"India and China set to shape economic map of the future"
This is the prediction of Indian minister, Kamal Nath. Beijing could well become New Delhi's main trading partner. India will introduce full convertibility of the rupee.
Mumbai (AsiaNews/Agencies) Trade links between India and China are growing rapidly. Meanwhile, New Delhi wants to remove all convertibility controls from the rupee to increase trade exchange and overseas investments.
"The economic potential of India will continue to grow," China's Commerce Minister, Bo Xilai, said last weekend during a conference in Mumbai. "Chinese businesses are paying attention" and they want to invest above all in the infrastructures sector, necessary for India's development. Bo, who was heading a large delegation of dozens of Chinese firms, said: "China has a lot to offer in infrastructure development to India and we can learn from India about developing software, information technology and how to improve the services sector." The largest Indian hi-tech companies, like Infosys and Satyam Computer Services, are opening new plants in China to develop research and technology. China sees India as a huge market for its products.
India has a growth rate of 8 percent, second only to China. Trade exchange between the two countries stood at 18.71 billion US dollars in 2005 (+ 38% over 2004) but Bo said this could reach 50 billion within five years.
During the meeting, the Indian Premier, Manmohan Singh, said India's internal and foreign economic standing has now "improved very much", making a reform of the currency system possible. Today, the rupee is convertible in trading only to allow enterprises to acquire goods and services. Experts do not expect the reform to be implemented before 2008. Full convertibility of the currency would allow for greater integration with the global economy with an increment of overseas investments, but the move is resisted by conservative and right-wing Nationalist elements.
"China could well be our largest trading partner in a year or two," Commerce Minister Kamal Nath said. This would mean surpassing the United States with which there was trade exchange worth 25 billion in 2005. "India and China are going to shape the new economic architecture of the future," he added, especially if they lay down regional trade agreements that are open to other states. The countries have a joint population of 2.4 billion inhabitants, around 40% of the global population. The two giants have much to gain from collaboration to procure raw materials and energy sources (China and India import 70% and 40% respectively of the oil they consume), thus putting an end to competition damaging to both. The countries have declared 2006 as the "Year of Sino-Indian friendship".
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