FOCUS: CHINA

As two of the fastest growing emerging market economies, India and

China together symbolize an economically vibrant Asia. Both countries

have experienced rapid economic growth outpacing average rates of

growth of developed nations in recent years, with an upswing in trade

and investment. They have also emerged as markets with huge

untapped business opportunities. On account of their rapid economic

progress and growing influence, both countries have also begun to

assume significant roles in global economic issues in recent times.

China and India have worked together to defend common economic

concerns at the WTO, climate change negotiations at the aegis of the

UN, and in the evolving global financial regulatory mechanism post the

financial crisis.

01

Director General’s MessageINSIDESTORIES

Message from Indian Ambassador03Message from Chinese Ambassador04Enhancing Indian Industry's Engagement with ChinaDr Naushad Forbes, President Designate, CII and Chairman, CII International Council

05

06

PolicyBarometer09Industry Voices12

CEO Speak: Dr Pawan GoenkaChairman, CII Core Group on China and President - Automotive & Farm Equipment Sector, Mahindra & Mahindra Ltd.

DECEMBER 2015

Mr. Narendra Modi, Prime Minister of India at the India China Business Forum in Shanghai

The convergence of mutual interests at global economic multinational corporations production networks to

forums serves as a conduit for smoother bilateral leverage Indian manufacturing for exports to China. This

engagements and also deepens the necessity of will of course involve bringing in substantial changes in

maintaining strong economic ties. Sino-Indian economic the manufacturing ecosystem in India, to make it globally

cooperation is set to scale new heights in the aftermath competitive.

of the recent high level visits of the Chinese President HE

Mr Xi Jinping to India and Hon’ble Prime Minister Shri CII has been actively engaged in promoting Indo-China

Narendra Modi to China. PM Modi’s visit to China in May business ties. The CII led CEOs delegation to China

2015 has imparted significant new dynamism and during the PM’s visit in May 2015, was extremely fruitful.

momentum to Sino-Indian economic engagements. In the presence of the Prime Minister at the India-China

New areas of cooperation are being embraced, including Business Forum in Shanghai, Indian and Chinese

manufacturing, railways, industrial townships, etc, while companies exchanged 24 agreements for cooperation

people to people linkages are being accorded high totaling US$22 billion. CII signed an institutional

importance. agreement with the Provincial Government of Guizhou

for promoting participation of Indian IT companies in local

China is expected to play a growing role in the PM’s IT projects. CII also signed a tripartite agreement with

signature economic initiative “Make in India”. China has Zhisland and Xifu, business institutions in China, for

already pledged US$ 20 billion worth of investments in institutional cooperation in B2B engagements.

India’s infrastructure sector over the next five years.

China has also agreed to set up two industrial parks, one CII has a China Core Group, which focuses on building

each in Gujarat and Maharashtra. The latest Sino-Indian commercial ties and B2B linkages with China through its

initiative aims to raise bilateral trade value to the US$ 100 manifold initiatives. A Report on China prepared recently

billion mark and the two sides have pledged to address at the aegis of the Core Group has made specific

trade barriers through a task force. recommendations on leveraging opportunities with

China. In order to provide further thrust to the economic

The agreements on establishing a provincial partnership engagements with China, CII also recommends creation

between Karnataka and Sichuan and sister-city of a special China Cell cum Knowledge Centre within the

relationships between Aurangabad-Dunhuang, Prime Minister's Office or Ministry of Commerce and

Chennai–Chongqing and Hyderabad – Qingdao are Industry with both Government and industry

welcome gestures. Mr Modi’s announcement of participation, to direct and monitor the achievements of

electronic visas for Chinese tourists to India has been the CII Core Group goals.

another strategic takeaway.

