China to invest USD 20 billion in Indian infrastructure over next five years

China has agreed to invest 20 billion dollars in India's infrastructure sector over the next five years.

The investment pact is one among twelve agreements signed between the two governments after delegation-level talks held at Hyderabad House here this afternoon.

China is one of India's top trading partners. Under the proposed investment, China is set to help bring India update its ageing railway system with high-speed links, and also contribute substantially to other manufacturing and infrastructure projects.

On Wednesday, both sides signed three memoranda of understanding, including one to set up a Chinese-backed industrial park in Gujarat.

A BBC report says that China is looking for new offshore manufacturing bases as it faces growing labour costs and other issues at home.

Indian and Chinese companies have also signed preliminary deals worth over USD three billion in aircraft leasing and telecoms, among other sectors.

Despite prevailing tensions on the Line of Actual Control (LAC), trade between India and China has risen to almost USD 70 billion a year.

India's trade deficit with China has climbed to over USD 40 billion from USD one billion in 2001-2002.