PRESS RELEASE
Statement of Shri V K Mishra, Chairman SRC of India China Trade Centre
and an expert of India China Trade Matters
POLICIES SHOULD BE MORE SOLUTION ORIENTED AND THE ONUS IS ON BOTH SIDES: MISHRA
India and China has increased rapidly in last few years, volumes of trade around 40 billion US$ are indicating that there is great demand of goods and dependability on each other is increasing. This is the real cause which will carry both countries in cordial bilateral trade and it will keep increasing with demand of population and creating volumes.
Many Indian companies have bought Chinese capital goods and their investments runs in several million dollars, recently they have faced the heat of labor laws where foreign technicians are supposed to be on proper employment visas. In a way it is always good to have workers on proper contract and they also work under local employment norms and should also pay taxes like Income Tax etc. but the sudden development in past few months is not giving comfort to the companies and they are bound to face delay in projects and in turn financial losses, there may be serious implication on guarantee clauses.
Similarly large companies from China already have big establishments in India have sudden jolt, it is not easy to make a good Human Resource Team in any company and if you need to reshuffle all the people due to some legal limitations the enterprises cries it as foul and expects some solution from Government.
It is very important for Trade and Industry representatives to sum up all issues and trade representations once in 6 months. The policies should be more solution oriented and it is onus on both sides.
There are great possibilities for India as a hub for catering SAARC and China should take advantage by investing in India as another factory as well as local service hub for catering large industrial supplies like capital equipments etc. There should be cohesive approach from China for taking Indian companies as their joint venture partners and understanding local environment in less time. Similarly China can accept Indian service Industry specially IT companies to cater China even Airlines of both countries can work together for providing services in south Asia.
The number of Indian companies in China is also going up in good numbers as the trade is increasing, but proper representation for such Indian Companies is required to cater them looking after their business interests in China.
BACKGROUNDER
OVER 100 INDIAN COMPANIES IN CHINA
According to the figures provided by the Chinese Ministry of Commerce, the cumulated value of Contractual Chinese investment (Projects) till Oct 2008 is US$22 Billion. The contractual Chinese investment (Projects) in India in 2007 stood at US$4.56 billion and the turnover realized from the contractual Investment (Projects) in 2007 was US$1.99 billion. The cumulative realized value till Oct 2008 of the contractual investment in projects is US$7.7 Billion. During Jan-Oct, 2008, the value of contractual Chinese projects in India is US$10.5 billion and turnover realized from these projects during Jan-Oct 2008 is US$3.6 billion.
As far as Chinese Investments in India for the year 2007 is concerned, it stands at US$16 million and Cumulative investment till September 2008 is US$74 million. During Jan-Sep 2008, the Chinese investments stood at US$32 million.
According to the Chinese Ministry of Commerce, the total amount FDI from India to China in the form of projects during 2007 is US$ 34 million in 78 Projects. In 2006, 60 projects involving US$52 million were added. The cumulative FDI from India into China in the projects till Oct 2008 is US$816 million in 406 projects. The cumulative turnover realized during this period is US$288 million. During Jan-Oct, 2008 the total FDI from India to China in 72 projects is US$175 million and turnover realized is US$81 million.
iv) Indian Companies in China
Indian business presence in China is in a range of operations including manufacturing (pharmaceuticals, refractories, laminated tubes, autocomponents, wind energy etc.), IT and IT-enabled services (including IT education, software solutions, and specific software products), trading, banking sector (major Indian banks from the public and private sector are present in China), and trade and industry associations including CII and FICCI. Air India also has an online station in China. The vehicles for the presence of Indian companies in China are joint ventures with the Chinese partners, wholly owned foreign subsidiaries or through contract manufacturing. Some of the prominent Indian companies in China include Ranbaxy, Orchid Pharmaceuticals, Dr. Reddy Laboratories, Aurobindo Pharma, NIIT, Bharat Forge, Infosys, TCS, Satyam Computers, APTECH,Orind Refractories, Essel Packaging, Suzlon Energy, State Bank of India, Bank of India, Punjab National Bank, Canara Bank, ICICI Bank, Bank of Baroda, Reliance Industries, KGK Diamonds, Sundaram Fasteners etc. The total number of Indian companies is slightly over 100.