The India-China economic engagement will be one of the

Coming to business specifics, India will need to engage most significant as the two large economies progress on

with China with a definite economic agenda and push for their development paths. We must jointly leverage the

specific actions for market access in certain identified huge opportunities and forge closer business

sectors like IT services, pharmaceuticals, auto partnerships.

components, tourism and entertainment. Around 18

sectors have been prioritized after detailed industry level

discussions for Chinese FDI in areas under capital

goods, specialty products, consumer goods and

infrastructure. Interactions with Indian industry will help in Director General

detailing sector specific actions to attract Chinese FDI in Confederation of Indian Industry

these areas. India also needs to look at attracting

Chandrajit Banerjee

FOCUS: CHINA 02

DIRECTOR GENERAL'S MESSAGE

FOCUS: CHINA 03

MESSAGE FROM AMBASSADOR

The landmark visit of Prime Minister Narendra Modi to China in May

2015, coming just eight months after the successful visit of

President XI Jinping to India, has provided fresh impetus to the

India-China relationship. The two leaders noted that bilateral

relations are poised to play a defining role in the 21st Century in Asia

and indeed, globally, and affirmed that this constructive model of

relationship between the two largest developing countries and two

major poles in the global architecture provides a new basis for

pursing state-to-state relations to strengthen the international

system.

The all-round expansion of relations is particularly visible in our

economic and commercial engagement as developmental

partnership is a core component of our Strategic and Cooperative

Partnership. India and China are two of the fastest growing major

economies in the world today. Our bilateral trade has grown rapidly

in the last decade with trade volume crossing US$70 billion in 2014.

Chinese investments into India are poised for a major expansion as

major projects have been announced recently and many more are in

the pipeline. The Chinese economy too offers large potential for

Indian exporters and investors across sectors and many Indian

companies have established successful operations in China.

Such two-way investment flows and enhanced access to the

Chinese market for Indian products and services would help to

balance the large trade deficit and make bilateral trade sustainable,

Indian industry can plug into vibrant East Asian supply chains by

leveraging ‘Make in India’ while Chinese companies may look into

investing in India in alignment with their ‘ Going Global’ strategy.

India with its large labour pool, big markets and investor-friendly

environment welcomes Chinese companies in its infrastructure and

manufacturing missions.

I commend CII and its office in Shanghai for partnering with the

Indian Embassy for building mutual synergies between businesses

of India and China I believe that this edition of Global Watch is timely

and provides valuable information and suggestions for further

strengthening our economic engagement.

H.E. Mr Ashok K. KanthaAmbassador of India to China

FOCUS: CHINA 04

MESSAGE FROM AMBASSADOR

I congratulate the Confederation of Indian Industry on this issue of

Global Watch which focusses on India – China Relations.

Bilateral relations between India and China are poised to play a

defining role in the 21st Century in Asia and indeed, globally.

Profound changes are taking place in the global landscape, and the

Asia Pacific is undergoing new developments. China-India relations,

with growing breadth and depth, have gone beyond the bilateral

scope and are acquiring increasing global significance. As major

players, we must take up our due responsibility with a sense of

purpose and mission. As ancient civilizations, we can and should

leverage our potential and contribute our wisdom to regional and

global development.

Commercial and economic engagement has been a core dimension

of the burgeoning relations between India and China, which have

witnessed an all-round expansion in recent years. Bilateral trade has

grown rapidly in the last decade with the aggregate touching $70

billion in 2014. The economic engagement is immensely diverse,

dynamic and vibrant, with new sectors being added continuously,

including renewable energy, telecommunications, and media and

entertainment.

We have only tapped the tip of the iceberg in terms of potential

investment. Given the size of both economies and their global

engagement, investments in particular can reach much higher levels

in both directions and across all sectors.

With growing passion, closer cooperation, and deeper mutual

understanding, our relationship is poised for great success and

mutual enhancement.

H.E. Ambassador Le YuchengAmbassador of the

People’s Republic of China to India

FOCUS: CHINA 05

VIEWPOINT

ENHANCING INDIAN INDUSTRY’S ENGAGEMENT WITH CHINA

The India-China relationship in recent years has attracted

global imagination, not least because both countries are

demographically-dominant and large developing

countries of Asia, grappling with common issues of

poverty alleviation and development. The two

economies have adopted different growth models -

China, which commenced its reform journey ahead of

India, has recorded impressive growth rates for more

than three decades and India too is rapidly catching up.

Inevitably, the economic relationship of the two giant

nations has gathered momentum over the last decade.

From just about $3 billion in trade at the turn of the

century, the countries are now eyeing $100 billion worth

of merchandise trade. However, the imbalanced nature

of this engagement raises issues of sustainability. In this

context, the summit-level engagements over the last

year or so evoke hopes of a more sustainable trade

trajectory. It is noteworthy that Prime Minister Narendra

Modi and President Xi Jinping have met as many as five

times in this period with two bilateral visits as also on the

sidelines of multilateral meetings.

