China to be India's largest trade partner, says Nath
China will overtake the US in a year if the present trend of over 30% annual growth in bilateral trade continues.india Updated: Mar 17, 2006 00:44 IST
China will overtake the US as India's largest trading partner in a year if the present trend of over 30 per cent annual growth in bilateral trade continues, Commerce Minister Kamal Nath said in New Delhi on Thursday.
The annual bilateral trade, currently estimated to be around $18 billion, is expected to reach $20 billion by 2007, one year ahead of target, said Kamal Nath, addressing the India-China Joint Business Forum, organised here by the Confederation of Indian Industry (CII).
"If the present annual growth of over 30 per cent, which in the last five years has even crossed 60 per cent, continues, China may be our largest trading partner in one year overtaking the US, with which our trade is around $21 billion," said Kamal Nath.
Echoing similar sentiments, China's Commerce Minister Bo Xilai said: "If the present trend of trade flow is maintained by 2010, the bilateral trade could reach $50 billion."
"There is a huge demand in the Chinese market. Last year, there was 95 per cent increase in input (raw materials) from India," said the Chinese minister, who is leading a large delegation comprising 40 officials and 42 business representatives to attend the India-China Joint Economic Group meeting being held after six years.
To boost investment flow, the two countries on Thursday signed a draft agreement on investment protection and promotion.
Inviting Indian companies to invest in China, Bo said the agreement would provide the legal basis to encourage the flow of investments.
The Chinese minister highlighted that the Canton Trade Fair, which is completing a centenary this year, would provide a good platform for Indian companies to showcase their products and services.
He said Indian investments currently constituted barely one per cent of the foreign direct investment flow into the country.
Stating that by 2010, the domestic market in China would be one of the biggest with the savings of residents expected to soar from current levels of $1.7 trillion to over $4 trillion, Bo said Indian companies should look more closely at the Chinese market for supply of luxury and consumer goods.
"We are keen that developing countries have a bigger share of the Chinese market," he said.
Setting up the mechanism to remove trade and investment hurdles, the two countries have decided to constitute six task forces to study issues like harmonisation of standards for products, non-tariff trade barriers, rules of origin of products and raw materials and consultations on WTO negotiations.
In addition, the two countries have decided to set up a CEOs' Forum to identify potential areas of investments and possible collaborations.
Led by China's Trade Development Bureau and the CII, the CEOs' Forum is expected to become operational in three months.