Days before the visit of Chinese President Hu Jintao next week, the government has approved the signing of a Bilateral Investment Promotion and Protection Agreement with China.
The 10-year trade pact would increase investments between the two countries, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after a meeting of the Union Cabinet.
China is the 61st country with which India will sign such a pact, which is based on the model BIPA agreement and would cover only post establishment investments.
Other countries with which India has similar bilateral protection agreements include Britain, Russia, Germany, South Korea, Sri Lanka, Spain and Thailand.
Although trade between the two countries increased by 37 per cent to around $17.5 billion in 2005-06, investments have not grown significantly especially from Chinese firms.
FDI in India by Chinese firms stood at $3.53 million between August 1991 and July 2006, a commerce ministry official told a news agency, citing the latest figures.
The figure does not include investments made from Hong Kong. Indian firms put $161.37 million into China between April 1996 and February 2005, the official added.
Briefing reporters about other decisions at the Cabinet meeting, Dasmunsi said the government had also decided to grant permission for setting up of community radio stations to non-profit organisations and educational institutions across the country.
The ministry of information and broadcasting will finalise the terms and conditions and the detailed procedures for issuing community radio licences.
Those eligible for these licences will include civil society and voluntary organisations, state agriculture universities, Krishi Vigyan Kendras, registered societies and autonomous bodies and public trusts registered under the Societies Act or any other such Act. Applicants must have a track record of at least three years.
The Cabinet also relaxed the criteria for the Accelerated Irrigation Benefits Programme to include the drought prone districts.
"The relaxation will help to complete on-going approved projects for any plan, which the state government undertakes to complete within four years," he said.
The sanctioned grants would be released in two installments - the first based on project outlay and second after confirmation of expenditure.
The grant component amounting to 90 per cent of the total grant sanctioned will be released immediately and the balance 10 per cent of the grant when 70 per cent of the agreed expenditure is incurred, the minister said.
To expedite implementation of the Tiger Task Force appointed by the prime minister, the Cabinet also gave its ex-post-facto approval to an amendment carried out in the law to protect wildlife. "It would strengthen conservation of tigers and other endangered species of wild animals," Dasmunsi said.
The Cabinet also approved increasing subsidised Haj travel quota by 10,000 from the current 100,000, besides adding more flights from India to Saudi Arabia this year.
Haj pilgrims will be transported by Air India or Indian Airlines from Kolkata, Calicut, Nagpur, Aurangabad, Patn a, Guwahati, Jaipur and Srinagar.