Prime Minister Modi’s visit to China in May 2015 was a

seminal opportunity to discuss economic engagement,

and many new initiatives were decided upon by the two

governments. Interestingly, the PM’s closed-door

interaction with top Chinese companies is said to have

been very encouraging, and we are seeing this translated

on the ground as these large enterprises begin to

develop their India strategies. In addition, at Shanghai,

the PM addressed business communities of both sides,

for which CII had organized a high-level delegation.

Businesses from the two countries exchanged 26

agreements totaling $22 billion on this platform,

including trade, investments and financing.

A key outcome of the visit was the establishment of a

task force that would address market access issues

faced by Indian companies in their sectors of interest.

Several policy matters have been pending with the

Chinese government for protracted periods. For

example, approvals for pharmaceutical ventures in China

take a long time, raising costs for Indian investors,

including for products that are already acceptable to the

USFDA. In the IT sector, preferences for Chinese state-

owned companies discourage Indian companies from

applying for contracts.

Encouraging signs of cooperation are visible in the

agreements inked for railway cooperation, smart cities,

and skill development. The Chinese government

expressed desire to engage in India’s high-speed rail

project and has already commenced training for railway

personnel. It would also take up station modernization in

India. For skill development, a university is proposed in

India with Chinese expertise.

The agreement regarding co-production of films was a

major step forward. India’s media and entertainment

sector enjoys vast viewership across the world, but is

impacted in China due to restrictive policies for foreign

films. The co-production agreement has already resulted

in several film ventures being signed, and this would

hopefully open up the market for more Indian films and

television programs.

Indian companies are challenged by the size and

diversity of the Chinese market as well as language and

regulatory issues. However, they would need to be much

more active in China if the trade balance is to be

redressed. With their successes in other markets, Indian

companies can be confident about their operations in

China as well. CII’s China office in Shanghai can be an

excellent starting point and our China desk in New Delhi

is ready to assist in every way.

As the Chinese economy slows down and the Indian

economy opens up, the two countries can embark on

new economic cooperation paths. We look forward to a

robust and well-rounded economic engagement with

China in years to come.

Chairman, CII International Council

Naushad Forbes

President Designate, CII and

FOCUS: CHINA 06

CEO SPEAK

Need to Adopt a “China-Specific” Policy to Gain Greater Market Access in China

Q. Could you share your views on the current

patterns of India’s trade with China?

A predominant feature of bilateral trade has been the

rising trade imbalance with China which raises much

concern. This also induces fears of cheap Chinese

imports flooding the Indian market with adverse effect

on local producers. In fact, Chinese imports have

frequently been the target of anti dumping actions by

India.

There has been a rapid growth in bilateral trade

between India and China over the past decade.

Bilateral trade exhibited a very robust growth during

2003-04 till 2008-09, with remarkable average annual

growth rate of 52.2% – years which were also marked

by high GDP growth rates in India. Bilateral trade shrank

in the aftermath of the economic crisis and has again

picked up. In 2014, aggregate trade stood at $72

billion, of which China’s exports to India crossed $60

billion and India’s exports to China totaled $12 billion.

Despite the pace, the trade engagement has been

relatively small as a proportion of total trade in both

countries. Imports from China constituted 13.5% of

India’s total imports and exports to China constituted a

low 3.8% of its total exports in 2014.

The Chinese President Mr Xi Jingping’s recent

perspective that the two countries should forge a batch

of demonstration projects in areas such as

infrastructure construction like railways and industrial

investment, broaden cooperation in fields such as

services trade, investment and tourism, and gradually

realize a general balance and sustainable development

of bilateral trade indicates that China is sensitive to

India’s concerns over the skewed trade deficit.

While concern regarding Chinese imports and bridging

the trade gap assumes crucial significance, a closer

analysis of the imports from China which are topped by

items like electrical machinery and equipments etc.

reveal that these imports have majorly been used by the

Indian telecom industry and private power producers in

India to meet domestic supply gaps. This also raises the

issue of the necessity to address these supply

constraints to reduce the overt dependence on

imports. While Indian manufacturing needs a revamp,

an option could well be to seek Chinese FDI in these

selective areas.

