Taking exception to China's involvement in several projects in Pakistan-occupied Kashmir (PoK), India on Sunday described it as "illegal" and said it has conveyed its concern over this as well as supply of Chinese weapons to Pakistan.
Despite differences on a host of issues with China, External Affairs Minister S M Krishna who is expected to visit Beijing in April this year said the country did not see it in "antagonistic terms".
In a year-end review of the foreign policy and India's relations with its neigbours, the Minister said, "India lives in a difficult neighbourhood" and national security and terrorism originating from "across our borders" would remain a major challenge in 2010.
During an exclusive interview to PTI, he touched upon the troubled ties with Pakistan, relations with China and his optimism about "meaningful cooperation" from the US in regard to cases of two terror suspects David Headley and Tahawwur Rana, arrested there for plotting terror attacks in India.
Asked about the "pinpricks" from China in the shape of border incursions, issuance of separate visas to Kashmiris, the Dalai Lama and status of Arunachal Pradesh, he replied, "We are indeed concerned about some of these developments."
He went on to emphasise that China's continued supply of weapons to Pakistan and activities of Chinese companies in PoK were a matter of concern and India was talking about all these issues with China.
Explaining why India sees these activities in PoK as "illegal', Krishna said Jammu and Kashmir is an integral part of the country and neither Pakistan nor China have a "locus standi" there.
Still India did not see China in "antagonistic terms" as it believes that there is enough space for both to develop in a "mutually supportive manner while remaining sensitive to each other's concerns and aspirations", as befits good neighbours and strategic partners, Krishna said.
On the outlook for 2010, he said, "I am optimistic about the progress in our bilateral ties with China in the year ahead".
He also said "India and China are engaged in deepening their strategic and cooperative partnership on the one hand and narrowing divergences on the other."
Krishna emphasised that India was "committed to close and friendly relations with our neighbours" as it was convinced "that our destinies are interlinked".
Referring to Pakistan, he noted that progress had been achieved in five years of composite dialogue but it was "eroded" by continued terrorism emanating from that country.
For better ties, he put the onus on Pakistan to act with "determination" against terrorism directed at India.
"The manner in which it acts to fulfill its assurances in this regard will be a critical factor in achieving progress in our bilateral relations," he said, setting the bottom-line for resumption of the composite dialogue stalled after the Mumbai terror attacks.
"With Pakistan, the composite dialogue process since 2004 revealed the promise and potential that exists for both countries in a context when relations are improving. Realising that potential is the challenge but we can only do so by squarely addressing the issue of terrorism," Krishna said.
Observing that it was in India's interest to "engage and normalise our relations", Krishna said "at the same time we are very clear that any meaningful dialogue with Pakistan can only be based on fulfilment of its commitment, in letter and spirit, not to allow its territory to be used in any manner for terrorist activities against India."
"In this context we expect Pakistan to unravel the full conspiracy behind the Mumbai terrorist attack and bring to justice the perpetrators and the conspirators of this heinous act of terrorism", he added.
Asked about the perception that the US authorities were not "fully cooperating" with their Indian counterparts with regard to Headley and Rana, he said, "the US Government has assured us of all possible help to deal with the Headley-Rana case.
"They have extended valuable cooperation to us in the Mumbai attacks case. The Headley-Rana case is presently under investigation, on which both India and the US are working. I am optimistic of meaningful cooperation from the US side in the matter."
On whether India will seek extradition of Headley and Rana, the minister said, "the Headley-Rana case is presently under investigation. An appropriate decision on the future course of action would be taken in due course."
Asked about his assessment of the way country's foreign policy has worked in the year gone by, Krishna said "our approach, aimed at a supportive external environment helpful for our security and for sustaining rapid economic growth, has paid rich dividends. At the same time, we carefully guard the independence of our foreign policy.
"....In sum, India is having a fruitful and active dialogue, for mutual development, peace and progress with the comity of nations."
About 2010, he said globally, in this year, the world community will have to deal with a host of issues, ranging from regional security concerns like Afghanistan and protection of vital sea-lanes, to global issues like UN reform, nuclear non-proliferation, energy security, climate change and recovery from the financial crisis.
"We will have to make sure that as these issues are addressed, our interests continue to be protected. We will seek to strengthen even further our relations with major powers, while maintaining independence and delicate balance in our foreign policy," the Minister said.