China-India Sister Cities Synergies and Implications for Business

Dr. Amitendu Palit's picture

Indian Prime Minister Narendra Modi’s first official visit to China in May 2015 is expected to lay the foundation for expanding the two Asian giants’ budding model of cross-border business and people-to-people contact: the sister-city arrangement. The future growth of such arrangements already is manifest in a slew of “sister city” arrangements planned between Chinese and Indian cities. The foundations of such interactions go back to 2013 when decisions were made to connect Delhi and Beijing, Bengaluru and Chengdu, and Kolkata and Kunming as sister cities.

During Chinese President Xi Jinping’s visit to India last year, China proposed linking Shanghai and Mumbai and Ahmedabad and Guangzhou as sister cities. During Modi’s visit, it is expected the two countries will finalize a framework agreement for increasing sister city collaborations. This fits with India’s plans to develop about a hundred ‘smart cities’ in a massive drive to upgrade its urban infrastructure as sister city arrangements will enable Indian municipal authorities to tap into Chinese investments and expertise. For Chinese businesses, Indian city projects offer good opportunities with the promise of stable returns. It is interesting to note that the cities chosen so far have interesting similarities that will enable them to benefit from mutual experiences. Delhi and Beijing, India and China’s national capitals, are both suffering from pollution and urban congestion. Bengaluru and Chengdu offer proficiencies in IT and software. Kolkata and Kunming have historical connections. Shanghai and Mumbai are financial capitals. Ahmedabad and Guangzhou are India and China’s biggest exporting and trading hubs. It is encouraging that China and India are not allowing outstanding political differences to come in the way of deeper business engagement. While both are negotiating borders, the effort to connect cities and provinces is a far-reaching and economically productive effort to which businesses should give due attention.