Regarding India’s exports to China, raw material like

cotton, minerals and metals dominate the export

basket. “Cotton” tops the list as China has a

tremendous demand for raw cotton which cannot be

met from its domestic supplies. Copper imports from

India are also increasing due to China’s fast pace of

urbanization and increased production of electric or

hybrid cars. Of late, a gradual structural shift in India’s

exports to China is also becoming evident with the rise

in exports of items like electrical machinery &

equipment which is one of India’s leading global

exports. However, with the high domestic demand for

raw materials in the Chinese economy, minerals, cotton

and metals may well continue to be among the top

export items from India in the near future. Exports to

Interview with Dr Pawan Goenka,Chairman, CII Core Group on China and President - Automotive & Farm Equipment Sector, Mahindra & Mahindra Ltd.

FOCUS: CHINA 07

CEO SPEAK

China are also not consistent with India’s global trade

profile, where engineering goods, agricultural produce

and pharmaceuticals have been making rapid strides.

Q. What are the major road blocks which impede

trade with China ?

Indian exports face restrictive market access in China

due to several non tariff barriers (NTBs). Technical

standards, certification, food safety requirements,

phyto sanitary measures, regulatory practices and

regulations in terms of national treatment pose

problems. In addition, procedures for product and

corporate registrations, delays in obtaining import drug

licences, customs procedures, re-inspection,

packaging regulations, banking procedures for

remittance are related hurdles. For Indian producers,

these NTBs affect prospects of key export products like

f ru i ts and vegetables, non basmat i r ice,

pharmaceuticals etc which have great export potential.

The Chinese language also poses a problem for Indian

traders. This situation could be easily remedied if the

rules and regulations were published and updated in

English. Moreover, Indian companies in IT,

pharmaceuticals, media etc are encountering a lot of

hindrances to get the requisite foothold in the Chinese

market. These issues are not specific to Indian

exporters but impact all China’s trading partners; Indian

exporters must make greater efforts to tap the Chinese

markets.

Q. What are your suggestions for enhancing business

partnerships with China?

It is my understanding that India’s importance for China

is likely to increase substantially in the future – both as a

market and an investment destination with the need for

China to diversify its export markets and the strategic

and geo-political importance of Sino-Indian ties. We

need to leverage this opportunity and firmly push for

sector specific market access particularly in sectors like

pharmaceuticals, auto components & light engineering,

media and entertainment, tourism and IT services. A

“China Specific Strategy” needs to be adopted for

greater market access.

Indian pharma players for instance need to focus on

‘differentiated generics’ and specific molecules which

are not available in China but can be provided by Indian

companies at competitive prices. Some of the

Members of a CII CEOs Delegation at a luncheon interaction in Shanghai

FOCUS: CHINA 08

CEO SPEAK

Q. Can you tell us something about CII’s current

engagements with China?

CII has been very proactive in helping to build business

links with China. The CII China Core Group helms the

spectrum of initiatives and our office in Shanghai is a

nodal point for Indian and Chinese companies,

undertaking key networking activities. CII has

established institutional partnerships with over fifteen

organizations and industry chambers in China including

the China Council for Promotion of International Trade

(CCPIT) and All China Federation of Industry &

Commerce (ACFIC). CCPIT is CII’s major MoU partner

in China and CII also works very closely with the

provincial offices of CCPIT.

The CII led CEO delegation to China during the visit of

the PM in May this year, was a huge success. The deals

signed during the PM’s visit involved major Indian

industries from the Indian and Chinese side and

covered a wide range of industries including electricity,

steel, solar energy, port development and film

production. CII takes part in trade fairs in China

including the global services expo, while also inviting

Chinese companies to its own exhibitions, seminars

and conferences. CII also participated at the 2nd China

Outbound Forum which was held during November 20-

22, 2015 in Sanya, Hainan, China. We are now

strategically taking up cooperation between the states

of India and the provinces of China as we believe that

this localized interaction would be central to greater

economic engagement going forward.

challenges faced by Indian IT companies in China may

be addressed through measures like identification of

select pilot projects which can be jointly executed with

Indian companies to showcase India’s technological

expertise and commitment. Collaboration in

development of a platform for collecting information

may also promote business development. Improved IP

laws will encourage Indian IT companies to bring

proprietary products/ content to the market.

Government to government exchanges in some cases

may help to ease regulatory constraints. We need to

coherently work both at the Government and Industry

fronts to realise the opportunities. I have already

mentioned the necessity of attracting Chinese FDI in

select sectors. .

