The Indian government on Friday told Beijing that exploration of oil and gas by Indian companies in South China Sea was purely a commercial activity, but also said the issue of sovereignty should be resolved as per international law and practice.

China?s increasing assertion over ownership of South China Sea has left countries in South East Asian region worried with some openly courting the United States of America for maritime support. While New Delhi has so far not joined the issue, it is clearly worried given that the sea routes carry almost 40 per cent of its merchandise exports to the US west coast. Further, New Delhi is also keen on securing energy assets in South China?s Spratly islands through commercial deals, a move that China objects to.

In his 55-minute bilateral meeting with Chinese Premier Wen Jiabao on the sidelines of the East Asia Summit in Bali, Prime Minister Singh discussed India?s position on the South China Sea in the context of the summit. ?India supports rights of passage and wants the law of seas to be respected,? said a government official, who did not wish to be quoted.

Just before his interaction with Wen, the Prime Minister spent over an hour with US President Barack Obama discussing maritime security and nuclear non-proliferation among various other issues. The US recently termed the hotly-contested South China Sea as ?national interest? and in a sign of aggressive posturing committed to maritime presence in northern Australia, promised a second warship to Philippines next year and warmed up with old foe Vietnam.

China has not taken lightly to the global attention on South China Sea. Addressing the 14 th China-ASEAN summit celebrating the 20 th anniversary of their relations, Wen Jiabao said, ?The disputes over the South China Sea between the relevant countries in the region have existed for many years. They should be settled through friendly consultation and negotiation between the sovereign states directly concerned. Outside forces should not get involved under any excuse.? This was the first of the six principles Wen said must be observed by China and ASEAN countries to promote future growth.

During the bilateral talks with Wen, the Prime Minister also stressed on the need for balanced trade between the two countries, said Sanjay Singh, Secretary (East). ?This will help create a more conducive environment according to the Prime Minister,? he said. India-China trade has grown at a scorching pace and crossed $60 billion in 2010. But China sells $ 20 billion more to India, and enjoys a significant trade advantage. The two countries expect bilateral trade to top $100 billion by 2015.

In talks with Singh, Chinese Premier Wen repeated his earlier assertion that there was enough space in the world for the two countries to cooperate and meet their developmental aspirations. ?Many people believe the 21st century belongs to Asia, but this could only be true when China and India, the two most populous countries in the world, achieve their goal of modernization and cooperation,? Wen said, according to Xinhua news agency. Wen also said robust economic and business ties were at the core of their bilateral relations, an Indian ministry of external affairs official said.

The two leaders also welcomed the resumption of defence exchanges. Referring to a decision for a mechanism to be set up during Wen?s visit to India last year, they noted peace and tranquility prevailed along the boundary.