Indo-China trade pact under study

India and China, considered among the world's fastest developing nations, have set up a joint study group with members from both the countries to examine the potential complementarities in expanding trade and economic ties and the feasibility of a India-China Free Trade Agreement.

Members comprising both economists and officials will come out with a report within the next 6-7 months, according to the India-China Chambers of Commerce and Industries (ICCCI)

At a press conference held prior to the South China Commodities Exhibition to take place from December 9-12, Rupa Naik, executive director of All India Association of Industries (AUIAI) said, "The time is opportune for India and China to seek and enhance synergies in sectors where they have competitive advantages."

While India is becoming a global base for IT and IT enabled services, China has become one of the world's manufacturing and processing bases.

Currently, India's exports to China are only inclusive of raw-materials and unprocessed products, while China is already among the top countries producing value-added manufactured goods for exports.

According to Suresh Deora, general secretary of ICCCI, India can learn to operate more efficiently in the manufacturing sector through China.

He said there were already two joint venture companies operating in India, and that a dozen more were likely by 2012.

According to Naik, through the joint efforts India could diversify its exports to other goods and products through the co-operation, and it would balance out the trade.

Trade between India and China has already crossed $9.7 billion in September 2004, and is expected to top $10 billion by end 2004.

The trade and industry of both countries envision that this figure could go up to $30 billion by 2009.

To boost exchange, a South China Commodities Exhibition is planned. It was last held in March 2004 and attracted over 31,000 businessmen, and 27,000 general visitors. Contracts worth approximately $30 million were signed.