Mr. Sumit Mazumder, President, CII greeting Mr. Li Keqiang, Premier of China

FOCUS: CHINA 09

POLICY BAROMETER

Key CII Recommendations to Enhance India China Economic Relations

The CII China Core Group has studied in detail the trade and investment engagement of the two countries. Observing that

India’s imports continue to be dominated by high-skill and technology intensive manufacturing products and its exports by

primary goods, it points out that China’s cost and pricing advantage with respect to India has climbed down in recent years and

would continue to erode as costs in China rise. At the same time, India is likely to become an increasingly important market for

China and its imports could rise to as much as $87 billion by 2018 from the current $60 billion.

Attract Chinese FDI

Around 18 high priority sectors have been identified for attracting Chinese FDI under the categories: Capital Goods and

Machinery, Core Infrastructure, Consumer Products, Speciality Products and Commodity Products

• For attracting Chinese FDI in the shortlisted sectors, a specific proposition for targeting key companies needs to be

developed based on an understanding of the nature of ownership and its existing manufacturing network, calling for micro-

targeting of companies

• Further detailing on sector specific actions will be required in each of these sectors through interactions with the Indian

industry.

Push for sector specific market access in China across five identified sectors

Pharmaceutical & Life

Science

• Indian Government may present a case to China for ‘fast tracking’ approvals of select

molecules by reputed Indian pharma companies

• Favorable pricing and hence lower healthcare costs for China can be emphasized

• China can set up its drug approval agency in India to fast-track approvals

FOCUS: CHINA 10

POLICY BAROMETER

Auto components and

light engineering• India should focus on select components with design capability and price

competitiveness

• Companies could target specific Chinese OEMs with interest in sourcing from India

• Indian companies can also target local Chinese auto component manufacturers within a

JV partnership and look at supplying to both the Indian market and export to China.

• The Indian government could include auto components in its Foreign Trade Policy

schemes

Media and entertainment • The two countries have signed a landmark co-production agreement and several films

are already in advanced planning stage. Film companies could invest in relationship

building in China through collaborative productions, selecting appropriate customised

content, negotiating quotas and undertaking specific marketing campaigns

IT Services • Substantial push from the Indian Government is required to get China to provide

preferred access to Indian companies in SOE (State Owned Enterprises)

• In addition, there needs to be improved awareness channels for SOEs to understand

outsourcing knowledge and business process to reduce fear of layoffs

• Indian IT companies must commit to invest in strategic initiatives in China

• Chinese ministries like MOFCOM, MIIT, and MOST must participate in partnership

initiatives taken by Indian industry bodies like NASSCOM and CII

• Movement of Indian professionals to China: There are currently lengthy approval periods

for visas (work permits). As cross-border business opportunities improve, we

recommend shorter approval timelines and longer durations for work permit. To a greater

extent, visa on arrival for Indian nationals travelling to China (and the inverse) would be

appreciated.

Tourism • China is one of the largest outbound tourist markets. India has agreed to provide Visa on

Arrival facility, and is undertaking a Visit India Year in China in 2015 to promote tourism

from China to India. Targeted marketing campaigns, partnerships with tour operators,

and cultural events are being organized. Such efforts should continue at an accelerated

pace, given the large numbers of tourists from China.

Chinese Sovereign Wealth Fund

• India should consider a sovereign-to-sovereign deal with China, inviting capital investment into long term (20+ years)

infrastructure assets in India, preferably as equity

• The return on such investment can be in Chinese currency terms, thus bypassing the US dollar risk, given that there are

several long term infrastructure investment opportunities in India

• Projects like Industrial Parks, Water Supply and Sanitation, Townships etc. could be identified

• Such a capital flow can possibly also be routed through the multilateral BRICS bank.

FOCUS: CHINA 11

POLICY BAROMETER

Set up a China Cell cum Knowledge Centre

• A specific cell within the PMO or MOCI, including government and business representatives, may be considered to direct

and monitor the achievement of targets and bilateral negotiations on key products.

• The Cell will be responsible for implementation of the outlined actions emerging from ongoing deliberations between the

Government and Core Group members

• It would disseminate information about China – opportunities, challenges, business practices, taxation issues etc.

