The Indian media, for one, have strongly suggested the government export a variety of products to reduce the enlarging trade deficit.

The trade imbalance came mainly from an inequality in India's trade structure. Indian exports to China, it has been noted, are mainly primary products, with minerals and agricultural products representing more than half the total. By contrast, Indian imports are largely machinery products, chemical products, metal products, fibers and textiles from China.

In other words, what Indians export to China are resource-intensive, or labor-intensive products, while what they import from China are manufactured goods with high added value. This trade structure, in turn, leads to a limited market share of Indian goods in China and a great risk of trade deficit.

Indian media argue that if the rapidly growing trade deficit cannot be solved properly, the huge trade imbalance between the two countries will become a big obstacle for China-India economic and trade cooperation.

India's conservative market access system, meanwhile, remains another obstacle. Although it has carried out economic reforms for many years, the Indian economy is still domestically oriented.

When it comes to trade protectionism, India is a forerunner around the world. Except an average duty of nearly 30 percent on manufactured goods, India keeps a series of extra charges, coupled with complicated non-tariff measures.

This includes non-standard trade dispute legislation and lack of transparency in resolving trade disputes. And although India has lowered its tariff rates in recent years, the rates remain quite high. High tariff rates have thus stopped the import of Chinese goods to some degree.

India's domestic investment atmosphere features onerous administrative interventions, excess formalities and low efficiency—factors that could hinder the further development of Chinese-Indian economic and trade relations.

Frequent trade disputes

Trade imbalances lead to trade disputes. Since the outbreak of the financial crisis, in particular, India has taken a series of measures to crack down on Chinese goods, including a ban on Chinese toys, and a number of anti-dumping lawsuits against other Chinese goods. New Delhi, meanwhile, has also imposed safeguard tariffs on Chinese goods, such as aluminum shields.

According to statistics of China's Ministry of Commerce, India launched 17 trade investigations, including anti-dumping and countervailing investigations from October 2008 to February 2009.

The investigations covered a wide range of goods, including industrial salt, iron and steel, auto parts, coal products, porcelain, textiles and rubber products, which led to a total loss of $1.5 billion for Chinese merchants. Indeed, such frequent frictions have expanded to hinder overall trade between the two countries, while creating obstacles for their negotiations on a free trade area.

Statistics from China's Ministry of Commerce show that, in the past seven years, Chinese-Indian trade volume has enjoyed an average annual increase of 45 percent. Among all of China's main trade partners, India retains the highest growth rate in trade volume with China.

In fact, China and India have started regular trade talks to resolve disputes in a timely fashion. As economic exchanges are a reliable means of establishing confidence in promoting China-India relations, both countries' top leaders have pledged to give priority to them when expressing good will.

Both China and India anticipate expanding bilateral trade, establishing a trade alliance both inside and outside the World Trade Organization and pursuing a larger part in the newly emerging international economic order.

But only if the two countries make joint efforts to support, preserve and enhance the level of current economic exchanges can a mutually beneficial agreement truly be reached.