Indo-China trade can be driven further: Study

Small and medium enterprises (SMEs), particularly in sectors such as textile, leather, chemicals and dyes among others, have the potential to drive bilateral trade between India and China to higher levels, a study by the Federation of Indian Micro Small and Medium Enterprises (FISME) has found.

According to the study, in the leather sector alone Chinese imports are to the tune of $4 billion which is greater than the entire Indian exports to the rest of the world. "Ironically, China is not even on the radar of Indian leather exporters," the study stated.

The study commissioned by the department of Commerce, United Nations Conference on Trade and Development was aimed at changing Indian industry's outlook towards China as a competitor to that of a potential buyer.

Bilateral trade between India and China is growing by more than 50 per cent annually and is slated to cross the $100 billion mark within three years, the study noted.

"The concept of enhancing Indian exports to China might sound counter-intuitive to many, but the study clearly demonstrates huge untapped areas where Indian SMEs are very competitive but have so far overlooked the burgeoning Chinese market," Fisme president Mohan Suresh said.

Suresh further added that to provide onsite support to members of Fisme it has already opened an office in Beijing and two more are slated to come up in Shanghai and Shenzhen.

According to the study, another sector which has huge potential for cooperation is engineering and electronics. "A large number of Chinese SMEs have excellent manufacturing facilities but suffer from handicaps such as language and barriers of international commercial transaction among others.

Indian SMEs in this sector could tie- up with them and supplement India operations and export the to products other developing countries," the study noted.

The study further recommends possible strategies for Indian SMEs to enter into the Chinese market, These include internet or television shopping as low cost satellite TV stations are cost-effective modes of marketing.

Also, Indian SMEs could explore possibilities of loose collaboration with capable Chinese partners, which in the past have been a successful entry strategy for companies from Hong Kong and Taiwan, the study stated.