• It may organise events which allow Indian and international executives with experience in working and dealing with Chinese

business community to share their experiences

• It would interface with the India Business Forum and the Indian Embassy in China to disseminate information about Indian

businesses and brands

• It could work on developing a program to have high quality interpreters, who are available to serve the Indian Business

Community

Drive changes in Indian manufacturingand infrastructureThe Indian manufacturing ecosystem needs to be

globally attractive for MNCs to leverage facilities

in India for exports to China. A number of policies

to strengthen the Indian business environment

are needed and the Indian Government is actively

taking these up. Besides this, specific China

related policies may also assist deeper economic

engagement.

• Establish Chinese Investment Parks, possibly

as JVs with their Industrial Park developers, as

per specific needs of Chinese investors

• Key Chinese companies can be targeted

based on nature of ownership and existing

manufacturing networks

• A special cell can be established to encourage

cooperation between the SMEs of the two countries. In this regard, CII has signed an agreement with Alibaba for enhancing

participation of Indian SME in the Chinese marketplace.

• India should enhance capabilities in Chinese language and China studies in general. Teaching of language for business

interaction, translation and interpretation, documentation, etc. can be taken up at an accelerated pace. Youth and academic

exchanges can assist in this effort.

FOCUS: CHINA 12

INDUSTRY VOICES

Mr Cyrus MistryGroup Chairman, Tata Group

Mr Satish ReddyChairman,Dr Reddy’s Laboratories Ltd

“Prime Minister Modi’s visit to China has redefined the

economic partnership of the two largest and fastest-

growing developing economies in the world. The

Prime Minister personally took up matters of interest

to industry, and as a result, sentiments on both sides

are very positive. We welcome the announcement of a

high-powered joint task force to address the issue of

trade imbalance and to expand bilateral trade and

investment. Recent policy measures and strategic

direction by the government hold the promise of

cooperation in areas including services, technology

transfer, industrial parks and railways while MOUs

signed by companies on both sides signify a new era in

our economic relationship.”

“India has made great inroads into the global pharma

market and is exporting at competitive costs to

advanced as well as developing countries, especially in

generics. However, it exported less than $30 million

worth of pharma products to China in 2014-15. Indian

pharma players need to focus more on ‘differentiated

generics’ for the Chinese market. Specific molecules

with low competitive intensity and other high priority

molecules need to be identified (eg. cancer drugs) in

China. The Indian government should continue to take

up fast-tracking of drug approvals for reputed Indian

pharma companies already meeting USFDA standards.

Chinese FDA should be invited to set up office in India to

enable faster approvals of Indian facilities. This would

help lower costs for Chinese healthcare providers and

consumers.”

FOCUS: CHINA 13

INDUSTRY VOICES

“India and China have agreed to set up two Investment Parks for Chinese

manufacturing companies setting up operations in India. This is expected to help

Indian industry, since many goods which are now being imported from China

could be expected to be produced in the country, which in turn is expected

to reduce the country’s trade deficit. Chinese companies evaluating their

investment decision in these Parks will require world class internal infrastructure.

Provision of such state-of-the-art infrastructure through private development will

be a strong first step to demonstrate India's commitment to enable China to

succeed in India.”

Mr G M RaoGroup Chairman, GMR Group

“While Indian companies are able to migrate their international contracts with

global multinationals in the Chinese market, they are slow in being able to access

the domestic market. CII has taken up issues being faced by Indian IT companies

in China, including limited internal movement of personnel and applying for

contracts with SOEs.”

Mr T K Kurien Chief Executive officer and Executive Director, Wipro Limited.

FOCUS: CHINA 14

INDUSTRY VOICES

Mr. Dhruv SawhneyChairman & Managing Director,Triveni Engineering & Industries Limited

“Capital Goods sector is a vital part of the economy contributing significantly to

manufacturing output and employment. While India may be lagging behind China in

this area, there is immense potential for growth, especially in specific high value

products with high engineering and design requirements. We need to better

understand the requirements of Chinese customers and the niches where Indian

players can serve China”.

Mr Sunil LullaExecutive Vice Chairman & Managing Director, EROS international Media Ltd.

“The Chinese film market is the second largest in the world and slated to cross the US

market by 2017. With over 23,000 screens to showcase films compared to the 4,500

screens we have available to us in India today the China market has great potential. The

few Indian films that have released there have shown great promise although the real

benchmark is what the Hollywood films have been able to achieve in that market.

