Hindu Business Line is reporting that India and China are likely to reach a bilateral trade worth some $40 billion a few years ahead of the 2010 target that was previously set. Exports from India to China include cotton, organic chemicals, iron, steel and inorganic chemicals.

Data from Export-Import Bank concludes that India's cotton exports to China rose from $514 million in 2005-06 to $750 million in 2006-07, organic chemicals from $460 million to $518 million and inorganic chemicals and organic or inorganic precious metal compounds from $328 million to $351 million.

Meanwhile, India-European Union trade has grown substantially over the past couple decades, from 4.4 billion euros in 1980 to more than 46 billion euros in 2006. "Trade with the EU accounts for nearly 20 percent of India's exports and imports, which makes the EU, as a bloc, India's largest trading partner," reports the Indo-Asian News Service.

News like this would make it seem as though India is doing just fine by itself. Yet when a big American company like General Electric publicly states that India has become a major "manufacturing hub" for its firm, the reality is that India is still very much a country coming to grips with the outsourcing initiatives of other countries.

"This is probably the best time for GE to grow in India because the government is pushing to develop infrastructure, but GE will need to deploy all its technology and skills to grow to its target of $8 billion in three years, " according to NDTV Profit. As such, GE India chief Tejpreet Singh Chopra is set to redefine GE's India strategy with a string of alliances and partnerships.

Add IBM to the growing list of companies that are reaping the huge rewards by doing business in India. InfoWorld says the company stands to pocket around $1 billion from Indian business. Not too shabby, especially when you consider the following, also from InfoWorld:

Reports, including in The Wall Street Journal, quoted an IBM official in the U.S. as saying that the company has increased its staff in India to 73,000 this year. The IBM India spokesman was unable to confirm this data immediately, but he confirmed that the company had 53,000 staff in the country at the end of last year.

Clearly, as long as India's infrastructure continues to play catch-up, service providers like IBM will continue to benefit. Services, which account for over half of the economy, continue to grow by around 8 percent to 10 percent, while the threat of recession in developed economies may increase outsourcing work to India, according to strategic consulting firm Oxford Analytica (via Forbes).

Car manufacturers like Suzuki, Hyundai and Daimler will benefit, too. Consider this excerpt from Voice of America:

Suzuki says it will invest $1.8 billion to increase capacity in its Indian factories over the next 15 months. Suzuki is not the only company to use India as a manufacturing base for compact cars being sold on global markets. South Korea's Hyundai has also made India a production hub for small cars. In October, the company launched a compact car known as the i10, which is being made only in Hyundai's Indian plants in the south of the country. Much of the production is being exported, to Europe, Russia and Latin America. Nissan says it also plans to manufacture a small car in India for export to Europe.

And from The Wall Street Journal:

Daimler AG said it will form a joint venture to make trucks with India-based Hero Group, seeking to widen its presence in the emerging markets. The truck joint venture calls for the local production of light-, medium- and heavy-duty commercial vehicles for the Indian volume market. Exports to other countries will come at a later stage, Daimler said. The German automaker's move comes at a time when global truck makers are gearing up efforts to increase their presence in fast-growing emerging markets such as India, China and Russia amid cyclical downturns in major markets such as North America and Japan.

Indeed, after a one-day meeting of the countries' officials and businessmen this past weekend, India, China and Russia China vowed to boost trade and investment with each other. The countries vowed to work together in arenas such as energy, technology, pharmaceuticals and services, according to a statement from the Federation of Indian Chambers of Commerce and Industry (via AFP).

Yet if India is to maintain its transition towards economic modernity, as Oxford Analytica suggests, "the manufacturing industry — which has the greatest potential to absorb labor — must be its key strategic sector. In this context, the strong rupee and high interest rates are particularly problematic."

From both a manufacturing and IT services perspective, there appears to be no end in sight when it comes to growth in India.