India moves to set up industrial parks with China

NEW DELHI Wed Jun 25, 2014 10:35pm IST

Law Minister Ravi Shankar Prasad, pauses during a news conference in New Delhi June 17, 2014. REUTERS/Anindito Mukherjee

Law Minister Ravi Shankar Prasad, pauses during a news conference in New Delhi June 17, 2014.

Credit: Reuters/Anindito Mukherjee

Related Topics

NEW DELHI (Reuters) - India has moved a step closer to establishing industrial parks with China, the law minister said on Wednesday, as New Delhi looks to rebalance a $40 billion trade deficit with its northern neighbour.

Ravi Shankar Prasad told reporters that India's cabinet had approved in principle a memorandum of understanding between the two countries for setting up the parks.

The details of the agreement would be available only after the memorandum was signed, Prasad said, but the expectation is that China will invest in low-tax special economic zones and manufacturing hubs in India, which would reduce the need for India to import Chinese goods.

While New Delhi has long pushed for greater market access to cut the deficit, pushing through a firm agreement to bring Chinese investment into India would signal the intent of new Prime Minister Narendra Modi's push to expand manufacturing and revive the country's flagging economy.

Earlier this month China's Foreign Minister Wang Yi met his counterpart Sushma Swaraj in New Delhi and raised the possibility of China investing in industrial parks in India.

Previous efforts to set up the parks have stalled, partly because of Indian security concerns about Chinese companies setting up factories inside the country.

While China and other developing countries have capitalised on relatively cheap labour to expand rapidly their manufacturing base over the past two decades, manufacturing in India accounts for just 15 percent of economic output.

China's own embrace of an export-led model has helped its economy outgrow India's fourfold since 1980.

(Editing by Alison Williams)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

India-Nepal Ties

REUTERS SHOWCASE

Facebook Results

Facebook Results

Facebook beats Wall Street targets, stock hits record high  Full Article 

Gm Recall

Gm Recall

GM recalls 717,950 vehicles in U.S., not for ignition switches  Full Article 

Factory Sector

Factory Sector

China July HSBC flash PMI at 18-month high of 52.0   Full Article 

Breakingviews

Breakingviews

Apple winds up earnings hope for new gadgets  Full Article 

BRICS Bank

BRICS Bank

World Bank chief welcomes new BRICS development bank.  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 

Honda's India Thrust

Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

 Boosting Output

Boosting Output

NMDC plans to boost iron ore output by two-thirds  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage