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Hong Kong sees ‘good possibility’ of importing electronic components from India

Hong Kong is looking at stepping up trade between the two countries.

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Hong Kong, the world's eighth-largest trading economy, sees a ‘good possibility’ of importing consumer electronic components from India and will ‘encourage’ local companies to set up assembly plants in India with the aim of bolstering economic and business ties.

Terming the potential entry as ‘a win-win situation’, it has stressed on stepping up the programme of exchange and understanding between the two countries and signing of the Double Taxation Agreement and Investment Protection Treaty for the promotion of trade and investments.

However, on the bilateral trade front, Hong Kong expects a growth in exports to India but sees imports from India stay flat.

"Yes, there is a good possibility (of imports) of parts and components for making consumer electronics products. Because we are the largest exporter of telephones, mobiles in the world. So, we need parts for finished products," Hong Kong Trade Development Council (HKTDC) Deputy Executive Director, Raymond Yip told reporters in Hong Kong.

"Because we also trade in products and we don't buy for our 7.3 million people here. We buy actually for 1.3 billion people in China, we buy for the world. We can buy worth $1.4 billion per day for the world."

He further said local companies in Hong Kong can also be encouraged to invest in India by setting up assembly plants to tap the big domestic market there in the wake of rising income of the middle class.

According to HKTDC, Hong Kong does not produce components itself and imports the same from China, the US, Japan, Korea, Taiwan, Malaysia. And this is where India can fit in, Raymond noted.

"India excels in making good quality telecom components because of your domestic research and development and the presence of MNCs... electronics is our biggest industry. Out of $462 billion of our exports, half is electronics," Raymond said.

"We could import that from India because you produce some good components because we need components and parts to make products for exports."

Hong Kong's total exports to the world last year stood at $462 billion while its imports remained at $518 billion.

On the 'Make In India' initiative, he said: "For us, anything which turns into business opportunities is great and of course, we want to sell more products to India." He pointed to some constraints though in terms of import regulations, and tariff, adding that it is being liberalised.

HKTDC, established in 1966, is a statutory body dedicated to promoting Hong Kong's trade in goods and services.

Asserting that Hong Kong has a ‘big’ appetite for trade, Raymond said the country also buys products, including luxury items such as watches, for 60 million tourists comprising 45 million from China.

Stepping up his pitch further, Raymond said it is number one market in the world for Swiss watches and Japanese food products.

"We will soon establish assembly operations in India. We are investing over the world. Out of this $143 billion of investment outflows last year, a lot of them were manufacturing investments," Raymond said.

"In product components and parts, they (companies) could import parts components and assemble in India by using your labour and land and sell those products domestically. And this is also consistent with your government policy."

Raymond identified consumer electronics, textile and watches as the areas where such plants can be set up.

An exhibition is slated to be organised by Hong Kong, in partnership with China, in Delhi in December for showcasing Hong Kong and Chinese products for the Indian market.

He lamented that there has not been enough understanding and attention given by both sides because in the past, "everyone has been focusing on the West".

"So, if we don't pay attention and you don't get understanding... it is always mutual. I think it's important to step up exchange and understanding and also change the mindset. I am not saying you should forget the West, it's important. But it can be East as well," he stressed while trying to make his point.

Raymond also sought the Indian government to do more on facilitation and visa for businessmen for the promotion of trade and investment.

In 2015, India was Hong Kong's fourth-largest export market, with total exports to India growing 8.1% year on year to $13.1 billion. Major export items included telecom equipment and parts with a share of 39.3 per cent, pearls, precious and semi-precious stones (36.3%).

On the other hand, India was Hong Kong's ninth-largest source of imports in 2015, amounting to $10.6 billion.

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