Chinese President Xi Jinping and Indian Prime Minister Narendra Modi agreed at a summit on Saturday to establish a high-level group to address the galloping trade deficit of India with the world's second largest economy, said a senior Indian diplomat .
Xi and Modi held almost six hours of talks in an Indian coastal city at their second annual summit designed to break decades of distrust over border disputes, trade ranks and China's close military ties with Pakistan.
Relations stirred even more in August, when India revoked the special status of occupied Kashmir, angering both Pakistan and its all-weather ally, China.
Read: China irritates India for retaining Kashmir two days before the summit
But the Kashmir issue was not discussed during Saturday's summit and trade and investment issues were addressed instead, said Indian Foreign Secretary Vijay Gokhale.
China, involved in a blunt trade war with the United States, was quite grateful for the imbalance in its own trade with India and willing to address it, Gokhale told reporters.
“There was a good conversation about trade, a matter of concern; President Xi said that China is ready to take sincere measures in this regard and discuss concretely how to reduce the deficit, ”he said.
Bilateral trade between China and India reached $ 95.54 billion in 2018, with a trade deficit of $ 53 billion in favor of China, the largest in India with any country.
"One of the understandings reached by the two leaders was that a new mechanism will be established to discuss trade, investment and services," said Gokhale. The high-level group will be led by Indian Finance Minister Nirmala Sitharaman and Chinese Deputy Prime Minister Hu Chunhua.
Generic drug manufacturers in India have long sought greater access to the Chinese market, as have Indian IT services. Xi said both were welcome.
China, meanwhile, has been urging India to make an independent decision on the offer of the telecommunications equipment manufacturer Huawei for the 3G network proposed by India and not be influenced by US pressure.
The United States has asked its allies not to use Huawei equipment, which says that China could explode for espionage. Beijing denies this accusation.
In his initial comments, Xi said he had a free and frank discussion with Modi and that he would seek proposals that the two leaders discussed to improve bilateral relations. "Yesterday and today we have engaged in sincere discussions and as friends," said Xi.
"I look forward to more discussions, I can follow up on the proposals discussed yesterday." Xi gave no further details.
In Mamallapuram, in southern India, Modi took Xi on a personal tour of the temple monuments dating back to the 7th and 8th centuries, when the Indian kingdoms cultivated commercial ties with the Chinese provinces.
Modi said in his opening remarks that he and Xi had agreed at a previous summit to handle their differences wisely and not let them fall into disputes.
India and China share a 3,500-kilometer border, over which they went to war in 1962. The course of the border remains unsolved despite more than 20 rounds of talks.
Xi also suggested that the two sides expand cooperation in the military sector to increase confidence.
Xi headed to Nepal later on Saturday, where it is expected to boost China's greater participation in the development of its infrastructure as part of the Beijing Belt and Road Initiative to boost commercial and transportation links in Asia.
India has refused to join the BRI because a part of it goes through Azad Jammu and Kashmir.
He has also said that infrastructure projects must be adapted for the benefit of the host country and not borrow them, which has happened in the case of the small island nations of Sri Lanka and the Maldives.