India and China talk trade deficit at high level talks
27 August 2012 Last updated at 02:12 BST
India and China commence high level economic talks today in New Delhi, with the focus likely to be on Indian concerns that the Chinese are benefiting more out of their trading relationship.
India's trade deficit with China jumped 42% to $40 billion in the last financial year.
Leif Eskesen from HSBC, tells the BBC's Asia Business Report that part of the deficit is caused by Indian companies buying Chinese machinery to develop various industries.