Narendra Modi, Chief Minister of Gujarat, India, is leading a high level India delegation visiting China this week. Modi and other delegates hope to attract Chinese investment in sectors like chemicals, pharmaceuticals, electrical equipment and transformer manufacturing.
Located on the west coast of India, Gujarat is one of the fastest growing economies in India. Despite sluggish export recovery and a slowdown in financial inflows into the Indian economy led by the continued global recession, Gujarat successfully managed to keep its double-digit economic growth rate. It now contributes 22 percent of Indian exports.
Modi's visit takes place soon after Bihar Chief Minister Nitish Kumar's China visit in June and Madhya Pradesh Chief Minister Shivraj Singh Chouhan's China visit in September.
Maheshwar Sahu, principal secretary of the Industries & Mines Department of the Government of Gujarat, said the Sino-Indian business interactions are taking place in response to both sides' developing needs.
"On the China end, this calls for more active investment by Indian companies and better market access conditions. On India's end, China's exports need to be more well-supported by local manufacturers," Sahu said.
Sahu hopes the cooperation will open up new avenues for capital-intensive and high-tech industries in Gujarat, sectors which have only recently started to develop. Simultaneously, Chinese chemical, pharmaceutical, and electrical equipment companies can effectively lower their costs, he said.
China's Tebian Electric Apparatus Stock Co. Ltd (TBEA), a maker of high-voltage transformers, has already signed a preliminary accord with the Gujarat government to set up a manufacturing facility in the state. The initial investment will be about US$100 million, Leng Yong, managing director of TBEA Energy (India) PVT. Ltd, said. Chinese multinational Huawei has also expressed interest in investing in Gujarat.
Sino-Indian economic relations have developed robustly in the last decade. China has become India's largest trade partner in goods while India is now China's seventh largest export destination.