CHINA hopes to have free trade discussions with India during the Chinese premier's visit to New Delhi starting tomorrow.

"The free trade agreement is the next stage (of India-China relations). It is our hope that we can start the process," China's envoy to India, Zhang Yan, told reporters in New Delhi yesterday.

"We are very much positive on these issues. I think that in general the Indians think it is positive but need more time," Zhang said.

Premier Wen Jiabao's visit will be the first to India by a Chinese premier in four years and comes a month after US President Barack Obama's trip. French President Nicolas Sarkozy and British Prime Minister David Cameron have also visited India this year.

Assistant Chinese Foreign Minister Hu Zhengyue said everything would be up for discussion during Wen's three-day visit to New Delhi.

Wen then goes to Pakistan for another two nights.

"No issues are off the table," Hu told reporters in Beijing, adding that Wen's India trip was to expand bilateral trade, increase cooperation and promote regional peace and stability.

China and India plan to sign a series of business deals, including one agreed in October for Shanghai Electric Group Co to sell power equipment and related services worth US$8.3 billion to India's Reliance Power.

Representatives from Shanghai Electric Group Co and commercial banks would accompany the delegation to India and try to iron out financing details, said Liang Wentao, a deputy director general at the Ministry of Commerce.

He would not give a value for the total amount of deals to be signed.

India's trade deficit with China rose to US$16 billion in 2007-08 from US$1 billion in 2001-02, according to Indian customs data.

China is India's biggest trading partner, with bilateral trade expected to pass US$60 billion this year.

India has sought to diversify its trade basket, but raw materials and other low-end commodities such as iron ore still make up about 60 percent of its exports to China.

In contrast, manufactured goods - from trinkets to turbines - form the bulk of Chinese exports.

"China is not purposely seeking trade surplus over other countries." Zhang said.

"We are ready to work with countries concerned to minimize the imbalance because we know in the long run a big gap in trade is not healthy and not sustainable," Zhang added.

India's US$1.3 trillion economy lagged behind China's US$5 trillion economy in 2009, according to the World Bank and is less export-orientated. The two countries' populations are near equal.

During his trip to Pakistan, Wen will discuss regional cooperation as well as long-term development, Hu said.