China may overtake US as India's trade partner
The two-way trade between India and China may hit $100 billion in the near future.india Updated: Apr 18, 2006 11:33 IST
China is likely to emerge as India's largest trading partner, overtaking the US, with two-way trade hitting $100 billion in the near future, said the president of a prominent Indian industry lobby group.
Saroj Kumar Poddar, president of the Federation of Indian Chambers of Commerce and Industry (FICCI), said on Monday that "tremendous potentials" existed in bilateral trade between the world's two fastest-growing economies.
The trade between China and India hit a record $18.7 billion last year, jumping 38 percent year-on-year.
If the growth was sustained, the trade could soon overtake Indo-US trade, which is hovering around $30 billion, said Poddar, who is leading a FICCI CEO delegation in China.
However, Poddar said that in order to carry on the robust growth, it was crucial to diversify the Indian export basket from primary products to manufactured and processed items.
India's exports to China are largely restricted to primary and resource-based products such as iron ore.
"One of my tasks this time in China is trying to find ways to diversify the export basket, especially increasing the proportion of high value-added products," Poddar told China Daily.
The visit by the FICCI delegation, composed of a dozen representatives from modern Indian industries, is regarded as a crucial step for sustainable long-term growth of Sino-Indian trade.
Poddar said the delegation members come from a wide range of industries, including fertilizer, energy, food processing, petrochemicals, textile and tobacco sectors.
"We have diversified interests and are looking for opportunities in different fields," Poddar stated.
He said India and China, dubbed the "double engines" of economic development in Asia, would further benefit if they had a closer relationship.
"The two countries have many complementary aspects and we can learn from each other," Poddar noted.
"China's development depends highly on foreign trade and investment, while India mainly lies on the growth of domestic enterprises. Each of us can draw experience from the other."
While talking about the feasibility of reaching a free trade agreement (FTA) between India and China, Poddar said it would happen in the future but was still premature for now.
"We need to understand each other better before such an agreement is reached," Poddar remarked. "It takes time."