However, the restrictions on number of international films that can be released in China

is a number as low as 34 including Hollywood films. We recently signed collaboration

deals with China Film Corporation, Shanghai Film Group and Fudan University, all three

Chinese state owned companies to make Indo-China co-productions, cross promote

respective films in both countries and share intellectual property. We hope to launch the

first of the films within these deals in the coming year. This joint promotion of the India-

China co production treaty of 2014, exploring collaboration on the film and television

content front and providing necessary support to Indian industry to organize industry

seminars, trade fairs and award ceremonies, in collaboration with relevant industry

bodies in China, will help the industry to access the Chinese market better.”

FOCUS: CHINA 15

INDUSTRY VOICES

S.N.SubrahmanyanMember of the Board and Sr. Executive Vice President, (Infrastructure & Construction), Larsen & Toubro Limited (Approved)

“The Indian Government has embarked on an ambitious strategy

to make railways a source of economic growth and has opened up

many areas of railway Infrastructure to FDI. In this, we seek the

partnership and expertise of other countries. We welcome the

multiple areas of cooperation outlined by the leaders of the two

countries during the recent high-level visits. These include

boosting speed on Indian tracks, setting up a railway university,

training for Indian railway personnel, and undertaking studies of

high-speed rail projects."

S. SivakumarGroup Head - Agri & IT Businesses, ITC Limited

“One of the key opportunities is export of agricultural products

from India to China. India has significantly expanded its exports of

rice, wheat & wheat flour, tobacco, sugar, meat & marine

products, and fruits & vegetables in recent times. At the same

time, China’s imports of such products from the rest of the world

have been increasing, now touching $100 billion annually. India

could well cater to the Chinese market. However, China has been

slow to accord Indian products the necessary phytosanitary

approvals and permit Indian products to enter the market.

The Chinese government should send a team to India and identify

products that it can import competitively, while according the

necessary market access permissions.”

FOCUS: CHINA 16

Source: World Integrated Trade Solution (WITS), World Bank, 2013; Asian Development Bank, Basic Statistics, 2015; China Statistical Yearbook 2014, National Bureau of Statistics, China

FACT SHEET

Table 1: Key Economic Indicators, China

GDP

Population

Technology

Nominal GDP (constant 2005) 5.27

$ Trillion 2014

Real GDP 10.36

$ Trillion 2014

GDP per capita 7,593.9

Current $ 2014

GDP Growth 7.40

% 2014

Inflation Rate 1.99

% 2013

Population 1,367.82

Million 2014

Annual Population Growth Rate 0.49

% 2009-2014

Population Density 142.53

Persons per sq. km of total surface area 2014

Cellular Subscriptions 88.71

Per 1,000 population 2013

Internet Users 45.80

Per 1,000 population 2013

Table 2: Key Trade Statistics, China

Exports

Total 2,209,000

$ Million 2013

Export Growth 7.8%

Top Partners

Imports

Total 1,949,900

$ Million 2013

Import Growth 7.2%

Top Partners

Hong Kong17%

US17%

Japan7%

Korea4%

Germany3%

Other, partners

52%

Korea10% Japan

8%

Other Asia8%

US8%

China8%

Other partners

58%

• Coal • Motor Vehicles

• Oil & Gas • Refrigerators

• Cement • Air Conditioners

• Steel • Washing Machines

• Primary Aluminum • Television sets

Key Industrial Goods

2013

FOCUS: CHINA 17

Figure 1: India's Exports to China, 10 Year Trend, $ Million

Figure 2: India's Imports from China, 10 Year Trend, $ Million

Source: Trade Figures, Ministry of Commerce & Industry, Government of India

FACT SHEET

6,759 8,322 10,871 9,354 11,618 14,169 18,077

13,535

14,824 11,936

6.6% 6.6% 6.7%

5.0%

6.5% 5.7% 5.9% 4.5% 4.7%

3.8%

23.1%30.6%

-14.0%

24.2% 22.0%27.6%

-25.1%

9.5%

-19.5%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

-

5,000

10,000

15,000

20,000

2005-6 2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

India Exports to China ($ million) Share of India's Total Exports (%)

Y-o-Y Export Growth (%)

