Modi to meet Xi Jinping first in Gujarat, then in Delhi

Chinese businessmen are likely to sign contracts worth $700 mn with their Indian counterparts

In a first, Prime Minister Narendra Modi and Chinese President Xi Jinping will hold two meetings during the latter's visit here next week. Modi will meet Xi first in Gujarat on September 17, as Ahmedabad is the first port of call for the Chinese President. This will be followed by a full-fledged bilateral meeting in New Delhi on September 18.

"On the agenda is business and only business, while issues such as border management, defence and strategic cooperation are expected to take a backseat," a senior diplomat involved with the visit told Business Standard.

Xi will be accompanied by a huge, high-powered business delegation of 50 members, who will all land first in Gujarat.

ON AGENDA

• POWER: Pact on maintenance, repair and overhaul of power equipment imported from China
   
• INDUSTRIAL PARKS: Investments of $5 billion each in proposed Ahmedabad and Pune parks
   
• RAILWAYS: Expediting railway network and overhauling of signaling system; creation of model stations and platforms; announcements on bullet trains
   
• TRADE: Trade deficit to be addressed by increasing investments from China

A separate buyers' mission will arrive in Delhi separately on September 17, representing sectors ranging from textiles to pharmaceuticals. This mission is expected to sign contracts worth $700 million with their Indian counterparts.

However, in a major deviation from the usual practice, Xi will not be addressing a joint business forum representing Indian industry under Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry and the Associated Chambers of Commerce and Industry of India.

"This visit will bring a directional change to the relations between India and China in the past 60 years. The directional change will also help further strengthen the ties between the two nations," said Commerce and Industry Minister Nirmala Sitharaman.

This will be Xi's first visit to India after he became China's President under the new set up. Modi and Xi have already met in Brazil during the BRICS (Brazil, Russia, India, China and South Africa) summit held in July.

During Xi's visit, an agreement on maintenance, repair and overhaul of power equipment imported by India from China is expected to be signed. Both sides might also announce the establishment of Power Equipment Service Centres (PESCs).

This comes in the wake of strong complaints from the power industry about poor servicing and difficulties in accessing spare parts and components for equipment imported from China.

A memorandum of understanding (MoU) on the issue was signed last year during former prime minister Manmohan Singh's visit to Beijing. The MoU was signed between the power ministry and China's National Energy Administration.

During the visit, investments into the industrial parks to the tune of $10 billion are likely to be announced. This will be announced initially for two industrial parks of $5 billion each in Ahmedabad and Pune, where the first two industrial parks will come up.

According to sources, initially, Chinese electronic makers, power equipment manufacturers and consumer durable product producers would set up shop in these industrial parks. These parks might also house the PESCs.

According to the MoU on industrial parks, which was signed during the visit of vice-president Hamid Ansari and Sitharaman in Beijing, the industrial parks will be granted tax concessions and fiscal benefits similar to that of special economic zones (SEZ).

"These industrial parks will not only address the issue of trade deficit by way of increased investments, it will also lead to job generation," said Sitharaman.

India and China are also expected to reach an agreement on speeding up the existing railway network and overhauling of the signaling system. Besides, there could be discussion on the creation of model railway stations and railway platforms in second-tier and third-tier cities, keeping in mind Modi's mantra that India resides in the states.