NEW DELHI - Indian and Chinese leaders at an informal summit Saturday sidestepped their differences and said they will tackle a huge trade deficit that has been troubling India, and enhance measures to strengthen border security.
In the coastal heritage town of Mamallapuram in southern India, where the two leaders met, Indian Prime Minister Narendra Modi said that "we have decided to manage our differences prudently," and not let them become "disputes." He said both sides will remain sensitive to each other's concerns so that the relationship "will be a source of peace and stability in the world."
Without elaborating, Chinese President Xi Jinping said "we have engaged in candid discussions as friends," as they sat down for talks.
Their sharp differences over the disputed region of Kashmir that came to the fore in the weeks ahead of the summit did not figure into the one-on-one talks held for several hours between Xi and Modi, according to Indian officials.
China has strongly backed Pakistan in raising strong objections to India's move to scrap autonomy in the disputed Himalayan region, angering New Delhi, which says it is its internal affair.
Saying that there had been "visible progress" since Modi and Xi held their first informal summit in China last year, Indian Foreign Secretary Vijay Gokhale told reporters that the summit had underlined that "there is no fundamental disruption and there is a forward-looking trajectory," in their ties.
The informal summits are aimed at getting past decades of mistrust that have dogged their ties since they fought a war in 1962. Parts of their borders are still disputed and both sides claim parts of each other's territories.
The immediate focus appears to be on addressing a $55 billion trade deficit in Beijing's favor that is a huge irritant for India, especially as it is grappling with an economic slowdown.
The two countries will establish a high-level economic and trade dialogue led by senior leaders to improve business ties and better balance their trade.
Calling the trade deficit economically unsustainable for India, Gokhale said "there is a very significant market in China and we need to find ways in which we can enhance exports and China can increase imports."
Gokhale said Xi had welcomed Indian investment in pharmaceuticals and textiles - areas in which New Delhi has been seeking market access.
"China is ready to take sincere action in this regard and discuss in a very concrete way how to reduce the trade deficit," he said.
Indian officials also said that both leaders also resolved to work together in facing the challenges of radicalization and terrorism, which continues to pose a common threat.
The Chinese leader has invited Modi for a third informal summit in China.
From India, Xi travels to Nepal, the tiny Himalayan country wedged between the two Asian giants. The first visit by a Chinese head of state to Nepal since 1996 comes as the two develop closer ties, raising some concern in India, which worries about Beijing's growing influence in its immediate neighborhood.
Kathmandu hopes to sign agreements to begin infrastructure projects under Xi's signature Belt and Road Initiative, which India has stayed away from but Nepal has joined.