India said on Friday that economics will be the driving factor in its relationship with China and trade between the two countries is expected to double to $20 billion by 2010.

Bilateral trade in 2004 is pegged at $10 billion.

Not only are there growth opportunities in traditional areas like steel, pharmaceuticals, automobiles and chemicals, but also export potential in sectors like foodgrains, Nalin Surie, India's Ambassador to China, said in New Delhi.

"I am very positive, there is a desire on both sides to take the relationship to a qualitatively new level. Economics will be a driving factor," he said.

He said trade between the two countries had touched a significant $1.87 billion during the January-February period and could exceed 10 billion dollars this year.

Addressing Confederation of Indian Industries, he said that trade will touch $20 billion dollars by 2010 provided there a change in the export basket and anything additional will be a bonus.

Surie said one area in which India has so far not penetrated the Chinese market is foodgrains and agri-commodities in which that country fixes annual import quotas.

Apart from tapping the potential in agri-sector, India should also look for greater trade with China in software, he said adding breaking into Chinese software market is not easy.

To a query on a possible Indo-Sino free trade area, he said a Joint Study Group was looking into bilateral economic relations in the next five years and he would not like to prejudge their recommendations.