Chinese firm increasingly keen on setting up operations in India: experts

Between FY 2001 and FY 2012, FDI equity inflow from China was $126 mn; It rose to $152 mn in FY 2013 and to $495 mn in FY 2015

India will become more important for China as a market and as an investment destination in the near future, according to experts in India-China trade.

As per industry estimates, the foreign direct investment (FDI) from China to India during the first nine months of 2015-16 was reported at $426 million.

Speaking about the India-China trade relations at a seminar organised by the Confederation of Indian Industry (CII), Sridhar Venkiteswaran, member, CII core group on China, and executive director, Avalon Consulting, said there was an increase in enquiries from Chinese companies wishing to set up their operations in India.

Besides, India would become an even more important export market for China, given the relative growth rates and against the growth rates of other trading partners, including the United Kingdom, United States, South Korea and Japan, he added.

Chinese imports to India are expected to cross $80 billion by 2018-19, according to a report by CII and Avalon Consulting. Further, the report claims that India would become one of China’s top four trading partners by 2018, the report said.

As per the report, the pace of growth of the trade deficit was expected to slow down and the emphasis would shift to value addition in India. India’s trade deficit with China ballooned to $50 billion in 2015, driven by electronics and mobile phones.

In the recent years, India has made significant changes to the tax structure of electronic products, which has enabled assembly in India and this process is expected to accelerate. Increasingly, China is losing competitiveness to India in several industries such as light engineering etc.

Chinese companies had started increasingly investing or looking at investments in India, the report said. For example, between 2001 and 2012, FDI flow from China to India was $126 million, which jumped to $152 million in 2012-13 and to $495 million in 2014-15. Sectors like pharmaceuticals, tourism, information technology services and automobile components had potential for exports to China, added the report.