HONG KONG – In an effort to attract increased foreign funding for the country’s 12th five-year plan, India is stepping up efforts to court investors from Hong Kong and mainland China.
India’s 12th five-year plan outlines more than US$1 trillion in infrastructure investments that will aim to increase the country’s economic competitiveness between 2012 and 2017. While the majority of funds will come from the Indian government, roughly 47 percent is being sought from private investors.
In February, China submitted a substantial five-year trade and economic planning cooperation proposal to the Indian government, offering to finance as much as 30 percent of the US$1 trillion targeted investment in infrastructure outlined in India’s five-year plan. Following the submission of this proposal, China’s interest in investing in India’s economic future was further consolidated during the third round of the China-India joint Strategic Economic Dialogue held last month.
“The Chinese are extremely keen to participate in roads, power and telecom [in India],” said Sanjeet Singh, director at India’s Ministry of Commerce and Industry.
“The government of China has announced China will invest over US$500 billion in the next five years in overseas destinations. We hope they will look at India as one such destination where infrastructure is a prime sector,” Singh continued.
According to Singh, roughly 30 percent of existing funds for India’s five-year plan are currently earmarked for the development of energy infrastructure, followed by 25 percent for telecommunications, 10 percent for roads and 15 percent for railways.
Singh’s comments coincide with the “India Show” held this week in Hong Kong, organized by the Confederation of Indian Industry (CII), Ministry of Commerce and Industry and Indian Consulate in Hong Kong with the support of the Indian Chamber of Commerce Hong Kong.
Focused on showcasing opportunities for Investment in India while highlighting potential areas for the improvement of trade ties between the two jurisdictions, the India Show attracted more than 100 delegates who attended three days of presentations by senior officials from the Indian Ministry of Commerce.
Simultaneous with the India Show is the Hong Kong Spring Fair 2014 – Asia’s largest with over 2,700 booths featuring suppliers and products from more than 114 countries. India’s presence at the Spring Fair this year was its largest yet, featuring more than 150 Indian companies and delegations with over 200 representatives of Indian industry, government, art and culture.
India is not the only one courting investors, however. As a trade and financial services hub for mainland China and Southeast Asia, Hong Kong is eager to attract increased Indian FDI and holding companies from investors and companies seeking to access the wider region.
“We want Indian companies to come to Hong Kong. They can trade in China through us and promote their products in ASEAN countries,” said Dannie Chiu, regional director for Southeast Asia and India at the Hong Kong Trade and Development Council.
“A number of manufacturing units are trying to relocate from China to the ASEAN region. That is why we are setting up an office in Indonesia [and] looking at relocating some of these units to India. Not just jewelry, but rice, sea food, fresh produce and textiles have great potential for trade in Hong Kong,” she continued.
With more than 1,500 Indian companies registered in Hong Kong at the end of 2013 in the finance, banking, services, transportation, IT and telecommunications industries, India’s economic relationship with Hong Kong has strengthened considerably in recent years.
Hong Kong exports to India grew 6.1 percent in the January to September period of 2013, totaling US$8.087 billion, while total bilateral trade with India during the same period totaled US$16.878 billion, a 6.9 percent increase.
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