Indian States Line Up To Lure Chinese Investors, Offering Easy Access To Land And Minimal Red Tape

China is mulling investments in several locations across India, with the northern Indian state of Haryana freeing up thousands of acres of land to be sold to Chinese companies for setting up factory complexes, Indian media reported on Wednesday.

Chinese officials are also eyeing locations in the western Indian states of Gujarat and Maharashtra and the southern state of Tamil Nadu for potential investments, The Hindu reported. Haryana, which is part of the Delhi-Mumbai Industrial Corridor, a government-sponsored program to transform an underdeveloped chunk of the subcontinent between the country's political and financial capitals into a global manufacturing and trading hub, has already received investments from Japan for an industrial park.

China has shown heightened interest in recent months in investing in India, particularly in the agro-processing, tourism and manufacturing sectors, as the two countries seek to reach $100 billion in bilateral trade by 2015, up from the present volume of $60 billion. Currently, trade is sharply tilted in China’s favor and the proposed industrial parks are expected to ease the trade imbalance between the two countries.

Officials from the China Development Bank -- a state-run body that oversees Chinese investments outside the country -- recently visited a 6,000-acre site in Haryana, which will be “available for them to purchase,” Haryana state officials told The Hindu newspaper. A state delegation from Haryana will also visit Beijing and Shanghai this week in an effort to lure Chinese investors, as the state faces stiff competition from other Indian states also eying Chinese investments.

Haryana is offering a single-window clearance for all investment proposals above 1 billion rupees ($16 million), but the state government is also considering setting certain conditions that would require Chinese firms to invest a certain amount every year to avoid losing the purchased land, reports said.

Tarun Bajaj, managing director of the Haryana State Industrial and Infrastructure Development Corporation, said individual investors would own the land they purchase in India, unlike in China, where the government retains ownership of the land allotted to companies developing industrial zones.

The Indian government is also seeking Chinese and Japanese investment in two railway corridors, linking the national capital, New Delhi, to several northern and north-western towns, The Hindu reported.

During Indian Prime Minister Manmohan Singh’s visit to China in October, the two neighbors had agreed to expedite negotiations to establish industrial zones, noting that they are entering a new stage of “economic engagement based on pragmatic cooperation and mutually advantageous policies and practices,” according to a Xinhua report.