India’s PM Narendra Modi signed trade and economic co-operation deals worth US$22bn in his visit to China last week.
The agreements cover a range of industries including renewable energy, the financial sector and ports, a sign of the Modi government’s commitment to remove trade barriers and enhance bilateral trade: “India is ready for business,” Modi announced.
A spokesperson for the Indian ministry of External Affairs has tweeted a document with a list of the 26 business deals. For example, India’s Adani Group, a multinational conglomerate, has signed deals in the areas of ports, special economic zones, industrial parks and gas power generation, with a financing agreed with China Development Bank (CDB) for the Mundra power plant phase I, II and III, in the Eastern state of Gujarat. The Adani Group and China’s Golden Concord Holdings also committed to setting up an integrated solar photovoltaic industrial park in Mundra, one of four deals concerning renewable energy.
CDB signed a total of three financings, the other two related to equipment for Bharti Airtel, one of India’s top telecommunications company. China National Technical Import and Export Corporation (CNTIC) signed two deals related to steel projects in India. The document does not include further details on the financing for these projects.
The two sides resolved to take joint measures to alleviate the skewed bilateral trade so as to realise its sustainability. India-China joint statement.
These deals add to the 24 government-to-government deals signed on May 15, worth an estimated US$10bn, and to China’s US$20bn of investments over five years, including the establishment of two industrial parks, which were announced during President Xi Jinping visit to India last September.
Since then, progress has been slow, which, according to Reuters, is in part due to the difficulties Modi has faced in winning political support for easier land acquisition laws.
The two countries have bilateral trade relations worth US$71bn, but with a trade deficit against India at nearly US$38bn – an imbalance that was directly addressed in a joint statement following the talks. “The two sides resolved to take joint measures to alleviate the skewed bilateral trade so as to realise its sustainability […] Both sides will make full use of the India-China Joint Economic Group to work on this,” the statement reads.
Modi’s three-nation tour continued to Mongolia, where he signed a line of credit worth US$1bn for infrastructure projects, and to South Korea, where seven bilateral agreements were stipulated.
The South Korean ministry of strategy and finance and Korea Eximbank expressed their intention to contribute US$10bn for co-operation in infrastructure, including an economic development co-operation fund of US$1bn, and export credits of US$9bn for targeted sectors like smart cities, railways, power generation, transmission, as well as other sectors to be agreed, according to a joint statement issued after the talks.