Xi visit to set a new mark in India-China ties

Ahead of Chinese President Xi Jinping’s visit to India, starting Wednesday, Prime Minister Narendra Modi summarised the possibilities of bilateral ties between the two countries in inches and miles — that is, “Inch (India and China) towards Miles (Millennium of Exceptional Synergy).”

“Every inch we cover can rewrite history of humanity and every mile we cross will go a long way in making this planet a better place,” he said.

Coming on the heels of Modi’s successful trip to Japan, Xi is bearing for Modi a $100-billion gift pack covering investments in a gamut of areas, including bullet trains, industrial parks, twin-city projects, and highway construction — to outdo the Japanese investment offer of $35 billion.

Bridging the trade gap China agreeing to import buffalo meat, oilmeal, and tobacco has raised India’s hopes of narrowing its trade deficit of $36 billion with China – which is about one-fourth of its total trade gap. The Government is expecting more market access and increased investments as Beijing’s bid to bridge the deficit gap.

According to Bloomberg, China’s total investment in India between 2000 and 2014 has been around $400 million; the annual figure has been declining – from $88 million in 2008 to $27 million in 2013. By comparison, China invested $14 billion in the US that same year.

One reason for the trade gap with India is that much of China’s exports to India are manufactured goods while most of India’s exports to China are primary goods such as iron ore and minerals. The Commerce Ministry believes that India can export buffalo meat worth $1 billion annually to begin with, and this can be increased subsequently.

“China has a huge demand for meat and we are the world’s largest suppliers. We have convinced them that our quality standards are high and meet the stringent requirements of the developed world as well,” a Government official told BusinessLine .

China was earlier importing oilmeal and tobacco from India but had stopped some years back citing some quality problems. The matter has been sorted out now.

Breaking the usual protocol, Xi will land not in New Delhi but in Ahmedabad, and sign an industrial park MoU. Gujarat will also initial a couple of other pacts with the Chinese provinces of Guangdong and Guangzhou.

But more than the basket of goodies, New Delhi will be anxious for clarity on a host of other issues that have kept relations prickly.

Chiefly, these include the unending border dispute and regular incursions into Indian territory by the People’s Liberation Army, especially in Arunachal Pradesh, the river water disputes, the stapled visa issue, and China’s expanding influence in the Indian Ocean.

For the two leaders, finding an amicable solution to these issues will be the key to stronger economic and strategic ties.