'The first visit by the Hong Kong chief executive was a success. The visit has greatly helped promote Hong Kong as an attractive investment and tourism destination,' says Muthu Arunachalam, chairman of the Indian Chamber of Commerce in Hong Kong.

During his visit Tsang held discussions with Indian Finance Minister Pranab Mukherjee and other senior government policy planners on promoting Hong Kong-India bilateral ties.

As a result Hong Kong and India are close to signing a Double Tax Avoidance Agreement.

According to trade figures provided by the Indian consulate, last year trade between India and Hong Kong grew at a healthy 40 per cent to US$18.79 billion.

Hong Kong mainly exported telecom and sound recording reproducing apparatus and equipment, electrical machinery, office machinery, automatic data processing, power generating equipment and machinery.

India and Hong Kong's bilateral trade in the first six months of this year has already reached US$11.87 billion, an increase of 32.5 per cent over the same period last year, making India the seventh largest trading partner of Hong Kong.

Apart from trade, Indian information technology companies have been actively doing business on the mainland and Hong Kong for years now.

IT majors such as Infosys, Tata Consultancy Services, Wipro and Satyam have offices in major mainland cities and employ thousands of local mainlanders in their call centres.

After Premier Wen Jiabao's visit to India last year, the two Asian giants set a trade target of US$100 billion over the next few years. At present, trade between the two countries is about US$70 billion annually.

The economic relationship between the two Asian giants has proved beneficial to both countries in a number of areas. China is strong in engineering, infrastructure and heavy duty products, while India has global expertise in software and pharmaceuticals.

Apart from these, China and India make up the BRICS grouping of countries, that include Brazil, Russia and South Africa.

Sudhir Dole, ICICI Bank's chief executive Hong Kong and regional head for Asia, Middle East and Africa, says that BRICS countries, especially China and India, are still experiencing strong growth, while other major economies are still stuck in economic gloom.

'With the rising domestic demand in both countries and the infrastructure requirements that this is bringing, the mutual investments are also increasing exponentially,' Dole says.

He points out that historically, Hong Kong has been an important market for India and remains so. 'By being present in Hong Kong, we are in a prime position to help Hong Kong companies that want to do business in India.

'The city's proximity and increasing importance as the gateway to the mainland also presents us with immense opportunities to help Indian companies wanting to enter and grow in China,' Dole says.

With trade between the two countries growing at a rapid rate, Hong Kong is ideally placed to act as a gateway to the mainland, in terms of re-exports and imports.

Arunachalam says that Tsang also urged Indian companies to consider a secondary listing in Hong Kong during his visit. Some of the Indian companies have taken the issue seriously and are considering a listing on the Hong Kong stock exchange.

Arunachalam also pushes the idea of setting up a diamond bourse in Hong Kong. 'In the coming years, Hong Kong, Shanghai and Mumbai will dominate the global diamond trade, eclipsing New York and Antwerp,' he says, adding that the bourse would help the burgeoning diamond trade between India, Hong Kong and the mainland.

While the IT sector has made India a global power to reckon with, the country is making rapid progress in developing other sectors such as biotechnology, nanotechnology, aviation and tourism.