Indo-Chinese trade is expected to exceed $17 billion by the end of the year, Indian trade analysts said Thursday.

"It is an interesting development. My opinion is that China is all set to become the largest trading partner of India in the next two or three years," said Onkar Kanwar, President of the Federation of Indian Chambers of Commerce and Industry (FICCI), a key Indian trade body.

"It is just the beginning," he said, referring to present Indo-Chinese trade growth. The FICCI President predicted $30 billion bilateral trade between India and China.

India has set up a target of $20 billion trade with China by 2008. Trade analysts say the $20 billion trade target with China is not ambitious, but there are problems as the recent efforts of the Indian and Chinese governments to bring about mutually rewarding economic cooperation has not yielded desired results because there is difference of opinion on the trade balance in 2003 or 2003-04.

During this period trade figures were $1 billion, which makes the $20 billion by 2008 target unachievable.

"The Indian statistics have all the signs of having been hastily cooked up for dishing out on the occasion. Successive Economic Surveys of finance ministry do not once mention China in their table on Trade Direction," said Sudhanshu Ranade, a trade expert at the Business Line newspaper.

He said India might well achieve what it says it desires on the trade front. "But, looking back, in 2008, we may still find ourselves feeling frustrated that things have not turned out quite the way we expected them to," Ranade said.

The two Asian giants formed a Joint Study Group to explore the possibility of increasing trade between the two countries in 2003 after the first Joint Declaration was signed between then Indian Prime Minister Atal Behari Vajapyee and his Chinese counterpart during a visit to China.

The JSG held its fist meeting in Beijing March 22-23, 2004 and discussed measures for comprehensive trade and economic cooperation between Indian and China.

"Senior officials from India and China had also discussed the possibility of signing a Free Trade Area and Comprehensive Economic Cooperation Agreement," said a senior Indian foreign Ministry official attached to the China desk.

The JSG was to submit its report to the two governments by end of June last year. The report has not yet been handed over to the respective governments.

Indian Prime Minister Manmohan Singh expressed concern over the delay in submitting the JSG report at the East Asia summit in Kuala Lumpur.

India opened a border point called the silk route in northern state of Sikkim to boost road trade between two countries. This historic route was closed after India lost a war in 1962.

New Delhi had also severed all diplomatic relations with China. Normal relations were restored when Indian Prime Minister Rajiv Gandhi visited Beijing in 1992.

India and China have been exploring all possible areas of bilateral trade since New Delhi opened up its economy for foreign investment in 1991.

"There are strong economic complementarities between China and India with a bright future for economic cooperation," said a Chinese diplomat posted in New Delhi.

A sharp increase was registered in border trade between the two Asian powers. "The Indo-China border trade has also picked up and the growth in trade is indicative of the strengths of the two countries for achieving new heights,"said junior Indian finance minister E.V.K.S. Elangovan.

India and China have reached the advanced stage of efforts to finalize a Regional Trade Agreement to raise their two-way trade to $50 billion by 2010.

Trade between the two countries stood at $13.6 billion at the end of November.

"The proposed RTA will be similar to any other free trade agreement and will take into its fold as many as 52 items for developing a joint and strategic business partnership between two nations and lead to establishing a manufacturing base for both countries in each of their respective territories," said Sun Yuxi, Chinese Ambassador to India.

"It is a positive trend and we strongly believe India and China will be largest trading partners," said N. Srinivasan, general secretary of CII.

Indian trade associations feel while trade between India and China will increase, the United States will continue to be major partner for both. Bilateral trade between China and the United States stands at $210 billion.

India sought Chinese support at the World Trade Organization meeting in Hong Kong. The two Asian giants, who are both members of the G20, stood up to the United States and European Union, demanding that the manifestly unfair trading system in agriculture should not be perpetuated.

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