Modi broaches contentious issues with China, including trade deficit

India - China relations are usually described in New Delhi as a tangle of cooperation, competition and contention. The three day visit of Prime Minister Narendra Modi to China, which concludes Saturday, has been marked by continuity rather than any big bang breakthrough in bilateral relations; with the two sides inking 24 agreements today to consolidate aspects of cooperation in what Modi termed as a "complex relationship in recent decades".

But Modi, it would seem, was forthright in broaching some of the contentious issues, like the increasing trade deficit. The PM said he stressed the need for China to "reconsider" its approach on some of the issues that hold the two neighbours back from realizing full potential of the India-China partnership - a reference to Beijing issuing stapled visas to residents of Arunachal Pradesh. "I suggested that China should take a strategic and long term view of our relations," he said at a joint media interaction with Chinese Premier Li Keqiant after their talks.

On the boundary question, the two sides agreed to work towards an early "political settlement" and also decided to bolster their confidence building measures, including increasing their border meeting points from the existing four. The PM said he reiterated the "importance of clarification of the Line of Actual Control (LAC) in this regard". The India-China LAC is not clearly demarcated, leading to 'intrusions", one of which caused some embarrassment to Modi when the Chinese Army units intruded into the Ladakh sector just as the PM was hosting Chinese President Xi Jinping in Ahmedabad in September, 2014.

The PM also sought "tangible progress" on issues relating to visa policy and trans-border rivers. The PM also discussed some of New Delhi's regional concerns, particularly those with Pakistan. Modi announced that India will give Chinese tourists e-visas.

The PM termed India-China as one of the most important strategic partnerships as the "re-emergence of India and China and their relationship will have a profound impact on the two countries and the course of this century", that the relationship should be made a "source of strength" and mutual trust strengthened.

The joint statement, signed after Modi's 90-minute delegation level talks with Li, stressed the "imperative of forging strategic trust", and the two sides will work for more frequent meetings at the leadership level. It will be Indian states and Chinese provinces that are likely to lead this cooperation with the two sides instituting a state/provincial leaders' forum.

As for points of cooperation, the agreements signed today covered a wide array of sectors from space, nuclear energy, developing smart cities, Chinese help to speed up Indian railways and skill development. In a joint statement on climate change, the two sides agreed they had similar concerns on the issue and appealed to the developed world to meet its historical commitments.

The PM identified the two Chinese industrial parks in Gujarat and Maharashtra as evidence of collaboration. The PM will be in Shanghai on Saturday, the last day of his three day visit, where 20 pacts worth $ 10 billion in the private sector are expected to be signed.

Modi said he also took up the issue of the growing trade deficit. The joint statement stated that the Chinese side will look into skewed balance of trade by constituting a task force look into the issue. This will include cooperation on pharmaceutical supervision, speedier phytosanitary negotiations on agro-products, stronger links between Indian IT companies and Chinese enterprises and address issues pertaining to tariff reduction of Indian production in the framework of Asia-Pacific Trade Agreement. The trade imbalance has touched $38 billion, which is a major concern for India. "Both sides will make full use of the India-China Joint Economic Group to work on this," the joint statement said.

The highlight of the visit of the Indian PM to China has been the stress on India-China civilizational links, whether by a visit to a Buddhist temple in Xian with Chinese President Xi Jinping on Thursday, or when Modi and Chinese Premier Li Keqiang attended a Yoga-Taichi demonstration event in Beijing today. The two sides also signed an agreement to co-produce a film on Monk Xuan Zang, who, Modi said, had visited his hometown 1,400 years ago, and another agreement where India will help set up a yoga college and a centre for Indian and Gandhian studies in China.

At his lecture at the Tsinghua University today, Modi said India and China should address issues that lead to hesitation and doubts, even distrust. "It should do so in a manner that transforms our relationship and not cause new disruptions." He underlined that the two countries need to be "sensitive to each other's interests" and "think of creative solutions to issues that have become irritants -- from visa policies to trans-border rivers".

Modi had raised concern with Chinese President Xi Jinping over China's US $ 46 billion proposed investment in Pakistan-occupied Kashmir.

Li said, "We do not deny that there are some disagreements between us but there is a mechanism and sufficient political maturity to address them." He said the two countries need to uphold peace and tranquility. "We stand ready to work with India to bring China-India relations to new heights," he said.

China said that it understands and supports India's aspiration to play a greater role in the United Nations including in the Security Council.