India and the People’s Republic of China have agreed on a new trade deal that will boost the economies of both countries by up to $20 billion a year and boost bilateral trade by at least $20 trillion over the next 15 years.
The deal was reached during a meeting between the two leaders on Monday in New Delhi.
This will be the first time that trade between the world’s two largest economies has been discussed at such a high level, a statement from the Indian foreign ministry said.
The two sides agreed on the framework for trade, investment and finance, a senior Indian official said.
“The framework was a step forward and the final decision will be taken after consultations with the United States,” said the official.
The US has also been the main backer of India’s trade with China, with the two countries trading $3.4 billion each last year.
The Indian side of the deal aims to boost exports to China by $20bn over the period of 15 years, while boosting China’s exports to India by $40bn, the statement added.
India has been the world leader in its trade with Chinese goods and services for years, with China being India’s biggest trading partner.
But its growing trade relationship with China has sparked tensions between the countries.
India and China have been negotiating for years on trade and economic cooperation but the talks have largely stalled due to the ongoing protests in Hong Kong.
The two sides have also been engaged in trade war in recent months.