The festering boundary row and issue of trade deficit figure prominently in talks between visiting Premier Li Keqiang and Indian Prime Minister Manmohan Singh in New Delhi on Sunday as the Chinese leader arrived in India on his maiden overseas tour since taking over in March.
Manmohan Singh raised the boundary issue firmly in his informal talks with Li at his 7, Race Course Road residence in the evening ahead of a private dinner he hosted, said informed sources.
During their restricted talks, Manmohan Singh is also believed to have flagged India's concerns about China constructing dams on the Brahmaputra in Tibet which could severely affect water flow in downstream India.
He raised the issue of trade deficit. The prime minister is said to have articulated the issues in a "constructive but firm manner", the sources said.
The Chinese premier, who arrived in the afternoon on a three-day visit, is visiting India days after a Sino-Indian border stand-off was resolved. Chinese troops intruded some 19 km inside the Line of Actual Control (LAC) - the de-facto border - April 15 and pitched tents.
The row ended May 5 after several rounds of negotiations - military and diplomatic - with both sides reverting to the position that existed before April 15.
The dinner for Premier Li was attended by Congress chief and United Progressive Alliance chairperson Sonia Gandhi, her son and Congress vice president Rahul Gandhi, External Affairs Minister Salman Khurshid and BJP leader Sushma Swaraj and Arun Jaitley, said sources.
On Monday, both sides are to hold formal talks.
Li, on arrival, said that China regards India as an important partner and friend and it serves their bilateral interests and for the world to coexist peacefully.
China, he said, regarded India as an important partner and friend. "I am looking forward to exchanging views with Indian leaders on bilateral ties and regional and global issues of common concern," he added, reported Xinhua news agency.
On Monday, Li will hold delegation level talks with the prime minister at the Hyderabad House after which the two sides are expected to sign agreements on cooperation in trade, agriculture, environmental protection and culture.
Li is heading an 80-member delegation that includes Foreign Minister Wang Yi. On Tuesday he goes to Mumbai, from where he will go to Pakistan, Switzerland and Germany.
Li had last visited India 27 years ago at the head of a youth delegation and has said he has fond memories of that trip.
Xinhua news agency Saturday said the choice of India as the first leg of Li's maiden overseas visit has sent out a clear signal that Beijing's new leadership prioritizes enhancing ties with New Delhi.
But it warned that "the two nations cannot fully restore mutual trust without resolving the border dispute".
The Chinese embassy has been fortified to foil possible protests by Tibetan residents.
The Taj Palace Hotel, where the Chinese leader is staying, has been made out of bounds for visitors with several layers of police check posts.
India is home to some 100,000 Tibetans including the Dalai Lama, who is now in the US.