Ahead of the Chinese premier Wen Jiabao visit, India has sought greater investment of Chinese companies in infrastructure despite its concern regarding security. “We would look for more Chinese investment in India especially in our growing infrastructure sector,” foreign secretary Nirupma Rao said at a FICCI conference in New Delhi.

“We need greater synergy and dialogue to explore the lessons that we could draw from the Chinese model of infrastructure development for the benefit of the business and engineering community of the countries,” Rao added.

However, India has already blacklisted Chinese telecom companies - Huawei and ZTE citing security concerns this year. The security establishment's main concern is that most of the Chinese telecom companies are headed by retired officers of the People’s Liberation Army (PLA).

India's infrastructure plans need as much as $1 trillion in investments.

Both the countries are likely to push for stronger trade ties but India’s trade imbalance with China is one of the issues. The bilateral trade between both countries was $43 billion dollars in 2009, where India’s trade deficit was $16 billion.

“The nature of current trade relations is not sustainable when India exports mainly raw materials like iron ore (more than 50 percent of its export), cotton, copper, precious stones, while it imports a huge volume of large variety of manufactured goods from China, badly affecting India’s domestic industry,” Sanjeev Kumar, research fellow at the Indian Council of World Affairs (ICWA) told Governance Now. This is tipped to be one of the contentious issues likely to come up at the meeting between Wen and prime minister Manmohan Singh.

“The development of diversified trade, tourism and investment cooperation would be crucial for reducing the trade imbalance and achieving the bilateral target of $60 billion in 2010,” said Zhang Yan, the Chinese ambassador to India.

He said, “China does not purposely seek trade surplus with other countries. In the long run, a wide trade gap is not healthy and tenable.”

Jiabao is coming with a strong business delegation (more than 400) on his second Indian sojourn as the Chinese premier.  

India is also likely to raise the issue of stapled visas to residents of Jammu and Kashmir by China. “It is being discussed between the two countries," Yan said.

Wen will arrive in New Delhi on Wednesday. Jiabao’s visit is the fourth by UN Security Councils five permanent members (the P-5) visit to New Delhi since July this year. He will be  followed by Russian president Dmitry Medvedev later this month.