Sep 18, 2014 2:09 AM

India, China leaders to discuss trade, investment

The Associated Press

NEW DELHI (AP) Visiting Chinese President Xi Jinping and India's Prime Minister Narendra Modi were Thursday scheduled to hold talks aimed at boosting trade and Chinese investment even as tensions rise between the countries over their disputed border in the high Himalayas.

Xi was given a ceremonial welcome at the presidential palace in New Delhi, with the president's bodyguards on horses and inspected a military guard of honor. Later, the Chinese leader and his wife visited a memorial to Mohandas Gandhi to pay homage to India's independence leader.

But while XI and Modi meet, Chinese and Indian troops were involved in a face-off along their border in the Ladakh region in northern India. Indian officials said Chinese soldiers had entered Indian territory and appeared to be building a road in the region.

Ministry of External Affairs spokesman Syed Akbaruddin told reporters Thursday that India would raise the border problems with the Chinese leader during the talks.

However, the main focus of the talks would likely be on pushing Chinese investment in developing India's infrastructure and boosting Indian exports in an attempt to improve the balance of trade that is skewed in China's favor.

Trade between the countries was more than $70 billion in 2013. But India's trade deficit with China is already at about $40 billion and there are fears that could grow if China uses India as a dumping ground for cheap manufactured goods in the future. The countries have set a trade target of $100 billion by 2015, but both sides still need to iron out wrinkles in their trade and tax policies to help achieve that goal.

Analysts say while there is little danger of a conventional war breaking out between the two Asian giants, the frequent border skirmishes make it difficult to achieve a lasting resolution of the dispute.

India and China have held several rounds of talks to resolve their long festering border dispute but have made little real progress. The past few years have seen several flares up with India accusing Chinese soldiers of repeated border incursions.

The two sides fought a brief war in 1962, harming ties for decades, although relations have improved in recent years.


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