Indian corporates post positive growth in China operations

09 May 2003

Mumbai: China has emerged as a priority market for India Inc with corporates like Reliance Industries, Tata Iron and Steel, Videocon International, Essel Propack, Ranbaxy, Dr Reddy's, Ispat Industries and NIIT reporting positive growth in their China operations.

Other companies like the Aditya Birla group, Essel Propack, State Bank of India and Tata Consultancy Services (TCS) have set up their own base either through joint ventures or by setting up 100 per cent subsidiaries. "We are in the final stage of bagging the prestigious Shanghai Stock Exchange order along with global majors like Hewlett-Packard and IBM," says a senior TCS official.

Compared to India, China offers around 14-16 per cent less indirect taxes, 4-6 per cent more manufacturing margins, 2-5 per cent more labour productivity and 3-4 per cent more cost of productivity.

India Inc had adopted a three pronged strategy — exporting to China, sourcing from China and setting up base to cater to the Chines market — to tap the over Rs 10,000-crore Chinese market, and is now slowly expanding its network in that country.

The Confederation of Indian Industry (CII) is planning to get Indian companies to form a Shanghai Club to promote the India brand. Says CII president Anand Mahindra: "CII figures show that bilateral trade between the two countries has grown more than 10-fold in the past decade to $4,945 billion in 2002 from $338.5 million in 1992. These trade figures give us an idea of how opportunity has grown and we have decided to set up a full-fledged office in China to support the activities of the Indian companies there."