Indian, Chinese firms sign deals worth $29m

SHANGHAI (AFP) - Indian and Chinese firms signed 21 agreements which officials said were worth a total of more than US$22 billion (S$29 billion) in Shanghai on Saturday, witnessed by visiting Prime Minister Narendra Modi.

"Let us work together in mutual interests," Modi told executives from 200 Chinese and Indian companies at the signing ceremony. "Now India is ready for business."

The nationalist leader was on the final day of a three-day trip to his fellow Asian giant, as the two jockey for regional influence and India’s trade deficit with China balloons.

Despite his hardline reputation, Modi has moved to engage with Beijing since his election last year, and he was looking for an economic boost from the trip, seeking to deliver on election promises for foreign investment.

China is India’s biggest trading partner with two-way commerce totalling US$71 billion (S$94 billion) in 2014. But India’s trade deficit with China has soared from just US$1 billion in 2001-02 to more than US$38 billion last year, Indian figures show.

Indian embassy trade counsellor Namgya Khanpa said the 21 agreements signed at the Shanghai event were “worth over US$22 billion", with another five exchanged earlier.

A list circulated by Indian officials showed many of the contracts were for Chinese banks to finance Indian firms, and also included deals in the telecom, steel, solar energy and film sectors.  

Earlier during Modi’s visit, Chinese President Xi Jinping welcomed him in Xian, the capital of his ancestral home province Shaanxi, in what his host said was an unprecedented gesture.  

But relations between the world’s two most populous nations are soured by a long-running border dispute that saw them fight a brief war in 1962, and on Friday Modi told Chinese Premier Li Keqiang that Beijing needs to “reconsider its approach” to relations.