It is a great pleasure to join you all this morning at the China International Auto Parts Expo, where India is participating this year as the partner country. I welcome everybody present and am confident that the India Show that we are organizing today will attract considerable attention.
2. Economic cooperation between India and China in the last decade has been a remarkable story. From very modest beginnings, China has become India’s largest trade partner and India is China’s seventh largest export destination. Trade last year was USD 74 billion and steadily growing. While this is heartening, it has posed its own challenges in terms of a deficit last year of USD 27 billion,which is difficult to sustain or to defend. Market access for Indian companies is a major concern and that is precisely why it is important that so many of them are here today.
3. If India is to expand its exports to China, much of that responsibility falls on our manufacturers, particularly the engineering industry. The auto components sector is one of the most competitive segments of Indian engineering. Last year, the industry was valued at USD 30billion and is growing at 20% annually. I understand that 15% of its output is exported and there is clearly scope for improvement. The presence of India at CIAPE as a partner country is, of course, a recognition that China is today the number one auto market in the world. But it is equally a reflection of a more aggressive Indian approach towards the China market, particularly in manufacturing. This has the strong support of the Indian Government.
4. Sino-Indian economic relations are now maturing, moving from trade to investments. A number of Chinese auto manufacturers are contemplating projects in India. Their success in such a competitive market depends on strong relationships with suppliers of components. Contacts with Indian companies would be greatly helpful in getting this going. In the other direction, we are seeing more Indian investors take the plunge in China. I hope that some of our major auto parts companies would also think in those terms once their relationships with Chinese auto producers start developing.
5. Impressive though its growth is, India-China economic relations is an under-leveraged one. We offer each other so many opportunities for mutual development. Creating an enabling environment to take advantage of them is our endeavor. At the recent meeting of our trade ministers, they agreed that we need to develop a joint strategy in this regard. Today’s event is an evidence of that shared determination. I wish you all a very productive seminar andstay in Beijing.