Prime Minister Manmohan Singh met Chinese President Hu Jintao in Yekaterinburg on Monday night, setting the tone for the talks between their Special Representatives on boundary question on August 7.
Singh met Hu soon after his arrival for the Summits of Shanghai Cooperation Organisations (SCO) and Brazil-Russia-India-China (BRIC), which will begin from Tuesday.
The two leaders discussed ways to take forward their relations, particularly in trade and economic field, during the second tenure of Singh as Prime Minister.
The Special Representatives of the two countries -- National Security Adviser M K Narayanan and Chinese State Councillor Dai Bingguo -- will be meeting in New Delhi on August 7 and 8 to discuss a solution to the boundary issue that has been plauging the ties for decades, sources said.
The two special representatives have made progress but India feels that "much more" can be done to address the vexed issue.
Sources noted that India was satisfied that peace has been maintained on the border as the special representatives continue their task.
The meeting will be the 12th round of talks between the special representatives of India and China, a mechanism which was set up six years back to find a political settlement of the border issue.
India says China is illegally occupying 43,180 sq km of Jammu and Kashmir, including 5,180 sq km illegally ceded to Beijing by Islamabad under the Sino-Pakistan boundary agreement in 1963.
On the other hand, China accuses India of possessing some 90,000 sq km of Chinese territory, mostly in Arunachal Pradesh.
While expressing satisfaction over substantial increase in bilateral trade which touched 52 billion dollars last year, India has some issues with China over dumping of cheap goods and access to fruits and vegetables.
There are also concerns in India over circulation of Chinese drugs in some foreign markets which are faked as Indian goods. In view of these issues, sources said, India is seeking an urgent meeting of the Joint Group on Economic matters.
India has already strict anti-dumping rules in place against Chinese goods, aimed at protecting the domestic market.
Commenting on these aspects of the relationship, source said India and China will continue to have "competition as well as cooperation" as they grow.
However, government of India does not believe that China is a "threat" and feels it would be an "extreme" term to be used.
Inference in this direction was to the comments made by outgoing IAF chief Fali H Major and another IAF official who described China as the "greatest threat" to India. Sources said their comments should be treated only as "individual" assessment and not the position of government of India. Defence Minister A K Antony has reprimanded Major and the other official for making such comments, they said.
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