Iron and steel has emerged as the largest export item to China during January-March 2003, registering a whopping increase of 2,279 per cent to $293.843 million, as estimated by the General Administration of Customs of the People's Republic of China.

During the same period last year, iron and steel exports were at $12.34 million while during the whole of January-December 2002, iron and steel ranked third as an export item to China with total exports of $262 million.

This was less than what India has exported to China in the first three months of the current year.

Industry sources said, the trend was expected to continue for a while and would only move upwards once the new Chinese quota comes into effect.

In 2002, China's demand was in the region of 200 million tonne which is slated to increase to 220-250 million tonne. China has a production capacity of around 160 million tonne.

The surge in steel exports to China would continue till 2008 for the Beijing Olympics. Speaking on the sidelines of a Confederation of Indian Industry (CII) seminar on "Doing Business with China," Piyush Bahl, director CII said, China would be spending around $50 billion for upgrading Beijing for the upcoming event.

According to data in the first three months, the balance of trade has tilted in favour of India. Indian exports were to the tune of $947 million as opposed to $432 million during January-March 2002.

Again, during January-March 2003 Indian imports were 722.6 million as against $506.8 million during January-March 2002.

Bahl said the other potential areas of export to China would be biotechnology, services, pharmaceuticals and information technology.

Another item which registered a jump in exports this year was inorganic chemicals. During January-March 2003, inorganic chemicals exports registered an increase of 397.7 per cent to $36 million. Ores, slag and ash ranked second on the export list and was worth $248.93 million.

Bahl said, the strength of the China market has led many companies like Sundaram Fasteners and Apollo Tyres to set up a manufacturing base there.

Among the other Indian companies who have a presence in China are Aditya Birla Group, Tata Consultancy Services, Reliance Industries, Infosys, Ranbaxy Laboratories, Tata International, to name a few.

To further augment relationship, CII has planned to set up 'India Club China,' which would aim to provide for promoting Sino-Indian bilateral economic and trade co-operation.

India Club members will have the benefit of conducting business with China through unmanned representative offices in Shanghai, the heart of China's business capital.