ibnlive » Business

Nov 14, 2006 at 08:45pm IST

India wants $50 bn Chinese investment

New Delhi: The trade between India and China is gliding nicely ever since the thaw of 2003 and is expected to cross $20 billion, double the target set for 2005.

The trade flow is hugely in favour of China, but India is taking the deficit in its stride, and on the soaring wings of optimism has set an ambition of $50 billion for 2010.

But it is not just the border, even Chinese investments are getting quite contentious. Huawei Technologies, a Shenzen based company, for instance, has been quite a draw within private Indian telecom equipment buyers with its fetching combination of quality and affordable pricing.

Another Chinese firm, ZTE was also disqualified. And earlier this year Hutchison Port Holdings, failed in its bid to set up container terminals at three Indian ports after a Cabinet bar on security grounds, though it another group company, Hutch Essar, is a large telecom players.

Two other Chinese companies also failed to secure port contracts for the same reason.

Minister of State Commerce and Industry Ashwani Kumar says, “It is only when issues of security are raised that the Government will take a closer look, but I would say that there is no question of discriminating on principle against investment from Chinese companies.”

More than a hundred Indian companies are currently operating in China, and they are treated like any other. Indian investment in China currently at $130 million exceeds Chinese investments in India, which the Chinese put at $47 million.

The National Security Council regards investments from countries, traditionally inimical to India's interests as a security hazard and would like them to be subject to special scrutiny.

The proposed national security exception act is supposed to enable this.

The Government says the scrutiny is not country – but firm specific, but the Chinese are not convinced.