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Hong Kong eyes India's financial, film sectors
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After achieving tremdous success in bilateral trade in merchandised goods, Hong Kong, one of the largest trading hubs in Asia, is now exploring opportunities in financial and film sectors to strengthen ties with India.
Growing at 12 per cent year-on-year basis, the bilateral trade between the two countries had reached US $12 billion in 2009 with enhanced focus in diamond and jewellery sector.
"So far, we were focusing on merchandise trade for future growth, but, we find enormous opportunity in financial services and film sector to achieve the targeted growth of 12 per cent in the next couple of years," Raymond Yip, Assistant Executive Director of Hong Kong Trade Development Council (HKTDC) said on Wednesday.
Yip was on a tour to India to promote Asian Financial Forum (AFF) to be held between 17 -18 January, at the Hong Kong Convention and Exhibition Centre, Hong Kong. With special focus on India's financial sector, the focus of the event is to enhance trade relationship between the two countries in sectors like tea, liquor, technology, power technology, automotive, environmental technology, food processing, infrastructure; and financial services like initial public offerings, private equity, venture capital etc.
With an aim to invite more banking services to Hong Kong, Yip met today K Unnikrishnan, Deputy Chief Executive of Indian Banks' Association who assured him of more involvement of India's financial services with Hong Kong. I was amazed to know that Hong Kong houses 11 branches of India's leading banks, Yip said.
Over a dozen of Indian jewellery makers have already set up units in the bordering area of Southern China. These units import raw material and export processed jewellery through Hong Kong to avail the benefit of 'zero' import-export duty. They pay a marginal tax on profit (not on turnover). Income outside Hong Kong is also waived from any levy.
Most importantly, China, being the mass consumption market and export from Hong Kong is also subject to duty free, most of Indian jewellery makers have shifted major processing centres to China from elsewhere.
Emphasising the need for Indian companies to avail the benefit low taxes in capital gains, Yip said that Hong Kong controlled $57 billion of venture capital in 2009, consisting of 30 per cent of Asia’s total venture capital fund. Hong Kong, recently merged with China, managed US $1.1 trillion fund through asset management, the largest in Asia.
Yip also met with Indian Merchant Chambers (IMC) officials who he found keen on private equity participation.
India's GDP is estimated to rise in high single digit. This means, increased focus on financial sector can yield enormous growth in bilateral trade, Yip added.
Talking about film industry Yip said that China's regulation does not permit to import more than 20 films a year. But, there is no limit of films imports, if they are made in Hong Kong, of course in Chinese language. India's film industry is the second largest only after the Hollywood, offering thereby, enormous room for expansion in Hong Kong, he said.
