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India Inc banks on Patil's Shanghai stop

President Pratibha Patil's ongoing China visit, the first by an Indian President in a decade, includes a less publicised stopover than meeting Beijing's top leaders and the opening of the first Indian Buddhist temple in Luoyang.

business Updated: May 28, 2010 00:46 IST
Reshma Patil

President Pratibha Patil's ongoing China visit, the first by an Indian President in a decade, includes a less publicised stopover than meeting Beijing's top leaders and the opening of the first Indian Buddhist temple in Luoyang.

On Monday, Patil will speak at a Shanghai business seminar planned months in advance. The event is expected to boost India's branding blitz in 17 cities from now to October to urge China to unlock the mainland market for Indian technology, pharmaceutical and agricultural products instead of just raw materials like iron ore.

Over the weekend, about 60 Indian business delegates will fly in to pitch for expanding and redefining business with China, India's top trade partner.

An Indian diplomat says there are ‘chances' that the event, attended by 350 Chinese business representatives, will lead to the signing of trade deals.

Just before Patil's arrival, an unusually big delegation of 200 White House officials led by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner left Beijing after calling for a 'level playing field' for American business with China.

For both the US and India, China's second and tenth-largest trade partners, resolving issues of trade deficit and barriers is proving as slow and tricky as resolving strategic issues with Beijing.

Like the US, India is waiting for China to allow the artificially low exchange rate of its currency, the yuan, to rise from its mid-2008 fixed peg against the dollar. The yuan revaluation will make Chinese exports costlier but improve Chinese demand for foreign imports including Indian hi-tech goods.

The revaluation was expected in May or June, but Beijing is now buying time and blaming the euro.

"The Europe crisis has increased China's hesitation. It's very difficult to say when China will announce currency reform, maybe within one to three months," Shi Yinhong, director of the Centre on American Studies at the Renmin University, told the HT.

This week, China's official newspaper the People's Daily said the euro's fall is 'taking a toll'.

"Insiders said dwindling exports to countries like Germany, France and others in Europe will complicate Beijing's move to relaunch currency reform," said the report.

However, troubles in Europe may force Chinese businessmen to pay more attention to doing business with India.