China likely to commit over $5 billion investment in India soon

NEW DELHI: Agreements for Chinese investments worth $5 billion to set up industrial parks in India and a few purchasing pacts of about $700 million with domestic companies are expected to be inked during Chinese President Xi Jinping's visit later this month.

Besides, some important agreements are also likely to be signed in sectors such as railways, infrastructure and aviation, an official said.

The Chinese president is scheduled to visit India on September 17. He will start his three-day official tour from Ahmedabad.

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"China has proposed setting up industrial parks in Gujarat and Maharashtra. One park is likely to manufacture high-end electronic goods. Chinese companies are expected to invest about $5 billion for these parks," the official said.

During the visit, about two dozen Chinese companies are likely to sign purchasing agreements with Indian firms to buy products such as copper cathode, sea food, cotton yarn, industrial salt and polypropylene.

These investments and purchase agreements will help India in narrowing the ballooning trade deficit with China which has reached about $35 billion in 2013-14.

India is also asking for greater market access for products including tobacco, oil cakes, oil seeds, bovine meat, agricultural and pharmaceuticals.

"India wants to sell fruits and vegetables like okra, mangoes, grapes, capsicum, cucumber, cabbage, brinjal, bitter gourd, papaya, guava and beans. India has also demanded duty reduction in cotton, cotton yarn and handmade carpets," the official said.

Commerce minister Nirmala Sitharaman shake hands with her Chinese counterpart Gao Huchengm in Beijing

These issues were discussed during the recent visit of commerce and industry minister Nirmala Sitharaman to China.

"China has also accepted that the trade deficit is not sustainable. They would do pest risk analysis for Indian fruits and vegetables. India has asked China to expedite the process," the official added.

The bilateral trade between the countries stood at $65.85 billion in 2013-14. China has invested only $410 million during April 2000 and June 2014.

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