Sunday, April 16 2006 14:45 Hrs (IST) - World Time -

Beijing: A high-level FICCI CEOs' delegation is here to open up a track II diplomacy to help diversify India's export basket to China and identify niche areas,crucial for the sustainable long-term growth of bilateral trade which touched a record US$ 18.7 billion last year.

"The broad intent of the visit is to open up a second track diplomacy that would enable India to diversify its exports to China as well as to find the niche areas at a time when China is opening up more to the outside world," Secretary General of the Federation of Indian Chamber of Commerce and Industry (FICCI) Amit Mitra said.

The delegation, led by FICCI President Saroj Kumar Poddar, arrived here today and will have bilateral meetings with its Chinese counterpart, the China Council for the Promotion of International Trade (CCPIT) tomorrow on how to sustain the impressive growth in India-China trade and identify new areas of cooperation in the manufacturing sector, Mitra told Indian journalists here.

India-China bilateral trade has shown remarkable growth in recent years and according to Chinese customs statistics, two-way trade during January-December last year surged to US$ 18.7 billion, up 38 per cent over that of 2004.

The average monthly trade during 2005 was in excess of US$ 1.5 billion and if the high growth could be sustained,India-China bilateral trade could soon overtake Indo-US trade, which is hovering around US$ 30 billion.

At the same time, the composition of bilateral trade is a cause of some anxiety for India, Mitra said, pointing out that iron ore exports constituted nearly 60 per cent of thecountry's total exports to China.

While India's exports to China are largely restricted to primary and resource based products, Chinese exports to India are fairly diversified and include resource based products,manufactured items as well a low and medium technology products.

"It can therefore be safely concluded that if we are toattain the planned target of US$ 30 billion of trade by 2009, India would have to identify new products and diversify its exports to China," the FICCI said in a background note.

Also, the relative shares of the two countries in each other's global trade continues to remain miniscule.

Whereas China accounts for just about 4.5 per cent of India's total world trade, India's rank in the total Chinese trade is even more insignificant, with the share being just around one per cent.

Thus, Mitra stressed that the CEOs' delegation, which includes Chairman of Modi Enterprises, K K Modi; Chairman of SPIC Limited, A C Muthiah; Chairman of K G Denim Limited, K G Baalakrishnan; and Managing Director of Nucleus Software Exports Ltd, Vishnu Dusad, would be exploring business opportunities to expand their footprints into China as well.

During its three-city tour of Beijing, Xi'an and Shanghai, the FICCI delegation would be having in-depth exchange of views with their Chinese counterparts and try and understand the complex working of the Chinese economy, Mitra said.

The FICCI delegation would also have a closer interaction with Chinese private enterprises, which are increasingly playing a more important role in propelling near double-digit economic growth in the world's most populous nation.