10,868 17,475 27,146 32,497 30,824 43,480 55,314 52,248 51,035 60,410

7.3% 9.4% 10.8%

10.7%

10.7% 11.8% 11.3% 10.6% 11.3% 13.5%

60.8%55.3%

19.7%

-5.1%

41.1%

27.2%

-5.5%-2.3% 18.4%

-20.0%

0.0%

20.0%

40.0%

60.0%

80.0%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2005-6 2006-7 2007-8 2008-9 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

India Imports from China ($ million) Share of India's Total Imports (%)

Y-o-Y Import Growth (%)

Source: Trade Figures, Ministry of Commerce & Industry, Government of India

FOCUS: CHINA 18

FACT SHEET

India's Exports to China, Top 20 Commodities, 2014

India's Exports to China, Top 20 Commodities, 2014

Sr No Commodity Exports % share Y-o-Y Growth($ million) (2014) (2013-2014)

1 Cotton 2,278 19.10% -40.60%

2 Copper 1,891 15.80% 2.70%

3 Mineral fuels and oils 1,292 10.80% 26.30%

4 Organic chemicals 1,045 8.80% 13.80%

5 Salt, sulphur, lime and cement 621 5.20% -8.30%

6 Ores, slag and ash 524 4.40% -66.70%

7 Nuclear reactors, boilers, machinery, etc 500 4.20% 3.40%

8 Plastics 356 3.00% -36.10%

9 Electrical machinery and equipment 280 2.30% -7.40%

10 Animal or vegetable fats and oils 273 2.30% -7.10%

11 Inorganic chemicals 247 2.10% 116.90%

12 Feathers, artificial flowers, etc 163 1.40% -15.00%

13 Aircraft, spacecraft, etc 158 1.30% -61.60%

14 Leather and raw hides 153 1.30% 24.20%

15 Pearls, precious or semiprecious stones 148 1.20% 17.90%

16 Zinc 145 1.20% 47.30%

17 Iron & Steel 118 1.00% -63.30%

18 Fish and crustaceans 118 1.00% -37.40%

19 Oil Seeds, grains and fruit 118 1.00% 454.20%

20 Optical, photographic, medical or surgical instruments 112 0.90% -22.20%

Source: Trade Figures, Ministry of Commerce & Industry, Government of India

FOCUS: CHINA 19

FACT SHEET

India's Exports to China, Top 20 Commodities, 2014

India's Imports from China, Top 20 Commodities, 2014

Sr No Commodity Imports % share Y-o-Y Growth($ million) (2014) (2013-2014)

1 Electrical machinery and equipment 16,742 27.70% 17.70%

2 Nuclear reactors, boilers, machinery, etc 10,144 16.80% 7.30%

3 Organic chemicals 6,327 10.50% 17.30%

4 Fertilizers 3,149 5.20% 63.60%

5 Iron & Steel 2,713 4.50% 177.90%

6 Plastics 1,711 2.80% 29.50%

7 Project goods 1,452 2.40% -31.70%

8 Articles of Iron or Steel 1,392 2.30% 14.20%

9 Pearls, precious or semiprecious stones 1,229 2.00% 29.30%

10 Optical, photographic, medical or surgical instruments 1,222 2.00% 17.10%

11 Vehicles, other than railway 1,165 1.90% 17.30%

12 Ships, boats, etc 1,122 1.90% 19.20%

13 Chemical products 793 1.30% 23.80%

14 Mineral fuels and oils 778 1.30% -7.10%

15 Furniture, bedding, lamps, etc 739 1.20% 23.40%

16 Inorganic chemicals 738 1.20% 7.90%

17 Aluminum and articles 714 1.20% 31.80%

18 Ceramic products 552 0.90% 30.10%

19 Textile fabrics, Textile articles for industrial use 511 0.80% 5.70%

20 Toys, games and sports articles 412 0.70% 12.20%

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the

development of India, partnering industry, Government, and civil society, through advisory and consultative

processes.

CII is a non-government, not-for-profit, industry-led and industry-managed organization, playing a proactive role in

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T: +91-11-45771000 / 24629994-7 • F: +91-11-24626149

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CII China Office

Madhav Sharma, Chief Representative

Confederation of Indian Industry

Room No 11-A 47/49, Shanghai Mart, 2299, Yanan Road (West), Shanghai 200336

Peoples Republic of China

T: +86-21-62360969 • F: +86-21-32283510 • E: ciichinarep@cii.in