"Our functional co-operation has expanded and new dialogue mechanisms have been added. Our economic engagement with China has also witnessed expansion with the bilateral trade reaching close to $95 billion, though concerns remain on the growing trade deficit," Muraleedharan said at a conference at O.P. Jindal Global University (JGU) here.
India and China last month agreed to set up a High-Level Economic and Trade Dialogue mechanism to deepen economic cooperation and also sort out the concerns pertaining to the bilateral trade issues.
The decision was taken at the Second Informal India-China meet between Prime Minister Narendra Modi and Chinese President Xi Jinping held at Mahabalipuram, Tamil Nadu, on October 11-12.
"We accord great importance to our relations with China. Relations with China is one of the key aspects of our foreign policy," Muraleedharan said at the 12th All India Conference of China Studies (AICCS) organised at JGU from Nov 8-10.
Terming India's engagement with China "multifaceted", the Minister said that India-China relations "transcend bilateral dimensions and has an important bearing on peace, stability and prosperity of the region and the world."
"On issues where we have differences, we have agreed to deal with them prudently with due sensitivity to each other's interests, concerns and aspirations, and not to let these differences become disputes. Thus, over the last five years our engagements and exchanges with China at all levels have intensified," he said.
Defining people-to-people contact as an important factor in taking the bilateral relationship to a new level, Muraleedharan urged institutions and centres working on India-China relations to help foster a better understanding of China.
"While it is easy to make an argument that Chinese aspects of governance does not augur to our understanding of democracy, a deeper analysis of what is happening in China will also enable us to think about how Chinese government takes into account its people's aspirations and concerns when it comes to governing the society," JGU Vice Chancellor C. Raj Kumar said in his opening remarks.
Organised in partnership with the Institute of Chinese Studies, New Delhi, the conference saw participation from 24 institutions from across the country.
( With inputs from IANS )