Come September 1 and China will cut tariffs on more than 1,700 imported products from India and four other Asian nations as part of the tariff concession arrangement reached under the Asia-Pacific Trade Agreement.

Chinese exports to the five nations --- India, the Republic of Korea, Laos, Sri Lanka and Bangladesh --- too will enjoy similar tariff concessions under the pact. China's trade with members of the organisation totals $134.3 billion.

This is likely to be a big push towards achieving the declared objective of the two countries to raise the two-way trade volume from $13.6 billion at present to $20 billion by 2008 and $30 billion by 2010.

The bilateral trade between the two countries amounted to about $13 billion during 2004-05. During the last 7 years, it has grown by 260% and looking at this impressive growth. However, the actual growth potential for India's trade with China is reflected only when looks at India's share in China's total global trade. China has a global trade of $1,154 billion.

The Indo-China trade forms a very small component of this at just $ 11.3 billion, that is less than 1% of China's total global trade. This is indicative of the huge opportunities available for Indian entrepreneurs for increasing trade with China.

The Indian commerce ministry has identified auto engine components and automobiles, organic and inorganic products and pharmaceuticals, metal and metal-based products, agricultural products, engineering goods, marine foods, fresh and processed fruits and vegetables, medical and diagnostic equipment and laboratory equipment, consumer durables and textile yarns as the products with very high potential for growth in trade volume in the Chinese markets.

Major exports from China to India include manufactured products and semi-finished products, while major exports from India were primary and semi-finished products.

The products that will be affected by the new trade arrangement between India and China include agricultural products, medicines, chemicals, textiles, metal products, mechanical and electrical products, motor vehicles and spare parts. China joined the then Bangkok Agreement in May 2001.

This year, Indian exports to China rose by a 28% in the first half of the year, which is just one-third of the growth rates seen in the past two years. India exported goods worth $5.38 billion in the first half of 2006, which is not significantly different from its full-year achievement of $9.78 billion in 2005. Indian bought $6.25 billion worth of Chinese goods in the first half of 2006.

India enjoyed a trade surplus of US$1.2 billion during the first eight-month period in 2005 compared to US$1.7 billion in the previous year. In order to further boost Indo-China trade, New Delhi is planning to set up branches or representative offices in China to showcase products, liaison with the Chinese Provincial and Central Governments, learn about import requirements from multinational manufacturers having investment in China and focus on investment and trade in knowledge-based service sectors in view of its comparative advantage.