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Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Shaming of Tamils by Tamil farmers at Delhi Adharma of opposition politics L&T: focus on infrastructure and more infrastructure… A proud Madrasi Music happens Permanent secretariat for TN GIM Tribute – M V Murugappan Road development slows down Multi-faceted Venkat Delhi returns to BJP A professional at the helm of IRDA... A rich pool of talent not utilised…. Whistle-Stop Tour of Raghuram Rajan How Air-India loses customs... Don’t seem to feel the pulse… TN accounts for the largest recruits by the IT sector The ‘Jayanthi Tax.’ Tough task taking states together Rahman at CIC Padma Bhushan for A Ramakrishna Recognition to role of NBFCs.... Why land prices zoom in TN? Naidu will soon build a new Hyderabad There was flood of milk. Reason: no milk commissioner! Wise Presidents R Sridhar steps down as CEO of Shriram Capital IPL - no surprise this scam Infrastructure funding – lessons learnt Tribute – Manikam Ramaswami Airlines in India: cost and space Tribute – UCAL Selvan… A glass full of corruption An inexplicable neglect For whom the MIDS bell tolls? Return to king coal for urea... TN – agglomerate land holdings without alienating ownership WTO Meet: resolved to meet again Quality education through the PPP mode No Maha Koottani in TN... Gas is the way forward TELANGANA at last…BUT The star of Spencers is no more Land reclamation from sea appears cheaper! Odisha: spectacular win by Naveen Patnaik Solar, solar everywhere … CSR and CMI: promise of another Srinivasan Ramanujan... Telangana in top gear… More Shakti to resource mobilisation... New IT products of Ramco in the pipeline… F C Kohli - his concerns all embracing More heat than light Pharma – overdose of copying This scant respect for Law Fortune 500 review Kulandai was a giant West Bengal: mindless malignancy Where a state respects its litterateurs… PPP mode for upgrading Corporation Hospitals Towards speedy justice B H Kothari - a tribute Mu Sigma – is no more Five star activism stalls development activity The few handicaps... Russi Mody – a tribute Nuclear power at the nucleus Eternal support for capitalisation of PS banks Fuel for thought Wanted: a second airport for Chennai The power-full Hindujas Which side are you, Montek? Dr C Rangarajan returns to Chennai He continues the focus on social amelioration Measuring roof tops in terms of KW/MW S V Raju – a ‘good’ true liberal Solar thermal shines… Shipping woes of Chennai companies Computation of GDP – conundrums continue A friendly business group Remembering Indira Sivasailam... 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China invests in India

Two of our leaders, Prime Minister Narendra Modi and Andhra Pradesh Chief Minister Chandrababu Naidu, recently visited China. Both attempted to impress the Chinese policymakers and business leaders to expand their investments in India. In Modi’s visit MoUs were signed for around $ 22 billion of investments that included large corporations like Bharti Airtel, the Adani group, Wipro BPS and Jindal Steel and Power.

In the telecom area, Alibaba is reported to be interested in investing in Micromax. There were also expectations on Chinese investing in the Indian Railways. I believe a large scope for drawing on the rich expertise built by the Chinese in constructing high speed rail tracks capable of speeds in the region of 400 kmph. This will be of special value to the golden quadrilateral for railways planned by the NDA II government.

A rather disturbing trend in the two way trade between the two countries is the adverse balance in favour of China. In a volume of $ 70 billion of trade, imports from China amount to around $ 55 billion and exports from India at just around $ 15 billion. This is on the pattern of such imbalance witnessed in the trade of China with US; the huge surpluses generated have been utilised for making massive Chinese investments in US companies and assets.

In the bilateral trade one witnesses steep increase in imports of goods of low technology that have been traditionally manufactured for decades by Indian enterprises, especially in the small sector. In the earlier phase, competition from China affected exports of a vast range of goods from India from this sector like textiles and garments. But today such products are making deep inroads into Indian markets on the strength of their much lower prices. These range from cheap Ganesha idols to fire crackers to glass, ceramic tiles, electrical and electronic goods.

Many state social welfare schemes provided to ameliorate the lot of the poor and weaker sections involving thousands of crores of rupees, sadly, do not go to the benefit of hundreds of small units. Tamil Nadu government provides a few thousand crores of rupees worth fans, mixies, grinders…. to the weaker sections and laptops to students through liberal budget support. Small scale manufacturers of these equipment, who tendered for supplies find it cheaper to import these from China rather than produce these in their factories. The result is the lack of accountability. Such equipment are not covered by any warranty and do not perform well. Cost of repairing these are also high and such a beneficial scheme to the weaker sections seems to benefit only the manufacturers of cheap goods in China.

Gradually such damage is also creeping into better organised segments like the manufacture of ceramic tiles. Gujarat made excellent use of gas as the fuel for such manufacture. In a matter of a decade the entire Rajkot district and its environs emerged as a strong centre for ceramic tiles. In recent times, these have been accounting for a lion’s share in the market for tiles. Today under World Trade Organisation (WTO) rules there is easy entry and Chinese have made deep inroads into this market. Similar is the experience of the once flourishing manufacturers of clocks in Gujarat.

To save hundreds of small units and employment of several lakhs, it is urgently necessary to tackle this issue. Think tanks should work on schemes of intelligent non-tariff barriers.

There is not much scope for expanding Indian exports of sophisticated, value-added products to China. IE has been suggesting India to focus on export of agricultural products that are in huge demand in that country. China imports millions of tonnes of soya from far away Latin American countries. India can try to get a share of this by leveraging its advantages of large arable land and of farming feasible round the year in most parts of the country. But this needs strong policy changes that would permit contract farming and corporate farming over large areas. With agriculture as a state subject, such a change is possible only by building consensus across the vast political spectrum.

As BJP is in power in several large states like Madhya Pradesh, Rajasthan, Chhattisgarh, Gujarat and Maharashtra and with the business-savvy Chandrababu Naidu as a strong ally such a change can be attempted at least in these states.

 

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