Trade between India and China has increased eight-fold in the last six years to almost USD 40 billion but both harbour deep suspicions of the other's strategic intentions.

Despite improvements in economic and trade relations, border disputes continue to bedevil Indo-China ties. India accuses China of illegally occupying more than 14,000 square miles of its territory on its northern border in Kashmir, while China lays claim to more than 34,000 square miles of India's northeastern state of Arunachal Pradesh.

"India is a long-term host to the Dalai Lama and about 100,000 Tibetan refugees, although the Indian government forbids them from participating in any political activity" Curtis remarked.

Out of concern for Chinese sensitivities, the Indian government placed restrictions on Tibetan protesters in India during the uprising in Tibet, and Beijing praised New Delhi for preventing Tibetans from marching to the Tibetan capital of Lhasa.

The Indian political opposition, however, criticised Indian Prime Minister Manmohan Singh for appeasing the Chinese and for not defending Tibetans' human rights.

"Renewed tensions in Tibet would likely put pressure on New Delhi to show greater solidarity with the Tibetan people.

China has recently started to raise the issue of the Dalai Lama's status in India in diplomatic talks for the first time in several years, indicating its increased concern over the issue," she added.

US's increasing attention to India over the past five years, especially Washington's decision to extend civil nuclear cooperation to New Delhi surprised Chinese policymakers and led them to reassess their policies towards India.

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