A Sino-Indian free trade agreement (FTA) is expected to be high on the agenda during Premier Wen Jiabao's four-day trip to India beginning Saturday. 

It is likely to be one of the topics of negotiations to improve and facilitate bilateral economic cooperation between the two countries.

China proposed an FTA with India during State Councilor Tang Jiaxuan's visit to the country last October.

If it comes into being, the FTA will cover the largest number of people in the world.

Sino-Indian trade hit US$13.6 billion last year, up 79 percent year-on-year. China's exports to India increased 77 percent to US$5.93 billion, while China's imports from India rose 80 percent to US$7.68 billion.

But officials and trade researchers say that the rate of growth should be far higher.

Sun Yuxi, China's ambassador to India, told Indian reporters late last month that Sino-Indian trade volume was expected to register a historic high of US$30 billion in 2010 and China is expected to become India's largest trade partner in five years.

"China and India will still enjoy a vast growth potential in bilateral trade even if it reaches this figure," he added.

He said the Indian government should make a decision on the FTA issue, adding that closer economic ties between the two neighbors would lay a solid foundation for their political relationship.

Sun's view was shared by scholars.

Current trade between China and India, the sixth and the 13th largest economies in the world, fails to match their economic scale, said Li Wei, a researcher at the Chinese Academy of International Trade and Economic Cooperation, a think-tank under the Ministry of Commerce.

"The two economies complement each other to a certain extent," he said.

According to customs statistics, China mainly exports completed industrial products to India and imports preliminary products from India.

Li suggested the two governments launch preparatory work on an FTA within this year. He hoped an FTA could be established by 2015.

During his trip, Wen will visit a research and development center of Chinese telecom giant Huawei Technologies.

The premier is also expected to discuss the establishment of a coordination mechanism to avoid hostile competition between the two countries over energy, as China and India, two of the world's most rapidly developing countries, have a huge demand for energy.

"As the two biggest countries in Asia, our two countries can always be friends and partners for cooperation," Wen told a press conference at last month's annual session of the National People's Congress.

Enterprises from both sides have realized the opportunities to be gained from economic cooperation and are taking active measures to maximize these benefits.

As India is growing into one of the most attractive destinations for foreign investment, some Chinese enterprises are already making inroads into the country. Progress has been made in various sectors, such as contracting projects, technology and investment.

But experts said that the scale of bilateral investment between China and India remained limited, saying China's investment in India concentrates on the machinery, information technology and chemical industry sectors, while India's investment in China focuses on pharmaceutical and refractory manufacturing and the information industry.

(China Daily April 8, 2005)