India and China hold first major talks since Narendra Modi win

Visiting Chinese Foreign Affairs Minister Wang Yi (left) shakes hands with Indian Minister for External Affairs Sushma Swaraj during a meeting in New Delhi on June 8, 2014. India hailed talks with China on Sunday as a good step towards stronger
Visiting Chinese Foreign Affairs Minister Wang Yi (left) shakes hands with Indian Minister for External Affairs Sushma Swaraj during a meeting in New Delhi on June 8, 2014. India hailed talks with China on Sunday as a good step towards stronger ties in the first high-level meeting of the rival Asian giants since Indian Prime Minister Narendra Modi took charge. -- PHOTO: AFP

NEW DELHI (AFP) - India hailed talks with China on Sunday as a good step towards stronger ties in the first high-level meeting of the rival Asian giants since Prime Minister Narendra Modi took charge.

China's Foreign Minister Wang Yi met his Indian counterpart in New Delhi during a two-day visit to build relations with the right-wing Modi government which came to power last month on a pledge to revive the economy.

Foreign ministry spokesman Syed Akbaruddin said talks between Wang and India Foreign Minister Sushma Swaraj on economic and other issues were "productive and substantive".

"All issues of significance were raised and discussed in a frank and cordial manner," Mr Akbaruddin told reporters. "In our view this is a productive beginning between the new government of India and the Chinese government," he said without giving details.

The talks focused on trade ties but also touched on a border dispute between the nuclear-armed neighbours that has soured relations for decades.

Mr Wang is expected on Monday to meet Mr Modi, who has extended olive branches to traditional rivals China and Pakistan since coming to office despite his hardline nationalist reputation.

Mr Modi has invited Chinese President Xi Jinping to visit later this year, an offer that Mr Wang told India media had been accepted.

Mr Wang told the Hindu newspaper he had travelled to the capital as a special envoy of Mr Xi to "cement our existing friendship and explore further cooperation".

"China is ready to work with our Indian friends for an even brighter future of our strategic and cooperative partnership," Wang said in an interview with the newspaper published Sunday.

Analysts say Mr Modi's landslide election win has given him a mandate for more assertive foreign policy than the previous government. He held talks with his Pakistani counterpart last month after inviting leaders of regional neighbours to his inauguration.

Mr Wang, who arrived early Sunday, shook hands with Swaraj and waved to media outside government offices before heading inside.

China is India's biggest trading partner with two-way commerce totalling close to US$70 billion (S$ 87 billion). But India's trade deficit with China has soared to over US$40 billion from just US $1 billion in 2001-02, Indian figures show.

Experts say Mr Modi must bridge the deficit by seeking greater access to the Chinese market, with the two sides targeting annual bilateral trade of US$100 billion by 2015.

Relations however are still dogged by mutual suspicion - a legacy of a brief, bloody border war in 1962 over the Indian northeastern state of Arunachal Pradesh.

Mr Modi warned China to shed its "expansionist mindset" at an election rally earlier this year. China hit back, saying it "never waged a war of aggression to occupy any inch of land of other countries".