Narendra Modi will be in China from 14-16 May, 2015. He will visit the cities of Xi’an, Beijing and Shanghai where he will attend bilateral, cultural and business meetings. Akshay Mathur, head of research at Gateway House, comments on the expected points of discussion during the visit.
Statement:
“China is primarily vested in U.S. treasury bills, and is looking for viable investment alternatives that offer a higher return. India must seek investments in infrastructure, particularly in smart cities. This is a good opportunity to lock in foreign investments to partially mitigate the trade deficit.
India is likely to push for greater market access for IT services and pharmaceuticals. While China views India’s IT services as competition, they may ease regulations for pharmaceuticals sooner due to the increasing cost of healthcare in the country. Indian medicines already hold high regard amongst the Chinese.
Prime Minister Modi’s visit to Shanghai will be of particular interest. There is a sister-city agreement between Mumbai and Shanghai, the financial centers of both countries. However, there has not been much progress yet in activating exchanges to develop financial linkages or cooperate on urban planning. The visit presents an opportunity to take the initiative further.
On the multilateral front, Modi must negotiate and cement an influential management role in the Asian Investment Infrastructure Bank (AIIB), which is expected to come into being by the end of 2015. India’s goal should be to become the second-largest shareholder with a corresponding voting share at the AIIB.
On regional geopolitics, China is likely to press India to participate in the grand One Belt, One Road project that encompasses the road and maritime-based silk routes through Asia and beyond. Modi is visiting Xi’an, which is the capital city of President Xi Jinping’s ancestral province and a historic town that served as the hub for the ancient silk road. Subscribing to China’s current unilateral geoeconomic and geopolitical vision for the One Belt, One Road project is going to be difficult for India; for instance, the inclusion of the Pakistan-China Economic Corridor in the project is a sensitive security and political issue. However, for the long-term, India must offer to co-design the vision with China so that the initiative becomes truly collaborative and multilateral, and the benefits are clearly mutual.”
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Gateway House: Indian Council on Global Relations is a foreign policy think tank in Mumbai, India, established to engage India’s leading corporations and individuals in debate and scholarship on India’s foreign policy and the nation’s role in global affairs. Gateway House is independent, non-partisan and membership-based.