Case study on- India, China on course to achieve $100 billion bilateral trade by 2015Submitted by:Imran Khan(20097) Sujith Surendran(20083) Rakesh Roshan(20069) Ratish .k(20072)

THE CASE FACTS India, China on course to achieve $100 b bilateral trade by 2015 Chinese firm to invest Rs.2,500 cr in green energy project in Gujarat Ahmedabad/New Delhi: Ahead of chief minister Narendra Modi's China visit, an Memmorandum of Understanding(MoU) was signed on Thursday between the state government and the Chinese firm, TBEA Energy (India) Private Ltd, for a Green Energy Park in Karjan near Vadodara The MoU was signed by Maheshwar Sahu, principal secretary, Gujarat's industries department, and Zhang Xin, chairman, TBEA Energy. The governor of China's Xinjiang province, Nuer Baikeli, and Union minister for commerce and industries Anand Sharma were present at the signing of the agreement with the Chinese power company.

TBEA will invest in two phases Rs 2,500 crore for the Green Energy Park. The first phase of the project, involving an investment of Rs 400 crore, will lead to setting up of a plant to manufacturer ultra high voltage transformers. Work on the first phase is expected to start soon, while production will commence next year. This investment is expected to create around 2000 jobs in the state. The second phase will see investment of the remaining amount. The transformers will be for 'Indian markets', and also for African countries and the Middle East. Chief minister Narendra Modi will visit China later this month to further strengthen cooperation. The state government will facilitate the process of obtaining necessary permissions and approvals. To ensure completion and smooth operation of the TBEA Green Energy Park, the state government will also facilitate availability of the necessary infrastructure. TBEA, the third largest transformer manufacturer in the world, has been a major supplier of transformers and reactors to India in recent years. The company will bring clean and the latest technology to India but currently it is looking to consolidate its position by setting up a manufacturing base in the country.

Union Minister for Commerce, Industry and Textiles Anand Sharma on Thursday said both nations were on the course to achieve the bilateral trade target of $100 billion by 2015. Mr. Sharma also announced that a Chinese company, in collaboration with Indian partners, would pump Rs.2,500 crore in green energy. These issues came up for discussion during Mr. Sharma's meeting with visiting Governor of Xinjiang province of China Nur Bekri here. Mr. Sharma said trade between India and China had seen exponential growth in the last few years. The total trade volume had gone up from $2.3 billion in 2000-01 to $59.62 billion in 2010-11 . Mr. Sharma raised the issue of India's concern over the massive trade deficit. The trade deficit for the Indian side had increased from $9.1 billion in 2006-07 to $20.8 billion in 2010-11. A balanced trade is needed for long-term, sustainable and harmonious development of economic cooperation between the two countries.

Mr. Bekri said that with extensive economic reforms in the last three decades, Xinjiang had developed greatly and now offered huge business and investment opportunities in sectors such as oil and gas, mining, agriculture, tourism, IT, pharmaceutical and biotechnology.

CLEAN GREEN ENERGY IN GUJRATIn last two decades, environmental concerns, energy security and socio-economic benefits have brought clean energy to forefront. Clean energy s share in Indian energy mix is relatively small when compared to energy from fossil fuels. Central and federal governments are keen to promote use of clean energy and have formulated policies and incentives to attract investments from private and public sector companies. This report seeks to identify investment and technology transfer opportunities in space of clean energy in Gujarat. It examines current scenario, regulatory polices, technology maturity, competition, barriers for different clean energy technologies in Gujarat. Central policies and developments in other Indian state have played an important role in development of clean energy in India.

ScopeThe scope of this study is limited to use of new and renewable energy for electricity and transportation and following sectors have been examined in detail: Wind Energy Bio-Energy Solar Energy Bio Fuels Municipal Solid Waste (MSW) to Electricity

THE BACKGROUND CONCEPTSTrade and Economic Relations: India and China resumed trade officially in 1978. In 1984, the two sides signed the Most Favoured Nation Agreement. 1. Bilateral Institutional Mechanisms India-China Joint Economic Group on Economic Relations and Trade, Science and Technology (JEG) is a ministerial-level dialogue mechanism established in 1988 during the visit of former Prime Minister Rajiv Gandhi to China. A Joint Study Group (JSG) was set up after former Prime Minister Vajpayee s visit to China in June 2003 to examine the potential complementarities between the two countries in expanded trade and economic cooperation. As per its recommendation, a Joint Task Force (JTF) was set up to study thefeasibility of an India-China Regional Trading Arrangement. JTF Report was completed in October 2007.

