In Beijing, India and China signed 24 agreements covering issues such as skill development, trade, environmental concerns and tourism, while in Shanghai, deals worth $22 billion were signed between the two countries. Akshay Mathur, head of research at Gateway House, comments on the deals signed.
“The agreements with Chinese financial institutions indicate how eager China is to invest in India. The focus of discussions was clearly on infrastructure. The foreign direct investment in industrial parks can balance India’s current account deficit with China. On the other hand, the other agreements on financing imports of Chinese products is likely to further India’s trade deficit with China, even as it plugs the need for affordable technologies in India.
Equally, significant is the interaction of Prime Minister Modi with the internet and telecom companies in China. The presence of Alibaba, Huawei and Xiaomi, and Flipkart and Snapdeal indicates the critical role e-commerce is likely to play in the future between the two countries. It also indicates a growing global role of Chinese services companies, a space traditionally known to be mastered by India.
Other issues of geoeconomic significance such as the collaboration in Asian Investment Infrastructure Bank (AIIB), China’s One Belt, One Road (OBOR) vision, Asia Pacific Economic Conference (APEC) received positive but surprisingly thin attention. The Bangladesh-China-India-Myanmar (BCIM) corridor was raised by the Chinese leadership more fervently probably because China is seeking to include the corridor into China’s OBOR vision in the near future. The agreement for jointly developing the Gujarat International Finance Tec (GIFT) city may bring in China’s expertise in developing the location as an international financial centre, just as China has done in developing Pudong financial district in Shanghai.”
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Gateway House: Indian Council on Global Relations
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.