India, China to talk investment in energy, rlys during Xi Jinping's visit

Beijing is set to loosen the purse strings and step up economic ties with India with a slew of investments in infrastructure projects during president Xi Jinping's upcoming India visit. China also wants to work closely with New Delhi to bring the world's two biggest markets together, sources said.

Agreements on major Chinese investment in industrial parks, infrastructure, energy and railways sectors are expected to be signed after Xi's meeting with Prime Minister Narendra Modi.

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Both sides, however, are conscious of the complex boundary issue, which could potentially act as a dampener in bilateral ties.

Sources indicated India and China have decided to keep the matter under check, hoping an incident-free border will provide the necessary political capital to build on economic ties, one of PM Narendra Modi's foreign policy priorities.

The three-day trip will begin on a symbolic note with Xi travelling to Modi's home state of Gujarat on September 17. Modi will throw a private dinner for Xi on the banks of the Sabarmati river the same night, following which the Chinese President is set to fly to Delhi.

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He will spend the next day in the Capital before leaving India on September 19. Foreign secretary Sujatha Singh has already visited Ahmedabad to fix arrangements for Xi's visit, in consultation with the state administration.

A second route for the Kailash Mansarovar Yatra pilgrims, greater understanding on trans-border river issues and ways to increase cultural ties are on the agenda.

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New Delhi is also set to work on China's proposal to be a founding member of the Asian Infrastructure Investment Bank, Beijing's alternative to the Asian Development Bank that is controlled by the US and Japan.

Beijing has a record foreign exchange reserve of $3.95 trillion and plans to invest $500 billion of it overseas.

New Delhi expects to receive a share of the investment.

An increase in Chinese investment will also help India offset its ballooning trade deficit with its neighbour.