The China opportunity

Once mortified by the fear of cheap imports,many Indian big businesses now see China as a valuable partner. To be sure,there are sections of Indian industry that continue to demand protection against Chinese goods. But major Indian companies involved in such sectors as power production and telecommunications have insisted that partnering with China is critical for the rapid expansion of India’s infrastructure. For Indian companies with a global footprint,business with China is more than an opportunity; it is a vital necessity. For instance,over the last two decades,the Tatas’ traditional international bias has been towards the West and Japan and Singapore in the East. But as an increasingly global company,it was inevitable that they would turn to the world’s second largest economy and exploit the many synergies awaiting there.

The new logic of India-China cooperation is not a one-way street. With the West — the principal destination for its exports — caught in a prolonged recession,China’s economy is slowing down. To sustain reasonable growth rates,so necessary for its internal political stability,China needs to develop alternative export markets. Investing in India’s massive infrastructural needs should now be very attractive for Chinese companies. To make the best of the emerging complementarities,Indian business needs a more purposeful China policy from the UPA government. Having reordered India’s relations with the United States in the first term,Prime Minister Manmohan Singh has time yet to leverage the China opportunity to renew India’s economic prospects.