"Premier Li (Keqiang) was receptive to my concern about the unsustainable trade imbalance between our two countries and we have agreed to explore avenues to bridge this gap," Singh told reporters after meeting his Chinese counterpart.
"We are taking forward the suggestion made by Premier Li in New Delhi for a Chinese industrial park to act as a magnet for Chinese investment in India," he said.
Bilateral trade touched USD 66.5 billion last year, of which China's exports to India totalled to about USD 47.7 billion.
The burgeoning trade deficit has touched almost USD 20 billion amid declining Indian exports of raw materials like iron ore.
India has been pressing China to open up its markets in areas like IT and pharmaceuticals where Indian companies have an edge.
India and China have set a target of USD 100 billion in bilateral trade by 2015.
"India faces an unsustainable imbalance in its trade with China. One of the ways of overcoming the trade deficit is for India to attract larger flows of Foreign Direct Investment from China," Singh had told official Chinese media yesterday.
A joint statement issued after Singh's talks with the Chinese leadership said that the leaders recognised that India and China are poised to enter a new stage of economic engagement based on pragmatic cooperation and mutually advantageous policies and practices.
Singh and Li expected the Strategic Economic Dialogue during its meeting in November/December 2013 to work out specific projects and initiatives in areas that have already been broadly agreed upon.
"The Joint Economic Group will continue to expand the bilateral economic cooperation and promote a balanced growth of bilateral trade. Its Working Groups will expeditiously discharge the mandate given to them in pursuit of those objectives," the statement said.
The two sides also agreed to look into the prospects of a bilateral Regional Trade Arrangement (RTA). They will review the state of the negotiation on the Regional Comprehensive Economic Partnership (RCEP), it said.