India and China today signed a key agreement to set up Chinese-run industrial parks in India, as the commerce ministers of the two countries held their first meeting since the Narendra Modi-led NDA government came to power.
On a visit to Beijing, Indi's commerce minister Nirmala Sitharaman held talks with her Chinese counterpart Gao Hucheng.
Reportedly, she underlined India's concerns over the trade gap between the neighbours, which averages over $35 billion a year in China's favour. Bilateral trade totalled $65.47 billion last year.
The two sides later signed a memorandum of understanding on 'cooperation on industrial parks in India' to facilitate more Chinese investment in India to compensate the ballooning trade deficit.
Ahead of her meeting with Gao, Sitharaman, who is part of the delegation of vice president Hamid Ansari, told the media in Beijing earlier that she will make a strong pitch for greater access for Indian goods and services into China and seek big ticket investments into the Chinese industrial parks.
India is expecting China to set up four industrial parks in different states.
According to Chinese officials, the country's current investment in India stands at $1.1 billion, mostly in Gujarat.
India is asking China to open its market to Indian information technology and pharmaceutical companies, besides stepping up investments.
She said she will press the Chinese minister to provide greater market access to Indian goods like gems, jewellery, grey cotton fabric, pharmaceuticals and IT.
"The larger backdrop with which we are working is that there is definitely a big imbalance with China," she said.
"We are importing lots more than we are exporting. The scope for Chinese to come to India to somewhat redress the imbalance to get their investments in India to set up manufacturing several goods to do some justice to redress the imbalance," she said.
"What I want to raise with the minister is that there is immense scope for Chinese investments in India both in manufacturing and other sectors in which Chinese do have an advantage whether it is infrastructure, railways. More such areas can be found where the Chinese investments can be encouraged."