New Delhi- In the first high-level interaction with the new dispensation in New Delhi, Chinese Foreign Minister Wang Yi Sunday held talks with his Indian counterpart SushmaSwaraj and discussed ways to strengthen cooperation in key areas including trade and investment.

Mr Yi, who is special envoy of Chinese President Xi Jinping, arrived in the wee hours to establish political contacts with the new Indian government amid hopes of an upswing in bilateral ties due to Prime Minister NarendraModi's familiarity with China. BothMr Yi and MsSwaraj were assisted by their delegations which comprised of senior officials from the Foreign Ministry.During his two-day visit, Mr Yi will call on President Pranab Mukherjee and MrModi tomorrow. He will also be meeting leading Indian officials and will have in-depth exchanges on how to push forward bilateral relations.

The new Chinese leadership is keen to improve relations with India in the face of serious challenges it faces over its maritime disputes with Japan in the East China Sea and with Vietnam, the Philippines and other maritime neighbors in the South China Sea amid a major US military push into the Asia-Pacific.

China is India's biggest trading partner, with two-way commerce totaling close to $70 billion. But India's trade deficit with China has soared to over $40 billion from just $1 billion in 2001-02.

Experts say Modi must bridge the deficit by seeking greater access to the Chinese market, with the two sides targeting annual bilateral trade of $100 billion by 2015.Modi warned China to shed its "expansionist mindset" at an election rally earlier this year. China hit back, saying it "never waged a war of aggression to occupy any inch of land of other countries".

The nuclear-armed nations, both with one-billion-plus populations, are expected to focus on economic ties and border issues during Wang's visit, following a territorial flare-up in April 2013.India accused Chinese troops of intruding , nearly 20 kilometers (12 miles) into Indian-claimed territory, triggering a three-week standoff that was resolved when forces from both sides pulled back.

The border between China and India has never been formally demarcated, although they have signed accords to maintain peace.

Meanwhile Tibet's government-in-exile, based in India, has pinned its hopes on Modi's government to speak up for Tibetans during Wang's visit. According to exiled Tibetan premier LobsangSangay, “This is in the interest of India as well because Tibet, as a buffer zone between India and China, has served the interests of all neighboring countries". The government-in-exile launched a renewed push this week for greater autonomy from Beijing, which has ruled the Himalayan territory since 1951.But China last week dismissed any possibility of discussions on Tibet, calling Sangay an "out-and-out separatist".

India hosts the world's largest Tibetan exile population after offering refuge to the Dalai Lama. The spiritual leader fled across the Himalayas to India after a failed 1959 uprising against Chinese rule.