(Bloomberg) -- Chinese President Xi Jinping and Indian Prime Minister Narendra Modi agreed to set up a new mechanism to discuss trade at their informal talks in southern India.

India raised its concerns about the China-led Regional Comprehensive Economic Partnership, Indian foreign secretary Vijay Gokhale told reporters today.

The talks between the leaders of the world’s two most populous countries came amid border disputes and trade tensions. China is India’s second-largest trading partner with current two-way trade of $87 billion, and the two sides have targeted $100 billion in trade by 2020.

India is under increasing pressure to decide whether it will be a part of the RCEP -- which aims to create the world’s largest trading bloc -- as China seeks to conclude the negotiations by November. India’s primary concern is the pact may lead to an influx of cheap Chinese goods, which could further widen New Delhi’s nearly $55 billion trade deficit with Beijing.

Xi and Modi discussed how best to identify opportunities to enhance investment in each other’s country and how to increase trade, Gokhale said in an earlier briefing that followed their talks on Friday, noting the pair also discussed the issue of trade deficits and agreed to work together to ensure terrorism and radicalization don’t affect their nations.

The summit comes as China navigates a trade war with the U.S. and months-long protests in Hong Kong, while India is trying to revive an economy that’s seeing the slowest expansion in six years. New Delhi has also expressed annoyance over China’s support of neighbor and rival Pakistan regarding India’s decision to revoke the special autonomous status of Kashmir, a region both Islamabad and New Delhi claim.

(Updates with details from third paragraph)

To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net;Archana Chaudhary in New Delhi at achaudhary2@bloomberg.net

To contact the editor responsible for this story: Ruth Pollard at rpollard2@bloomberg.net

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