India and China are close to inking an agreement on setting up of industrial parks.

On Saturday, following a bilateral meeting between the two sides, Foreign Secretary Sujatha Singh told mediapersons here that both countries had agreed that a growing trade deficit was unsustainable.

Without giving out the specifics, she said India was eyeing an investment of $1 trillion by China. “If trade and investment between the two countries have to grow, we need to work towards reducing the trade deficit,” she said.

The details of the industrial parks will be fleshed out at a meeting between Minister of State for Commerce Nirmala Sitharaman and her Chinese counterpart in Beijing on Monday. New Delhi is keen to address the nearly $40 billion trade deficit with China.

Indian Ambassador to China Ashok K Kantha said the issue of correcting trade imbalance was reaffirmed at the meeting between Vice-President Hamid Ansari and Chinese Premier Li Keqiang. Given China’s track record in manufacturing, India was keen to seek its involvement. Mr. Kantha said the focus would be on broad-basing economic engagement with China and enhancing two-way investment flows.

India wants greater market access to cut the deficit. The Narendra Modi government is keen to reinvigorate the manufacturing sector to create more jobs and give a fillip to the economy.

The issue of setting up of industrial parks came up during the recent visit of Chinese Foreign Minister Wang Yi to India and his meeting with his counterpart Sushma Swaraj.