The flourishing India-China bilateral ties turned a new page today with an Indian company for the first time acquiring a substantial stake in a Chinese state-owned firm with over $150 million investment.

ITNL International Pvt Ltd (IITL), a subsidiary of IL&FS Transportation Networks Ltd (ITNL) signed an agreement with the Chongqing Expressway Group Co Ltd (CEG) and SASAC- Chongqing to acquire 49% of the equity interest in Chongqing Yuhe Expressway Co Ltd.

The agreement demonstrates the synergies and complementarities that exist in the capabilities of the companies, Deputy Indian Ambassador, Rahul Chhabra said at a special function in Chongqing city today.

It is also reflective of the growing dynamism in the economic engagement between India and China and the transformational impact that the investment cooperation between the two countries will herald in, he said.

"We believe that ITNL’s strategic investment in CEG is a beginning in the right direction that will result in mutually beneficial outcomes for both India and China," Chhabra said.

Set up in 2000, IITL’s parent company ITNL was listed on India’s National Stock Exchange in March 2010 and has a portfolio of over 20 infrastructure projects with an aggregate value of close to $9 billion, Chhabra said.

Though the bilateral trade crossed $61 billion last year and is set to reach $70 billion this year, bilateral investments have not reached levels that could justify the size and growing role of the two economies, he said.

"We believe that ITNL’s strategic investment in CEG is a beginning in the right direction that will result in mutually beneficial outcomes for both India and China", he said.

Chhabra said though Indian economy was growing around 8% for some time, Indian infrastructure growth has not kept pace with fast pace of economic growth.

In order to speed up infrastructure development, the Indian government during the 12th Five Year Plan will spend close to $1 trillion for infrastructure development, he said.