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Commercial banks are moving swiftly to strengthen and expand their operations to service the companies responsible for soaring trade levels between India and China.
Sino-Indian trade last year climbed by 56 per cent to $38.7bn, according to Chinese data, and could reach $60bn as early as this year rather than in 2010, as was previously expected.
Global banks with a strong footprint in Asia, such as Standard Chartered, have redeployed staff, while Indian and Chinese lenders such as Bank of China are increasingly focused on opportunities arising from the growing bilateral links.
Standard Chartered recently posted a senior Indian manager to Shanghai to service Indian clients in China and plans to move a Chinese manager to Mumbai this year. It has also started a talent exchange involving Indian and Chinese staff.
Shankar Vis, Standard Chartered's Asia-based group head of client coverage, said: "Both economies are still growing strongly and each country has comparative advantages in certain sectors, so we expect the trade flow to increase. We are well positioned to assist those companies operating in these markets."
The growing trade is being driven by the power and telecoms equipment sectors. India plans to invest $500bn in infrastructure in the next five years to improve its ailing power and transport sectors.
Reliance Infrastructure last month formed a joint venture with Shanghai Electric to make power generation equipment. Indian companies also view China as an important base for low-cost manufacturing. Suzlon Energy, a wind power equipment producer, last year opened a $600m plant in Tianjin.
The flows offer lucrative opportunities for commercial banks in areas such as trade finance, cash management and bond and guarantee issuance.
Other banks which operate in both countries, including Citigroup and HSBC, also report increased business on the back of rising bilateral trade.
Bank of Baroda, India 's fifth-largest lender, last month received regulatory approval to set up a branch in the southern Chinese city of Guangzhou.
