Prior to Xi Jinping's recently concluded state visit to India, soaring expectations obscured some of the realities with regard to the signing of important trade, investment and commerce-related agreements. Given that China is the No1 trading partner for some 120 economies around the world, it is obvious that trade, investment and infrastructure have become buzzwords on the road to deepening Sino-Indian ties. However, also being debated vociferously is whether trade and investment will become the driving force for future relations, given the pressing strategic realities, including the interminably unresolved border dispute. Nation states are more likely to favour a cooperative framework through economic ties and multilateral institutions. In this way, Xi has reason to seek better ties with India, given China's need for infrastructure markets for its manufacturers. Reports that Beijing plans to invest around US$500 billion overseas in the next five years led to improbable reports of big-ticket investments coming India's way, probably exceeding US$100 billion. Even the Chinese consul general in Mumbai dropped hints of such a figure, and these numbers drew direct comparisons with Japanese Prime Minister Shinzo Abe's earlier announcement that Tokyo would double private and public investment in India to US$34 billion over the next five years. As a result, this turned the entire debate into a three-way, China-India-Japan triangle and an ongoing contest in Asia. So when China finally announced a US$20 billion investment package for India over the next five years, it was received with a fair bit of disappointment from the trade and investment sector. India's bilateral trade with China has grown, from US$34 billion in 2007 to US$67 billion by the end of 2012, essentially by means of exporting low-value-added products to China and importing high-value-added and technologically sophisticated products from China. Sustained high growth rates in both economies have been the foundation of India-China trade ties. Nevertheless, talk of managing sustainability and balanced trade needs to be seen against the backdrop of India's huge trade deficit, underscoring the fact that economic cooperation with China has its share of problems. Excess consumption against production could lead to an unsustainable current account deficit, and India continues to be hurt by the growing trade deficit with China, which stood at a record US$36 billion for the fiscal year 2013-14. Such concerns reverberated amid the signing of the five-year trade and economic development plan, which advocates the promotion of balanced and sustainable economic development, most importantly focusing on the reduction of the trade imbalance. India's imports from China are primarily capital-intensive, while exports mostly focus on semi-finished products principally in four sectors - textiles and clothing, followed by mining, base metals and chemicals. New Delhi's exports to China constitute a small proportion of China's overall imports. As an emerging nation with a large demand for imports to meet growing domestic consumption, India can benefit greatly from Chinese capital investments that could further boost its industrial sector, thus accelerating India's dream of an infrastructure revolution. However, the undervaluation of the renminbi poses concerns in India, especially when both nations are competing for market access for the same products. Revaluation of the Chinese currency would be one way to improve India's export prospects in a few sectors at least. The government of Narendra Modi is walking a tightrope as it juggles domestic and external economic management. Modi has long been on the lookout for international collaboration in two key areas: infrastructure and investment. Of these, the most prominent is the development of high-speed railways, visible in the signing of over a dozen memorandums of understanding between China and India. Strengthening collaboration in space exploration, including research and development of scientific experiments and satellite technology, has emerged as another avenue for Sino-India cooperation. In the constant struggle between expectations and what is actually possible in international politics, economic convergences are often confronted with geostrategic realities. China-India relations are no different in this respect. The need of the hour is to seek out the positive aspects of the relationship and link developmental goals in a mutually beneficial way, with an emphasis on ironing out the strategic and economic wrinkles through enhanced political dialogue and consultation at all levels. Dr Monika Chansoria is a senior fellow and head of the China-study Programme at the Centre for Land Warfare Studies, New Delhi