As Chinese Premier Wen Jiabao met Indian businessmen on the first day of his India visit on Wednesday, he promised that pacts worth $16 billion (Rs 72,480 crore) would be signed between the two countries.
Soon after, the Chinese banking fraternity sprung into action and the biggest of them, China Development Bank, signed financial pacts worth billions of dollars, including one with Reliance Power and another with ICICI Bank.
The pact with Reliance Power, part of the Anil Ambani Group, called for a $4.63-billion (Rs 20,974 crore) project financing, while the one with ICICI Bank is for a $400 million (Rs 1,812 crore) facility agreement, according to officials who coordinated their signing.
It also signed a $2-billion (Rs 9,060 crore) pact with Reliance Communications, while Sepco and Shandong have inked another with the diversified Adani group worth $3.63 billion (Rs 16,444 crore) to supply power equipment.
The plethora of such banking deals come on the back of a major policy overture from both sides. The two sides may ink a reciprocity agreement that would allow Chinese banks to set up branches in India. At present, there are no banks from China operating in India. China’s “big four” government-owned commercial banks — Bank of China, China Construction Bank, Industrial and Commercial Bank of China and Agricultural Bank of China — are the ones likely to be allowed to set up branches and start commercial operations.
It was not an all-banking show, though. Other multi-million-dollar pacts include Dofang Electric and Abhijeet Projects for power equipment worth $2.5 billion (Rs 11,325 crore), a similar pact between Shandong and Tamil Nadu Power Co for $800 million (Rs 3,624 crore) worth of equipment and a $330 million (Rs 1,495 crore) deal between China Aluminium and Vedanta for metal import.
The Federation of Indian Chambers of Commerce and Industry has entered into a memorandum of understanding with China Chamber of Commerce on cooperation.