China is looking to steal a march over rival Japan by pledging investments worth billions of dollars in India's railway, manufacturing and infrastructure projects during President Xi Jinping's visit starting Wednesday as the two Asian neighbours seek to take their ties to a new direction.
A slew of pacts that includes setting up industrial parks — to begin with in Maharastra and Gujarat -- and $50-billion railway modernisation plans figure among 20 documents expected to be signed during Xi’s meeting with Prime Minister Narendra Modi in Ahmedabad.
Japan pledged an investment of $35 billion to India over five years during Modi’s recent visit to Tokyo.
China is also keen on pumping in huge money — another $50 billion in infrastructure, ports and roads -- besides offering “concrete” steps to expand India’s market access and facilitating mutual investments, officials familiar with the plans told HT.
While business is set to steal the show, New Delhi expects Beijing to show sensitivity to India's concerns on border issues, as well in its Indian Ocean strategic intent encapsulated in President Xi’s"Maritime Silk Road" that is intended to revive a trade route running from China through southeast Asia and across the Indian Ocean to Europe.
Over 97 percent of India's international trade by volume and 75% by value passes through the Indian Ocean, where China has set its eyes and is wooing countries like the Maldives and Sri Lanka to its fold.
According to sources, the Chinese have also hinted at giving market access to Indian products. This, along with investment flows, will help narrow the trade deficit pegged at $31 billion in 2013. Though both sides have set a trade target of $100 billion, sources said the two sides agree the potential for trade is much more.