December 1st, 2011
10:05 AM GMT
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.
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