Indian Embassy in China to have an Economic Wing .

In the backdrop of the recent controversy involving restrictions on import of Chinese telecom equipment, the Government has decided to set up an Economic Wing at the Indian Embassy in Beijing to boost India-China trade and investment ties as well as for better coordination between the two countries in multilateral fora.

The Union Cabinet has approved the proposal for creation of an Economic Wing in the Embassy of India in Beijing, an official statement said, adding that it will be headed by a Minister (Economic). The Cabinet meeting on Wednesday was chaired by the Prime Minister, Dr Manmohan Singh.

The focus of the Economic Wing will be on promotion of exports of Indian goods in China as well as financial and technical collaboration between Chinese and Indian firms. Besides, it would advance bilateral cooperation in large infrastructure projects, and identify new areas of cooperation in business and trade.

The trade between the two fastest growing economies has grown from just $12.71 billion in 2004-05 to $41.85 billion in 2008-09. The bilateral trade is expected to touch $60 billion by this fiscal-end from around $43 billion in the last financial year. China is India's largest trading partner, but New Delhi has expressed concern about the huge trade deficit with China.

The move to set up an Economic Wing is aimed at enhancing the negotiating capability of India and strengthening the institutional capabilities of its Mission in China. The Wing will also deal with matters relating to macroeconomic coordination and the G-20 as well as multilateral and bilateral borrowing/lending. Besides, it will look at financial sector developments in China and the Asia Pacific region.

Official sources told Business Line that the Cabinet decision is not because of the recent issues relating to the telecom sector. They said India has such an Economic Wing in other leading trade partners like the US, European Union, Japan and Korea. "Our trade with China was not much even in 2002-03. But it suddenly grew a lot in the last 4-5 years. Due to this, there was a long-pending demand to upgrade our existing official set up in China and to have a separate Economic Wing," an official said.

Coordination of efforts to facilitate increased bilateral trade and investment flows is also expected to generate fresh opportunities for cooperation in several socioeconomic services. The strengthening of economic ties between the two countries also has to be seen in the context of emerging trends in regional economic integration, the official statement said.

Source : Business Line