Chinese FDI in India set to touch $30 bn by 2025: study
15 Jul 2014
Chinese investment in India could touch $30 billion by 2025, says a new book released on Monday.
"We deem it entirely possible that, by 2025, the stock of Chinese foreign direct investment (FDI) in India could be $30 billion, and if Chinese industrial clusters come to be established (in India), even larger,'' says the book, titled The Silk Road Discovered.
It is co-authored by Singapore-based businessman Girija Pande, the Washington DC-based research consultancy China India Institute chairman Anil K Gupta, and the institute's managing partner Haiyan Wang.
''This projection refers only to equity ownership of 10 per cent or more in an India-based company. It does not include loans or minority stakes," said the authors.
The book notes that both Chinese and Indian companies have entered into each other's markets through third-party business acquisitions.
The book was launched by Arnoud De Meyer, president of the Singapore Management University, today.
"We are forecasting nearly $25 billion Chinese investment into India in the next five to seven years.
"The Chinese investment into India will help build up infrastructure and export manufacturing," Pande told PTI during the book launch.
He highlighted the increasing trade between China and India, citing among others Reliance Power's plant order of $8 billion signed with Shanghai Electric in 2010, perhaps the largest cross-border deal ever signed in the power sector worldwide.
Pande estimates India has placed about $10 billion worth of power plant orders with Chinese manufacturers.
He is executive chairman of the investment-based Apex Avalon Consultancy in Singapore and former chairman of Tata Consultancy Services in Asia Pacific.
Going forward, the Chinese must manufacture these plants, among others, in India, and be close to the market, said Pande.
He said the next step will be to get the Chinese manufacturers to set up shop in India, pointing out that the country is already relocating its low-end manufacturing to the South East Asian countries while focusing on high-end production.
Pande said India needs to set up export-oriented manufacturing and utilise the opportunity to work with the Chinese major manufacturers, taking over component, parts and semi-finished product making contracts.
He expressed confidence that the Indian manufacturing link-up with Chinese production houses could significantly help balance the current trade deficit between the two countries.
