Background: India’s relations with Hong Kong are historical and date back to more than 150 years. India and Hong Kong have been trading with each other since the middle of the 19th century; relations between the two people have been warm and cordial; and, Hong Kong has for long been home to a large Indian community, many of who arrived here more than 150 years ago. The Indian community has actively contributed to Hong Kong’s emergence as a hub of global finance and trade. Members of the Indian community helped establish well known institutions in Hong Kong, like the Hong Kong University, the Ruttonji Hospital and the Star Ferry. The Indian community in Hong Kong is estimated to be more than 45,000.

Current developments: The recent years have seen relations between India and Hong Kong expand rapidly. There are around 1,500 Indian companies based in Hong Kong, and their activities range from services, investment finance, banking, industries, transportation, information technology and telecommunications. Hong Kong is also host to a large number of Indian professionals in banking, IT and shipping. There are 10 Indian public sector banks currently operating in Hong Kong. Similarly, numerous global financial majors, investment institutions and fund managers operating in India have their regional headquarters in Hong Kong. Hong Kong is also a major sourcing centre for Indian companies and it has emerged as a major re-exporter to Mainland China of items it imports from India.

Against background of the fast evolving bilateral relationship, the Hon’ble Donald Tsang, Chief Executive of Hong Kong paid a visit to India in October 2010. This was the highest-level visit by a Hong Kong government official to India. The Chief Executive met senior government officials and interacted with top business leaders in India during his visit.

Bilateral agreements: Agreements concluded with Hong Kong include Customs Cooperation Arrangement (1997); Surrender of Fugitive Offenders (1997); Air Services Agreement (2007) and, Agreement on Mutual Legal Assistance in Criminal Matters (2009). An Agreement on Transfer of Sentenced Prisoners was finalized in 2009 and is expected to be concluded soon. The text of a Comprehensive Double Taxation Avoidance Agreement between India and Hong has been mutually agreed upon and the agreement will be signed on completion of the obligatory procedures by both the governments.  An Agreement on Reciprocal Enforcement of Judgements concluded in 1968 requires re-notification due to a change in the nomenclature of Hong Kong courts following handover of sovereignty to China in 1997. Discussions are underway for concluding a Bilateral Investment Promotion & Protection Agreement (BIPA).

Bilateral trade: India-Hong Kong bilateral trade for the period January to December 2011 stood at US$ 23,092 million representing an increase of 23.22% compared to same period in 2010. India retained its position as the 7th largest trading partner of Hong Kong during this period as in the year 2010. Exports from India to Hong Kong during this period were worth US$ 11,103 million, an increase of 20.6%. Of this, goods worth US$ 9494 million were re-exported to other countries from Hong Kong. Imports to India from Hong Kong totalled US$ 11,989 million (25.6% growth). The balance of trade for the period was in Hong Kong’s favour to the extent of US$ 886 million.  India’s share in Hong Kong’s total trade during the year 2011 was 2.5%.

  India - Hong Kong Trade: Table

[Amount in US $ million]

                    (Source: Census and Statistics Department, Hong Kong)

 

February 2012