India and China are close to a deal that could boost trade between the two countries by more than $1.3 billion, the Wall Street Journal reported, citing people familiar with the talks.
China is the world’s second-largest consumer of Indian goods and services, accounting for around 10% of India’s GDP, while the two nations share a long history of trading.
The two countries are in a standoff over China’s territorial claims in the disputed South China Sea, which Beijing considers a vital trade route.
India, which accounts for about half of global trade, would get the bulk of the trade increase, but China could also gain, the people familiar said.
The deal could be finalized within months.
The WSJ report did not name the people involved.
A spokesperson for the Indian government did not immediately respond to a request for comment.
Ahead of a bilateral meeting in Beijing next month, the two sides will discuss ways to boost trade in sectors including goods, technology, services and agriculture, according to a government statement.
The talks will focus on ways to deepen cooperation and facilitate the free flow of goods and people between the nations, the statement said.
India, a major trading partner, has said it will not pay any tariffs on Chinese imports.
The trade agreement has been a major stumbling block in the recent diplomatic row between India and Beijing.
India is seeking to increase its trade with China from $20 billion a year in 2018 to $100 billion by 2020.
India and the United States are locked in a territorial dispute over China.
Last year, India imposed a tariff on Chinese goods worth $5 billion on behalf of the Chinese company, the World Bank said.