Modi brings home $22bn in China deals

2015-05-16 22:33
Indian President Pranab Mukherjee and Prime Minister Narendra Modi pose with new cabinet ministers including former Goa Chief Minster Manohar Parrikar. (Prakash Singh, AFP)

Indian President Pranab Mukherjee and Prime Minister Narendra Modi pose with new cabinet ministers including former Goa Chief Minster Manohar Parrikar. (Prakash Singh, AFP)

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Shanghai - Indian Prime Minister Narendra Modi got down to business on the final day of his trip to China on Saturday, saying his country was open for investment as firms signed deals worth more than $22bn.

"Let us work together in mutual interest and for progress and prosperity of our great countries," Modi told executives from 200 Chinese and Indian companies at a business forum in the Chinese commercial hub Shanghai. "Now India is ready for business."

The nationalist leader was on the final day of a three-day trip to his fellow Asian giant, as the two jockey for regional influence and India's trade deficit with China balloons.

Despite his hard-line reputation, Modi has moved to engage with Beijing since his election in 2014, and he was looking for an economic boost from the visit, seeking to deliver on election promises for foreign investment.

China is India's biggest trading partner with two-way commerce totalling $71bn in 2014. But India's trade deficit with China has soared from just $1bn in 2001 - 2002 to more than $38bn last year, Indian figures show.

Indian embassy trade counsellor Namgya Khanpa said the 21 agreements signed at the Shanghai event were "worth over $22bn", with another five exchanged earlier.

Different economic paths

Many of the contracts were for Chinese banks to finance Indian firms, and also included deals in the telecom, steel, solar energy and film sectors, she said.

They included an agreement for the China Development Bank to fund a power plant for India's Adani Power, as well as a steel project between Indian conglomerate Welspun and two Chinese firms, according to a list released by Indian officials. No individual deal values were given.

Modi welcomed potential Chinese investment in sectors including housing, renewable energy, high-speed rail, metro, ports and airports, adding that India was eager to draw on China's expertise in mass manufacturing.

"We are very keen to develop the sectors where China is strong," he told the business forum ahead of the signing ceremony. "We need your involvement."

"I strongly believe that this century belongs to Asia," he said as he sought to stress historical links between the two countries.

But they have followed significantly different economic paths in recent decades, with China rising to become the world's second-largest economy while India has lagged behind, although Modi's election raised hopes for reform among investors.

Earlier during Modi's visit Chinese President Xi Jinping welcomed him in Xian, the capital of his ancestral home province Shaanxi, in what his host said was an unprecedented gesture.

Nonetheless relations between the world's two most populous nations are soured by a long-running border dispute that saw them fight a brief war in 1962, and on Friday Modi told Premier Li Keqiang that China needs to "reconsider its approach" to their ties.

"Our relationship has been complex in recent decades," Modi said in Beijing, adding there were issues that "trouble smooth development of our relations".

Read more on:    narendra modi  |  india  |  china  |  economy

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