India, China set to sign $1 billion deal to boost ties

  • July 2, 2021

India and China are set to finalise a deal to buy $1bn worth of paper towels, as the two countries begin talks on ways to boost bilateral trade.

The deal is the biggest paper towel deal signed by India and Beijing in more than a decade, with India’s Prime Minister Narendra Modi and Chinese President Xi Jinping set to meet on Monday.

The agreement, which is expected to be finalised within days, comes as Modi seeks to increase India’s exports and diversify its economy away from oil and gas to include manufacturing, agriculture and renewable energy.

The move comes ahead of a trade summit between the two nations next week in the Chinese city of Tianjin.

Modi has repeatedly said that his economic reforms are designed to make India a more attractive place to do business than the United States.

China is the world’s second-largest economy and the largest importer of Indian goods.

China has also been a major source of investment for India, which has seen its GDP grow faster than the rest of the world over the past decade.

The Indian prime minister is also seeking to bolster the bilateral trade between the countries, which have the world at least $1 trillion in bilateral trade in goods.

However, the deal is expected not to be finalized until late July, when India will formally invite the Chinese government to the summit.

The Prime Minister is likely to stress the importance of India’s relationship with China to his bilateral relations with both countries, while also emphasising the need for an open and transparent bilateral trade deal.

In recent years, both China and India have been heavily criticised by some sectors for not being transparent about the nature of trade deals, which they have said they are working on.

India has said that its trade surplus with China, which stood at $3.5 billion in 2016, will be the highest in its history by the end of the decade, although the actual figure is likely higher.

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