China and India will see great potential in economic cooperation in the future, Montek Singh Ahluwalia, deputy chairman of the Planning Commission of India said Tuesday at the Boao Forum in China's Hainan Island.

"As to investment, I think we can do more. We do have Chinese companies invest in China, Huawei for example, has a big outlet in South India," Ahluwalia told China.org.cn in an exclusive interview.

Chinese telecom equipment maker Huawei is setting up a new campus for its research and development center in Bangalore with an investment of US$150 million. The campus will be the biggest of the telecom firm outside China, according to Huawei India Deputy Director of Enterprise Marketing of Suresh Vaidyanathan.

As part of the company's successful localization efforts, all of Huawei's Chinese staff working in India have adopted India names, according to reports.

"Many India companies are investing in China now. We need more investment from both sides," said Ahluwalia.

Sino-India trade reached US$60 billion in 2010, and then grew to US$74 billion last year. The trade between the two countries is expected reach US$100 billion in 2015.

Some economists are predicting that Sino-India trade has the potential to reach US$1 trillion by 2025.

A high level Indian delegation would visit China next month to streamline mutual investment opportunities between the two countries and discuss steps to remove impediments in this regard, Ahluwalia said.

The two countries formed working groups under the first India-China Strategic Economic Dialogue in Beijing last year.

Some Chinese companies voiced worries over their technicians facing difficulties to get India visas. In response, India has called for greater market access for its IT and pharmaceuticals companies.

Ahluwalia said India needed "to make a very clear judgment" about its policies towards Chinese investments, which have been held up in some sectors on account of security concerns.

"We are looking at a country that in 20 years' time is going to [have] the largest GDP in the world. It just does not make sense for us to not be linking up with China," he said. "Both China and India are big energy buyers in the world. We have common interests. We can join hands in increasing the transparency in the market."
 
Montek Singh Ahluwalia, deputy chairman of the Planning Commission of India, attends a panel discussion at the Boao Forum in China's Hainan Island on April 3, 2012. [Photo by Wang Zhiyong/China.org.cn]

Both China and India are facing common problems including water shortage and urban management and should learn from each other, Ahluwalia said.

According to reports, China will begin increasing wages by an annual rate of 13 percent in order to increase domestic consumption. As a result, higher labor cost could slow down its labor-intensive manufacturing industries. Meanwhile, India is planning to take over the manufacturing of shoes and textile from China as part of its industry developing blueprint.

India's economic growth is expected to be between 8 and 8.5 percent during its 12th five-year development plan period from 2012 to 2016, Ahluwalia said.

To achieve this growth, India would need 6.5 percent more energy every year, and Ahluwalia said energy constraint was one of India's big challenges.

He said insufficient infrastructure is another challenge India faces. By 2030, 600 million India people are to move into cities, 400 million new urban dwellers in coming 20 years. "India needs to invest US$1 trillion in its infrastructure construction," said R. V. Kanoria, President of the Federation of Indian Chambers of Commerce and Industry.