December 1st, 2011
10:05 AM GMT
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Editor's note: "Along the Silk Road" is a weekly segment on Global Exchange, that will explore the burgeoning trade and investment links from the Middle East to Asia. Watch Global Exchange, on CNN International, Sunday to Thursday 1100 ET, 1600 GMT and 1700 CET.

Gujarat, India (CNN) –  A prolonged economic slump in the West has prompted India to broaden its economic ties and look east - to China.

Indian exports to China jumped nearly 70% last year, according to an Indian research report. It was partly on account of a loosening of export controls to keep prices afloat, but also a sign that China is becoming an increasingly important export market.

Rajiv Kumar is secretary general of the Federation of Indian Chambers of Commerce and Industry (FICCI). He said: “With the sluggishness in the American and European market, I think it was bound to happen, and I can see within FICCI there is opportunity.

“When a Chinese delegation comes there is greater participation and all of this is a sign that the Indian industry is getting more interested towards the Chinese future.”

China is India's largest trading partner, but trade between the two countries is imbalanced. India's imports from China are worth roughly $40 billion, while its exports are worth around half of that.

While some Chinese imports help these street vendors in India make money, not everyone is happy.

“I'm not pleased at all. It's like someone's taking away your bread and butter,” said Vinit Dalal of Dalal Machine Tools Agency.

Dalal sells used metal forging equipment in India. Now, he says, China is selling brand new equipment in India for the same price. As a result, his sales are slowing down.

“If someone is getting a brand new manufactured machine at the same price as I am supplying a used one, of course he's going to go for the new, with a two-year warranty and everything - so that's the problem,” said Dalal.

FICCI says such imbalanced trade between India and China cannot continue.

“The way it can improve is to facilitate Chinese investment into India and to export from those firms back to China and having a lot more joint ventures in India with Chinese firms, which can create those capacities from which we can export back to China,” said Kumar.



soundoff (21 Responses)
  1. davidmd

    typical CNN lies, india is much cheaper place than china, there is nothing in india is more expensive than in china, and why indians have to buy more from china all because they themselves cant make any of them

    December 1, 2011 at 12:16 pm |
  2. lagrange

    indian's salary is much lower, they still complain about they can not compete?

    December 1, 2011 at 12:50 pm |
  3. raika45

    The Chinese are the most shrewd businessmen in the world as America and Europe have found out.There is no way India can get a leg up over China.The Chinese will keep on draining precious foreign exchange from India.India has no guts to stand up against China for a better trade relation.

    December 1, 2011 at 12:51 pm |
  4. Joe

    CNN and USA always back the wrong horse. India can never be a counter weight to China. Try as you might, you cannot succeed. The reason China succeeds is to do with the stuff in their heads and to do with their instinct for unity. See if you can get that round your head CNN. I doubt it.

    December 1, 2011 at 1:42 pm |
  5. EA Marco Polo

    “The way it can improve is to facilitate Chinese investment into India and to export from those firms back to China
    --------

    What statue in China is most popular? The answer is – who lived in Indian peninsula – Buddha. Buddhism is restored in Mainland China. In my opinion, this article is good, balanced and has right suggestion; after India has better infrastructure, it is quite possible.

    ROC Taiwan (future society of Mainland China) has big investment on Vietnam and Thailand. The wage is rising fast on whole of China (Mainland China + ROC Taiwan + Hong Kong). In the future some factories from China move to India could be a good idea.

    In 2019 India's GDP must surpass the UK and Italy, (EU's crisis might let it to be earlier); in 2029 India's GDP must surpass Germany. Cooperation and friendship between India and China could be upgraded certainly.

    December 1, 2011 at 2:23 pm |
  6. LionOfNarnia

    We just need to move Western factories to India. Solves both problems and leaves China in the cold - where they belong.

    December 1, 2011 at 3:16 pm |
  7. LionOfNarnia

    Chinese aren't "shrewd businessmen." They know nothing of business. They are mindless sociopaths who break the backs of their own people to sabotage the West.

    December 1, 2011 at 3:32 pm |
  8. LionOfNarnia

    Business is inventions. China's business is what? Making people live 10 to a 1 bedroom apartment for enough money to eat and that's all. That's not business. That's slavery.

    December 1, 2011 at 3:34 pm |
  9. MacMohan

    As an Indian, I must say that India despite having much potential will not and possibly cannot match China in its aggression, growth or power like China has in these last few years and will in the upcoming century. A country like India cannot reach its full potential under democracy. A socialist/communist government will be needed to implement strict rules and regulations to power through growth, infrastructure and financial system and get rid of corruption and red tape bureaucracy !

    December 1, 2011 at 4:38 pm |
  10. chinese imposter

    Guess who?

    December 1, 2011 at 4:54 pm |
  11. @lionofnarnia

    QUIT TROLLING YOU SINO HATER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    December 1, 2011 at 6:43 pm |
  12. Beerbarrel

    @Lionofnarnia: You are so pathetic. Hating China and begging for western factories to come to India is not going to make it happen. If Indians like yourself spend less time hating, and spend more time trying to make things work in India, then only will India stand a chance to progress and develop.

    December 1, 2011 at 10:54 pm |
  13. lionofnarnia

    Im an american who hates the current china regime. There are many of us.

    December 1, 2011 at 11:06 pm |
  14. lionofnarnia

    Why should america trade with our worst enemy?

    December 1, 2011 at 11:07 pm |
  15. Godmade

    lionofnarnia..SHAME ON YOU..Go out and hug someone..especially your enemy. Otherwise we will send you to the moon. You don't belong to here. Bye now!

    December 2, 2011 at 1:49 am |
  16. Eagle

    The US and China finally engaged in war. US took Shanghai. Have a look – http://battleofhouston.blogspot.com/

    December 2, 2011 at 2:34 am |
  17. Mohak

    We cant be like china,we are democracy .China's model of growth is unstable and its going to end up like USSR.
    People are comparing us with china only coz we have such growth fig. and a middle class(as a common man i can see the change around me in last one decade) that is expanding.Our growth is stable and it will take its time but we will definitely overcome china.USA dont need to worry about china ,they are more smoke than fire.

    December 2, 2011 at 9:24 am |
  18. Mohak

    and one thing more we dont make cheap things (with no guarantee) like china.

    December 2, 2011 at 9:30 am |
  19. KashurKot

    China is way ahead of other countries china has defeated global crisis.. http://www.kashmirsouq.com

    December 2, 2011 at 10:58 am |
  20. hkmp

    @davidmd..who told u that india is a cheap place dan china??..go check urself..we make the same goods dat the chinese makes but is more costlier dan their products, thats why their goods are selling more..and dont compare India's intellect with china..dont forget chinese and indian civilizations was 2 of the oldest and wealthier in the world..these 2 share many things with each other..Indians devoloped the number zero, trigonometry, calculus etc..Buddhism transferred from India to China..and an Indian monk was one of the inventors of shaolin kingfu...

    December 19, 2011 at 5:02 pm |
  21. bubble

    This webpage has been put into my own favorites. I can't wait to read even more about this topic.

    January 31, 2012 at 5:43 pm |

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