports to India amounted to $20.18 billion, while India’s imports to China totalled just $7.992 billion.
According to Indian officials, the annual trade deficit in the last few years is averaging around $35 billion, making bilateral trade unsustainable.
Industrial parks
China, while acknowledging the trade deficit, has promised to step up its investments from the present $1.1 billion, mostly in Gujarat. The Chinese industrial parks, which were in the pipeline for some time, could become a reality as the MoU provides the framework for their functioning.
China reportedly plans to establish one park but it is to be seen whether it would be finalised during Modi-Xi meeting or during the proposed Chinese President’s visit to New Delhi later this year.
The new Indian Government sees the setting up of parks as important initiative to bring in the much needed FDI into the economy.