India and China will have the first-ever provincial leaders’ forum meeting on Friday— a new format created by the the two governments — to encourage the state-province relationship in the coming years.
From the Indian side, Maharashtra Chief Minister Devendra Fadnavis and Gujarat Chief Minister Anandiben Patel will attend the meeting, while the Chinese side will be represented by a handful of provincial leaders. It will be held in Beijing, after talks between Prime Minister Narendra Modi and Chinese Premier Li Keqiang.
China has committed to setting up two industrial parks in India, one each in Gujarat and Maharashtra.
In fact, the provincial leaders’ meeting is a consequence of sub-national cooperation, as envisaged by the two governments over the last few years-which was further amplified during Chinese President Xi Jinping’s visit to India in September last year.
“This is going to be a major focus area during the visit, and also in the relationship in years to come,” an Indian diplomat told The Indian Express.
The Chinese leadership has adopted, what is called the “going out” (zou chuqu)” policy, under which they go beyond short-term trade. In this context, the provincial-level enterprises in China are seen as frontrunners in implementing the policies.
Chinese provinces now routinely send trade delegations to Indian states for investments, and they are not just restricted to state-owned enterprises and local governments, but also include provincial private enterprises.
As a result, states in India are in a race to attract investments from foreign countries, including from China.
Indian diplomats in China point out to Andhra Pradesh, which gives several concessions to investors including tax holidays, excise duty exemptions, concessions in entry tax, interest-free loans of central sales tax and free land.
So, there is a complementarity to China’s “going out” strategy and India’s sub-national need for growth, diplomats point out.
With increasing trade between the two countries, the Chinese provinces are taking a lead role in facilitating these engagements.
This, officials point out, lies well within Prime Minister Narendra Modi’s campaign to empower the states and not just focus on the “two Capitals” of India and China.
Indian diplomats has been led by Modi’s mantra in this regard, and this is going to be the future narrative of the cooperation between the two countries.
During his interaction with Indian officials, sources said that Modi has often raised the issue of Gujarat‘s place — as it has emerged as a favoured destination among the Chinese investors. A Chinese diplomat told The Indian Express that Gujarat is seen as Guangdong province in China, which was the mainstay of the Chinese economic growth throughout the 1990s. She also said that Madhya Pradesh is also emerging as a new player, where the Chinese investors are going in the last couple of years.