The restoration of direct air connectivity between India and China has created a new window of opportunity for economic and trade cooperation between the two neighboring countries, observers said.
For years, Indian entrepreneur Praveen Suthar had been waiting to import raw materials from China's Guangzhou to set up a portable house manufacturing plant in Udaipur, a city in Rajasthan state.
Praveen needs to make five to seven trips to China each year to buy high-tech raw materials from Guangzhou and its nearby cities to set up the manufacturing plant and to run his business successfully.
Direct flight services between Kolkata airport, the eastern Indian city, and Guangzhou, which resumed in October, have finally turned his dream into reality.
In November, Praveen made a 12-day trip to Guangzhou by a direct flight from Kolkata and made all arrangements for the regular import of raw materials for setting up the manufacturing plant. After returning to India, Praveen completed all the necessary formalities and obtained the local government's approval for setting up his manufacturing plant, where around 400 people would get employment.
There are high-tech raw materials in China and importing from China is always cost-effective, said Praveen, who is also the chairman of the Federation of Rajasthan Trade and Industry. The resumption of direct flight services between the two countries has facilitated Praveen's long-awaited dream of setting up his plant.
"We are highly dependent on China for raw materials," said Hemant Jain, who regularly travels between India and China. Jain has a large-scale manufacturing plant for LED lights in Rajasthan and his plant supplies LED lights to major Indian companies.
Restoring dialogue
India and China have agreed to advance bilateral exchanges, restore institutional dialogue, properly manage differences, strengthen coordination in multilateral and regional affairs, uphold multilateralism, and safeguard the shared interests of the Global South, according to a statement issued by China's foreign ministry on Dec 12.
On Oct 26, an IndiGo flight took off with 176 passengers from Kolkata airport, to Guangzhou, the first direct flight after five years. Starting Jan 2, China Eastern Airlines launched daily nonstop flights between Delhi and Shanghai. The Kolkata-Kunming route is "set to return soon", Yu Jing, spokesperson of the Chinese embassy in New Delhi, said in a post on X on Dec 18.
A new direct connection between Mumbai and Shanghai is also in the works, the post said.
A number of Indian analysts have said direct air connectivity has boosted the confidence of traders and entrepreneurs, and can help India reduce its growing trade deficit with China.
The companies and businesspeople from both sides, who had stalled their plans in the last four or five years, are now taking the initiative to expedite trade and business between the two countries, said Santosh Pai, an advocate who advises businesses that operate between the countries and a scholar at the Institute of Chinese Studies in New Delhi.
He said Chinese companies have started visiting India to explore possibilities, while some Indian companies and businesspeople are making new plans. "It is a new context, direct flight services have significantly contributed to the revival of interest from both sides," Pai said.
"Direct flights have a huge, disproportionate amount of signaling effect," he said.
"We can do business here more sincerely with more commitment," said Ramachander Poodipeddi, who leads public affairs in India for a Chinese multinational company.
Indian exporters bearing the brunt of 50 percent US tariffs on exports are increasingly considering diversifying their exports and trying to divert their exports to China.
Jagdish Kumar, an Indian seafood exporter, said there is a good chance that Indian businesspeople will be more reliant on China as US tariffs have taken a heavy toll on exports. Jagdish is trying to diversify his exports into new markets.
"India's seafood exports to China have already increased by 9 percent compared with last year. India's seafood exports to China are expected to go up further due to US tariffs," said Gibinkumar T.R., secretary of the Marine Products Export Development Authority, a statutory body under India's Commerce Ministry.
"As there is a direct flight, there will be more interaction on the business side. Business will grow between the two sides in the coming weeks, which is a good sign for the world economy as well," said Ajay Sahai, director-general & CEO of the Federation of Indian Export Organisations.
