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Chinese firms in India must localise

business Updated: Oct 15, 2010 01:56 IST
Reshma Patil
Reshma Patil
Hindustan Times
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If Chinese companies wish to grow in India, they must localise and contemplate greater commitment and creativity, said India’s ambassador to China.

“The experience of the more successful Chinese companies points to their emphasis on localisation. As sourcing from China increases, so too will market demands for greater localisation,” said S. Jaishankar, Indian ambassador.

The remarks were a part of the pitch to invite Chinese industry to invest in Indian infrastructure building on a potentially larger scale than Chinese investment in telecom and power. Road and transport minister Kamal Nath was in Beijing last month to invite Chinese companies for road projects even in Kashmir.

At every business event in China this year, India clarified that its visa policy discourages Chinese firms from flooding Indian projects with workers. “Chinese companies are still developing an approach for the Indian market,’’ said Jaishankar. “Applying a global template, they expect to send out large numbers of personnel including in the semi-skilled category without giving adequate thought to how they would be received. When these approaches are challenged because of their unsuitability, they do not always appreciate the need to change their way of working.”

Bilateral trade may hit $60 billion this year, up from under $3 billion 10 years ago. Indian companies are sourcing Chinese equipment for power, telecom, steel, railways, mining and construction. Electrical machinery exports accounted for 30 per cent of Chinese exports this year, and machinery 26 per cent.

Chinese ‘project exports’ to India are expected to take advantage of the 2007-12 plan targets that include adding 80,000 MW generation capacity and 20 km of new roads per day. “India’s infrastructure demands could take economic cooperation with China to a completely new level,’’ said Jaishankar, listing opportunities in steel, metro projects, railway modernisation and ports.

The Indian business community is finding it difficult to make inroads in China, he said.