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Protest masters... Bihar – Nitish Kumar adopts the Lalu model Plummeting profits of PSBs Editor's Notes Fall in crude prices help in oil sector reform ONGC at KG Basin Gay abandon in pricing All eyes on Sankara Nethralaya EVM is tamper-proof The few handicaps... Tax agriculture Telangana in top gear… Five star activism stalls development activity Polls and promises Towards speedy justice Scientists urged to take up farmer-oriented research Small units prefers to remain small... Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated Airlines in India: cost and space Shanti and Sadhana through Music Quality silica from Neyveli Naidu’s return augurs well for Seemandhra Shipping woes of Chennai companies Sri Lanka votes for change Fortune 500 review Why land prices zoom in TN? Fuel for thought The power-full Hindujas Tribute – Manikam Ramaswami The balancing act Kudos to NDTV... Alexa – Talking Wikipedia F C Kohli - his concerns all embracing Welcome focus on core competence China invests in India Lesson from Chandrababu Naidu Another Indian music maestro at the UN There was flood of milk. Reason: no milk commissioner! Inflation: are we emulating Argentina and Brazil? A think tank for Chennai Of course, Gujarat is vibrant For whom the MIDS bell tolls? Demise of a media baron... Return to king coal for urea... Cleaning Ganga – relocate tanneries and install electric crematoria TGS- The king storyteller Not just in-laws (and outlaws); they’ve renowned academics at the helm! The ‘Ayyo-yes’ is no more GM Technology at last! IPL - no surprise this scam PPP mode for upgrading Corporation Hospitals A proud Madrasi Lalu’s envy, India’s pride Fortune for Indian Airlines Naidu will soon build a new Hyderabad S V Raju – a ‘good’ true liberal Editor's Says Intellectual of rare qualities Wise Presidents EEC at the National Media Centre London, London Narayan Banning booze... Marketing expert Balagopal is no more Secularism and anti-Hinduism Delhi Chalo... Increasing non co-operation of state leaders The sea- saw battle continues... L&T- the specialty of special purpose vehicles Rahman at CIC He continues the focus on social amelioration Come elections, come advertisements... Bihar elections - the Rajaji formula worked The Swadeshi Trump A Grand Finale for SN’s MS centenary at the US… Paytm karo... More tributes to GR When online building permits work…. Modi storms Silicon Valley Remembering Indira Sivasailam... 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The star of Spencers is no more L&T: focus on infrastructure and more infrastructure… Why this malaise in medical education? CSR and CMI: promise of another Srinivasan Ramanujan... Auto components surge… Preserving for the future Multi-faceted Venkat A glass full of corruption Shaming of Tamils by Tamil farmers at Delhi Strengthen the base... Road development slows down Solar, solar everywhere … Funding the un-funded This scant respect for Law Where is Rajaji? Should we change the official year? Build close rapport with business leaders GNS - 100: our first subscriber No Maha Koottani in TN... to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. 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CRS, a jewel among managers, is no more. Don’t seem to feel the pulse… MHC should not return to its old indisciplined ways Welcome GST Contrarian cousins Whistle-Stop Tour of Raghuram Rajan Align crops to agro climate endowments… Land reclamation from sea appears cheaper! How Air-India loses customs... Adharma of opposition politics A welcome initiative by the judiciary Building loyalty through the stomach Kulandai was a giant WTO Meet: resolved to meet again Where a state respects its litterateurs… Liberal imports idling indigenous capacities B H Kothari - a tribute CII projects higher growth… Welcome changes that testify to Jayalalithaa’s return to health Tribute – M V Murugappan Recognition to role of NBFCs.... When the President was rendered homeless… Tatas moving out of urea production... Put expensive assets created to use... Welcome thrust on trade in Modi’s foreign visits... Sweet news for TN sugar mills Like Hinduism: many paths to reach God... Poor quality of university VCs Boy, can you beat these? Medical costs hit the roof... Discoms deserve better… For whom the bell tolls? Silver Years of Madras Musings IAS invades NDDB...
 
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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