India on Tuesday sealed a pact on information technology (IT) and software cooperation with China, a move that is expected to help Indian IT companies in obtaining contracts from China's state-run firms.

After signing the memorandum of understanding on IT cooperation, Yang Xueshan, Vice Minister in the Ministry of Industry & Information Technology (MIIT), claimed that contrary to Indian perceptions, China's state-run companies weren't blocking Indian IT companies.

Speaking on the sidelines of the meeting, Xueshan told reporters, "We do not pose any impediments for Indian software companies in entering into cooperation with SOEs."

India's Planning Commission Deputy Chairman Montek Singh Ahluwalia said the pack was essentially a formal recognition from the Chinese government it wanted to promote Indian IT companies.

Mr. Ahluwalia also raised the issue of growing bilateral trade imbalance between the two countries. He said that the trade imbalance was skewed heavily in China's favour, with estimated deficit of $35 million. The huge deficit has prompted many experts to argue that India is allowing China to dictate terms of the trade between the two nations.

During the meeting, India also sought China's support in enhancing its three rail corridors as well as developing modern stations.

Chinese rail network, which three decades back lagged behind India's, is now one of the world's best rail networks. China's express trains today run at speeds of up to 200-250 kilometers per hour. The county has also developed the world's largest high-speed rail network, where trains run at speeds of up to 350 kilometers per hour. India has sought China's assistance in hiking speeds on lines between New Delhi and Agra, Kanpur and Chandigarh.