Indian businesses are making a beeline to China, attracted by its quality infrastructure, investor-friendly polices, low-cost operations, huge domestic market as well as the potential to tap neighbouring southeast Asian and global markets.
Larsen & Toubro (L&T), India's top engineering and construction company, is one of the major success stories that Indian Inc has achieved in China.
L&T has opened its first overseas electrical manufacturing plant in Wuxi, a booming east Chinese city in Jiangsu Province, to manufacture low-voltage switchgear.
L&T (Wuxi) Electric Company Limited (LTW), the wholly-owned subsidiary, plans to invest $11 million in the state-of-the-art plant and introduce new products as well, chairman of LTW and whole-time director of L&T RN Mukhija said.
"I feel inspired and charged every time I come to this great land, I re-invent China. And I travel back home rethinking on our roadmap for further development of our relations," Mukhija said while acknowledging the all-round support offered by the government of Wuxi in setting up operations and completing the construction work earlier than planned.
Another major achievement is that of AVT Natural Products Ltd (AVT NPL), which is the first Indian company to successfully tap China's huge agriculture sector and set up a marigold plantation and processing unit for export.
The Kochi-based AVT NPL plans to invest $2-3 million in China to set up a dehydration plant, which is a part of the processing of marigold," AVT NPL Managing Director MSA Kumar said.
The company has established a fully-owned subsidiary, Tonghe AVT Natural Ltd, in Tonghe County in northeast China's Heilongjiang Province.
In the IT sector, all major Indian players, including TCS, Infosys, Satyam, NIIT and Wipro, are now well-entrenched in the Chinese market with i-flex Solutions being the recent entrant.
A top IT solutions provider to the global financial services industry, i-flex Solutions has set up a base in Shanghai to tap the opportunities as the Communist giant opens up its banking sector early next month.
"We are currently in the investment phase to expand our operations in China," i-flex Solutions Chairman and Managing Director Rajesh Hukku said.
Indian banks have also expanded their operations in China in a big way.
The State Bank of India was the first to get the license to operate normal banking operations in the country. SBI has since started operations in Shanghai.
Bank of India has also got the license recently to start banking services in the southern Chinese city of Shenzhen.
Other Indian banks like Canara Bank, Punjab National Bank and ICICI Bank have set up Representative Offices.
India-China bilateral trade in 2006 is expected to cross a record $20 billion mark with a substantial trade surplus in Beijing's favour for the first time.
Experts and trade bodies say India must diversify its exports basket to China to reverse the dwindling trend in Indian exports to the Communist giant.
Currently over 50 per cent of Indian exports to China is dominated by iron ore and slackening Chinese demand for the raw material has affected the balance of trade between India and China recently.