Will Bank of China make a grand India foray? Expectations from Xi Jinping's India visit

New Delhi: China is expected to commit investments worth $6.5 billion to set up industrial parks in India and sign purchase agreements of over $3 billion with domestic companies during the visit of Chinese President Xi Jinping beginning today.

Besides, about 16 documents are likely to be signed in areas such as trade and economic development, drug administration and cooperation, an official said.

The Chinese President visit would start his three-day official visit from Ahmedabad tomorrow.

China has proposed to set up an automobile industrial park in Maharashtra and a power transmission park in Gujarat. The Chinese companies are expected to invest about $6.5 billion for development of these parks, the official said.

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According to a report in The Times of India, the industrial parks may pave way for Bank of China’s India entry as Chinese banks are likely to finance the projects.

The report also said that Modi will be willing to rope in Chinese companies to solve the problems plaguing the water sector in the country. India desperately needs private sector investment in irrigation and drinking water sector where there is a crisis emerging with erratic rains resulting in extreme water scarcity.

During the visit, about two dozen Chinese companies are likely to sign purchasing agreements with Indian firms to buy products such as copper cathode, sea food, cotton yarn, industrial salt and polypropylene.

These investments and purchase agreements will help India narrow the ballooning trade deficit with China which has reached about $35 billion in 2013-14.

Further in railways sector, the Chinese companies may also ink pacts in development of 650 km rail track for high speed train in Karanatka.

The bilateral trade between the countries stood at $65.85 billion in 2013-14. China has invested only $410 million during April 2000 and June 2014.

However, experts have also raised questions as to whether Modi will be able to issue of increasing Chinese imports into India, which is resulting in a widening of trade deficit with the country.

With inputs PTI