Prime Minister Manmohan Singh on Sunday asked the domestic industry to engage China and to learn to both compete and cooperate from it. At the same time, India Inc sought his intervention for the early removal of trade and non-trade barriers to reverse the adverse trade deficit, which touched a record US$ 8.6 billion last year.

"Indian business is ready to face the brave new world of globalisation. China is an important part of that brave new world. We must engage China and learn to both compete and cooperate," Singh, who began a three-day maiden visit here, said at a brainstorming session with the business delegation accompanying him, ahead of the Sino-Indian business summit on Monday.

Urging Indian business to think big, the Prime Minister asked the industry leaders to study China and to identify opportunities for business and greater engagement, stressing that their was enough space in the world for both countries to continue to grow.

At a time when there are concerns about a global economic slowdown, China and India can sustain global growth through their own development, Singh said.

Singh observed that a large part of the thinking in India about China is shaped by western views of China, and that there is need for greater investment in India in a better understanding of the processes of change in China.

CII President Sunil Bharti Mittal said that the industry leaders raised the issue of certain trade-related barriers faced by sectors like pharmaceutical industry on issues like generic product registration in China. "We sought the Prime Minister's help in this regard," Mittal said after the 45-minute interaction with Singh.

The business leades told Singh that they had overcome fears about Chinese imports but there were still areas of concern like very low-priced products from China which were creating problems for Indian industry.

The Indian industry's concerns come against the backdrop of the burgeoning trade surplus to the tune of US$ nine billion in China's favour in the bilateral trade which has touched US$ 38.6 billion in 2007, just short of the target of US$ 40 billion by 2010.

Singh told the meeting that  it was a historic necessity for the two great neighbours to work together. "There will be areas of competition, and there will be areas for cooperation. There is enough space in the world for both countries to continue to grow," he added.

"The rise of China and India should be viewed as an international public good by the global community, since it offers new opportunities to sustain global growth," he said.

FICCI President F Khorakiwala said the trade deficit between the two countries was significant mainly because the Chinese products were competitive and creating problems for the Indian industry. This, he felt, should be taken up as a challenge by the Indian industry.

He said trade between India and China had multiplied ten times in the last five years but investment on either side had not been very significant.

Tourism, education sector, media content relating to entertainment and services could be areas where India could take advantage, he said.

Khorakiwala said while India was open in the area of media content, there were a lot of restrictions in China. "We are asking for reciprocal rights in China," he said.

Ranbaxy [Get Quote] Executive Director Ramesh L Adige said the pharmaceutical industry wanted fast-track registration of generic pharma products in China, conforming to international standards of 12 to 18 months, as against two to three years being taken now.

Prime Minister's Secretary T K A Nair, Foreign Secretary Shivshankar Menon and Indian Ambassador Nirupama Rao attended the discussions with the industry, which was represented by CEOs including Mittal, Jet Airways [Get Quote] Chairman Naresh Goyal, NIIT [Get Quote] Chairman R S Pawar, Zee Chairman Subhash Chandra, Hero Honda Motors [Get Quote] MD Pawan Munjal, Wockhart Chairman and FICCI Secretary General Amit Mitra and IL and FS CEO Hari Shankaran.