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Govt gives in-principle approval for Chinese industrial parks

26 Jun 2014 Evaluate

The government has given an in-principle approval to a memorandum of understanding (MoU) allowing China to set up industrial parks in the country. The industrial parks are expected to include special economic zones (SEZs) and manufacturing zones. Uttar Pradesh, Haryana and Andhra Pradesh are possible states where the parks could come up. The move came ahead of the five-day visit of Vice-President Hamid Ansari to China from June 26.

China had already established five industrial parks in ASEAN countries like Vietnam, Cambodia and Indonesia and is keen to set up similar industrial parks in India. The move is likely to enhance the Chinese investment in the country. The government wants to make India a manufacturing hub like China. Since 1991 when India opened up its economy, the investment from China remained sluggish at mere $469 million till now as compared to $16-17 billion from Japan.

The bilateral trade between China and India declined from around $75 billion in 2011 to $65.45 billion in 2013. Furthermore, India has huge trade deficit with China at average around $35 billion. During FY 14, India imported goods worth $51 billion from China, and exported goods worth $14.86 billion back to China. Both the countries have set $100 billion target by 2015. However, India had already asked the Chinese government to provide more access to the market so that the target of $100 billion can be achieved in a more balanced manner. Better access of Chinese markets to domestic IT-enabled services, cotton textiles, home furnishings and pharmaceuticals could help India to reduce the imbalance in trade.

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