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Trade between Hong Kong and India have grown stronger since India launched economic reforms in 1991. Hong Kong was India's fourth largest trading partner in 1996, while India was Hong Kong's 18th largest trading partner.

Citing Hong Kong customs data, the Indian consulate in the territory said in 1996 the two-way trade volume between the two grew by 2 per cent over that of 1995. In 1996 the volume of trade between India and Hong Kong totalled US$ 2.711 billion compared to US$ 2.655 billion the previous year.

The balance of trade has been consistently and strongly in India's favour, with the trade balance rising to US$ 1.187 billion in 1996 from US$ 1.064 billion in 1995, the Indian consulate said.

In 1996, the volume of India's exports to Hong Kong rose to US$ 1.949 billion compared to US$ 1.859 billion in 1995. Meanwhile, imports from Hong Kong to India declined to US$ 762 million in 1996, from US$ 795 million the previous year.

Among the commodities exported from India to Hong Kong in 1996, pearls and gems constituted 58 per cent of the total; followed by textiles at 13 per cent; leather, pharmaceutical products and cotton shared 3 per cent each. Jewellery and marine products both had 2 per cent each of the total export basket in 1996.

Hong Kong also plays a crucial role in India's trade with China. In 1995, about 63 per cent of India's exports to China passed through Hong Kong. There has been a steady growth in Hong Kong's share of India's exports to China, with the figure rising from a mere 36 per cent in 1993 to 58 per cent in 1994, followed by 63 per cent in 1995.

Further, highlighting the growing links between India and Hong Kong, the number of Indo-Hong Kong joint ventures has been on the rise, with an approximate investment of about US$ 350 million to date. At the end of 1996, there were 15 Indian joint ventures and five wholly owned Indian subsidiaries based in Hong Kong.

Some of the big Indian firms to set up shop in Hong Kong include Usha India, NIIT and the Oberoi Group. Among the India firms, Voltas has won an air-conditioning sub-contract for the new airport project in Hong Kong, with over 500 Indian workers involved in this project. In March, VSNL also staged a successful road show of its GDR issue in Hong Kong.

Underscoring the growing economic ties between Hong Kong and India are the just concluded agreement on the surrender of fugitive offenders, signed on Saturday, June 28, and the agreement for mutual assistance and co-operation in matters relating to customs, which was signed in May. The two governments have also signed an Air Services Agreement governing bilateral air services in October 1996, which will straddle the hand-over to China.

India was represented by Minister of State for External Affairs Kamala Sinha at the hand-over of Hong Kong to China on Monday night. She met Tung Chee-hwa, Hong Kong's new chief executive, on Saturday.