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India and China 'to double trade' India and China 'to double trade'
(about 2 hours later)
India and China have pledged to double trade to $40bn (£21bn) a year during talks between Indian PM Manmohan Singh and Chinese President Hu Jintao. India and China have pledged to double trade to $40bn (£21bn) a year by 2010 during talks between Indian PM Manmohan Singh and Chinese President Hu Jintao.
Mr Hu also said the two sides would continue efforts to solve their long-running border disputes.Mr Hu also said the two sides would continue efforts to solve their long-running border disputes.
He was speaking in Delhi during the first visit to India by a Chinese head of state for 10 years. He was speaking in the capital Delhi during the first visit to India by a Chinese head of state for 10 years.
China and India have overcome many hurdles in recent years, but differences remain, correspondents say. China and India have overcome many hurdles in recent years but differences remain, correspondents say.
BBC economics reporter Steve Schifferes says the two sides have different objectives in the trade deal. The BBC's Steve Schifferes says the two sides have different objectives in the trade deal.
China wants to boost its exports of manufactured goods to developing countries, while Indian firms, which have a comparative advantage in outsourcing of business and IT services, want more investment in China.China wants to boost its exports of manufactured goods to developing countries, while Indian firms, which have a comparative advantage in outsourcing of business and IT services, want more investment in China.
'Peace and tranquillity''Peace and tranquillity'
Mr Singh said there was enough space for the two countries to developtogether in a "mutually supportive manner" after talks with President Hu. Mr Singh said there was enough space for the two countries to develop together in a "mutually supportive manner" after talks with President Hu.
We both believe that an early settlement on the boundary question serves the fundamental interest of our two countries President Hu
"We will endeavour to raise the volume of bilateral trade to $40bn by 2010 and encourage two-way investment flows," the Indian prime minister told a joint news conference in Delhi."We will endeavour to raise the volume of bilateral trade to $40bn by 2010 and encourage two-way investment flows," the Indian prime minister told a joint news conference in Delhi.
That objective was reinforced by Mr Hu who said the two sides would "sign an agreement on investment, promotion and protection between the two countries". That objective was reinforced by Mr Hu, who said the two sides would "sign an agreement on investment, promotion and protection between the two countries".
During their talks, the two leaders had decided "to speed up the joint feasibility study on a regional trade arrangement", Mr Hu said.
Last year, China formally recognised the border state of Sikkim as part of India. The two sides also agreed to continue to work together to resolve other border issues.
A Tibetan activist is detained outside the talks venue in Delhi
Mr Hu said that that work would continue. "Pending an eventual solution to the boundary question, the two sides need to continue their efforts to work together to maintain peace and tranquillity in the border areas," he said.
Meanwhile, a number of Tibetan activists have been detained in Delhi for protesting at Mr Hu's visit and alleged Chinese atrocities in Tibet.
India now recognises Tibet as part of China, but still hosts more than 100,000 Tibetans, including the Tibetan government-in-exile led by the Dalai Lama.
Old tensions
Mr Hu arrived in Delhi on Monday evening. His four-day trip also includes a visit to the financial capital, Mumbai (Bombay).
Ties have been strained despite growing tradeTies have been strained despite growing trade
During their talks, the two leaders had decided "to speed up the joint feasibility study on a regional trade arrangement," Mr Hu said.
Last year China formally recognised the border state of Sikkim as part of India. The two sides had agreed to continue to work together to resolve other border issues.
Mr Hu said on Tuesday that that work would continue. "Pending an eventual solution to the boundary question, the two sides need to continue their efforts to work together to maintain peace and tranquillity in the border areas," he said.
Mr Hu arrived in the Indian capital, Delhi, on Monday evening. His four-day trip also includes a visit to the financial capital, Mumbai (Bombay).
"The purposes of my visit to India is to strengthen our friendship, increase our mutual trust, expand our co-operation and chart a course for the future," Mr Hu told reporters ahead of his talks with Mr Singh.
Rising trade between two of the world's fastest growing economies is encouraging vastly improved ties, the BBC's Sanjoy Majumder in Delhi says.Rising trade between two of the world's fastest growing economies is encouraging vastly improved ties, the BBC's Sanjoy Majumder in Delhi says.
Trade between the two countries is expected to touch $20bn by next year. In the 1990s it was only about $250m. Annual bilateral trade which was worth only about $250m as recently as the 1990s has mushroomed in recent years.
Our correspondent says that mutual economic interests are often undermined by politics, given that the two countries have ambitions of being the unrivalled regional superpower. But our correspondent says that mutual economic interests are often undermined by politics, given that the two countries have ambitions of being the unrivalled regional superpower.
Local traders have welcomed the opening of border trade The Asian giants fought a brief border war in 1962, which ended with a decisive victory for the Chinese, an event which many Indians still view as traumatic.
Recently, China's ambassador to India renewed an old controversy over India's border state of Arunachal Pradesh, saying it was a part of Chinese territory. India's border state of Arunachal Pradesh is still claimed by China, while India lays claim to the Aksai Chin region in the north of Kashmir, which is administered by China.
India's Foreign Minister Pranab Mukherjee rejected the claim, saying Arunachal Pradesh was an "integral part of India".
The dispute dates back to a military conflict in 1962.
India also lays claim to the 38,000 square kilometre Aksai Chin region in the north of Kashmir, which is administered by China.
India and China fought a brief war in 1962, with a decisive victory for the Chinese, an event which many Indians still view as traumatic.
Pakistan relationship
Delhi is also suspicious of China's relationship with its long-time rival Pakistan - which Mr Hu is due to visit after his trip to India.Delhi is also suspicious of China's relationship with its long-time rival Pakistan - which Mr Hu is due to visit after his trip to India.
China, meanwhile, is concerned about Delhi's growing ties with Washington, especially the landmark nuclear agreement between the two which allows India access to civilian nuclear technology. China, meanwhile, is concerned about Delhi's growing ties with Washington, especially a landmark nuclear agreement which allows India access to civilian nuclear technology.
The Tibetan government-in-exile, led by the Dalai Lama, is hosted by India and is based in Dharamsala in the country's north-western state of Himachal Pradesh.
A leading Tibetan activist said last week that police had banned him from leaving Dharamsala while Mr Hu was in the country.
Both India and China have produced staggering economic growth in recent years, but India continues to lag behind on many fronts, correspondents say.Both India and China have produced staggering economic growth in recent years, but India continues to lag behind on many fronts, correspondents say.
China has a literacy rate of 95%, compared to India's 68%. India's exports of manufactured goods in the financial year ending this March was $71bn, compared to $713bn for China. China has a literacy rate of 95%, compared with India's 68%. Indian exports of manufactured goods in the financial year ending last March were valued at $71bn, compared with $713bn for China.