Indian Prime Minister Narendra Modi got down to business on the final day of his trip to China on Saturday, saying his country was open for investment as firms signed deals worth more than $22 billion.
“Let us work together in mutual interest and for progress and prosperity of our great countries,” Modi told executives from 200 Chinese and Indian companies at a business forum in the Chinese commercial hub, Shanghai.
“Now India is ready for business,” he said.
The nationalist leader was on the final day of a three-day trip to his fellow Asian giant, as the two jockey for regional influence and India’s trade deficit with China balloons.
Despite his hardline reputation, Modi has moved to engage with Beijing since his election last year, and he was looking for an economic boost from the visit, seeking to deliver on election promises for foreign investment.
China is India’s biggest trading partner with two-way commerce totalling $71 billion in 2014. But India’s trade deficit with China has soared from just $1 billion in 2001-02 to more than $38 billion last year, Indian figures show.
Indian embassy trade counsellor Namgya Khanpa said the 21 agreements signed at the Shanghai event were “worth over $22 billion”, with another five exchanged earlier.
Many of the contracts were for Chinese banks to finance Indian firms, and also included deals in the telecom, steel, solar energy and film sectors, she said.
They included an agreement for the China Development Bank to fund a power plant for India’s Adani Power, as well as a steel project between Indian conglomerate Welspun and two Chinese firms, according to a list released by Indian officials. No individual deal values were given.
Modi welcomed potential Chinese investment in sectors including housing, renewable energy, high-speed rail, metro, ports and airports.
“We are very keen to develop the sectors where China is strong,” he told the business forum ahead of the signing ceremony. “We need your involvement.”
“I strongly believe that this century belongs to Asia.”
But they have followed significantly different economic paths recently, with China rising to become the world’s second-largest economy while India has lagged behind.
Earlier during Modi’s visit Chinese President Xi Jinping welcomed him in Xian, the capital of his ancestral home province, Shaanxi, in what his host said was an unprecedented gesture.
Both countries are members of the Brazil Russia India China South Africa grouping of major emerging economies, but China has vowed to pour investment into India’s arch-rival Pakistan as it rolls out infrastructure development plans across Asia, much of which bypass India.
Published in The Express Tribune, May 17th, 2015.