2. Bilateral TradeThe overall bilateral trade figures for 2010 released by the China Customs are as follows:2008 India Exports to China Growth % China Exports to India Growth % Total IndiaChina Trade Growth % Trade Balance for India 20.34 2009 13.70 2010 20.86

38.76 31.52

-32.63 29.57

52.19 40.88

31.12 51.86

-6.17 43.28

38.25 61.74

34.02 -11.18

-16.55 -15.87

42.66 -20.02

Highlights: India-China total trade crossed the target of US$ 60 billion for 2010 and stood at US$ 61.74 billion, recording an increase of more than 52%. India s exports to China for year 2010 reached US$ 20.86 billion, a growth of more than 52% when compared to year 2009. However, India s exports to China in 2010 were only slightly more than the figure for year 2008 when our exports reached US$ 20.34 billion. India s exports in 2010 recorded an increase of only 2.5%. China s exports to India for year 2010 reached US$ 40.88 billion, an increase of almost 41% compared to 2009. The trade deficit for India for year 2010 stood at more than US$ 20 billion, more than US$ 15.87 billion trade deficit in year 2009. The total trade for the first five months of 2011 (Jan-May) stood at US$ 29.36 billion, a year-on-year increase of 17.15 %. The trade deficit in this period was US$ 7.69 billion

3. Bilateral investments Chinese Investment in India 2007- US$16 million 2008- US$49.1 million (Cumulative investment till Dec 2008 was at US$91.1 million) Jan-Sep, 2009- US$ 32.7 million. Indian Investment in China 2006 - US$52 million 2007- US$ 34 million in 78 Projects 2008- US$257 million in 92 projects ( turnover realized was US$88.1 million and the cumulative committed FDI from India into China in the projects till 2008 wasUS$898 million in 426 projects) Jan-Sep 2009- 30 million in 57projects.

4.Indian Companies in ChinaSome 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.

5. Chinese Companies in IndiaMany large Chinese State-owned companies in the field of power generation, machinery and infrastructure construction have won projects in India and most of these companies also have a presence in India. These include Sinosteel, Shougang International, Baoshan Iron & Steel Ltd, Sany Heavy Industry Ltd, Chongqing Lifan Industry Ltd, China Dongfang International, SinoHydro Corporation etc. Many Chinese companies into electronics, IT and hardware manufacturing are also based in India. These include Huawei Technologies, ZTE, TCL, Haier etc.

Priority List of Imports by India's from ChinaElectrical Machinery, Machinery, Plastic, 0rganic Chemicals and Inorganic Chemicals, Iron And Steel, Iron/Steel Products, Rare Earth Metals, Fertilizers, Impregnated Text Fabrics, Manmade Filament, Fabric, Silk; Silk Yarn, Fabric, Vehicles, Mineral Fuel, Oil , Aluminum etc. Note:- Out of total imports by India from China , 47% are of Electrical products, electronic products and machineries .Hence, there is huge potential in Indian market for other Chinese products .

Priority List of Imports by China from IndiaMachinery, Plastic, Ores, Slag, Ash, Iron And Steel, Metals,Organic Chemicals Salt; Sulphur; Earth, Stone, Inorganic Chemicals; Rare Earth Metals, Cotton and Yarn, Fabric, Copper and Articles Thereof, Electrical Machinery, Hides And Skins, Artificial Flowers, Feathers, Tanning, Dye, Paint, Putty, Precious Stones, Fish And Seafood etc. Note :- 76% to 80% of total exports by India to China consists of Ores, Slag, Cotton, Yarn, Fabric; Precious Stones, Metals, Artificial Flowers, Feathers and hides, Copper Articles and skin

Some keywordsWhat Does Bilateral Trade Mean? The exchange of goods between two countries. Bilateral trade agreements give preference to certain countries in commercial relationships, facilitating trade and investment between the home country and the foreign country by reducing or eliminating tariffs, import quotas, export restraints and other trade barriers. Bilateral trade agreements can also help minimize trade deficits. What Does Tariff Mean? A taxation imposed on goods and services imported into a country. Also known as a duty tax. Governments generally impose tariffs to raise revenue and protect domestic industries from foreign competition caused by factors like government subsidies, or lower priced goods and services What Does Trade Deficit Mean? An economic measure of a negative balance of trade in which a country's imports exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets.

CII is a non-government, not-for-profit, industry led and industry managed organisation, playing a proactive role in India's development process. Founded over 116 years ago, it is India's premier business association, with a direct membership of over 8100 organisations from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 90,000 companies from around 400 national and regional sectoral associations. The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the growth of industry in India, partnering industry and government alike through advisory and consultative processes.

conclusionIndia and china is doing business in each other s country. Many indian companies are there in china and more company is planned to be established in china and even china is planning the same. India and china has really been developing their relationship by expanding their business in one another s country. The bilateral trade between these two countries really will acheive the target of $100 bn. And with this we will have good relation.