NEW DELHI (Reuters) — When Chinese President Hu Jintao visits India next week, the talk will almost certainly be of burgeoning trade ties and closer cooperation between the world’s most populous and rapidly growing economies.But underneath the red carpet lies an accumulation of mistrust between the Asian giants <\m> two very different nations and peoples.

In India, the visit is already becoming an occasion to ponder “the threat from China”. The 1962 war between the two countries may be history, but the wounds are still felt in India’s security establishment <\m> and kept open by a long-running border dispute.

“One objective reality we are contending with is an abysmal lack of confidence in each other,” bemoans Alka Acharya, the head of East Asian Studies at Delhi’s Jawaharlal Nehru University. “There is just no trust.”

Mistrust is fuelled by China’s close relationship with India’s arch-rival Pakistan, and its burgeoning ties with India’s other subcontinental neighbours. Its ever-growing military and the development of critical infrastructure in Tibet, on India’s northern border, have long been a concern.

Encirclement is the watchword among the Indian hawks. Feathers were ruffled this week when China restated its claim to the vast northeast Indian state of Arunachal Pradesh, parts of which it says are rightly part of Tibet.

India for its part disputes China’s right to rule 15,000 square miles of barren, icy and uninhabited land on the opposite end of the Tibetan plateau, part of Kashmir seized in 1962 by Chinese troops.

The two sides said they had agreed a framework to resolve the border row last year, and China’s foreign ministry said this week ahead of Hu’s visit <\m> which starts on Monday <\m> that it was committed to solving the dispute through dialogue.

But after 25 years of negotiations, there appears little hope of a breakthrough <\m> the two sides have never even agreed on a military line separating the two armies, points out Brahma Chellaney of New Delhi’s Centre for Policy Research.

“We are sliding back, not moving forwards in terms of the border settlement,” he said, arguing that the question of Tibet was the unspoken problem at the heart of the issue.

Hu is coming to India first, before visiting neighbouring Pakistan. Chinese analysts say this might be an attempt to placate New Delhi, but it might not be enough to deflect concerns.

“India may not be entirely happy with the outcome of this visit,” said Zhang Li at the Institute of South Asian Studies at Sichuan University in southwest China.

“I think there’s a strong chance that this time Hu will announce a civilian nuclear cooperation deal with Pakistan, a big agreement, and that may be part of the reason for giving face to India.”

A nuclear deal with Pakistan would naturally be seen as a counterbalance to a similar, much-hyped deal between the United States and India, which is still seeking Congressional approval.

At the same time, China has been building a deep-water port at Gwadar on Pakistan’s Arabian sea coast, as well as developing harbours or ports with Bangladesh, Sri Lanka and Myanmar, as part of closer economic and military ties with India’s neighbours. “Gwadar epitomises the way China is quietly but determinedly encroaching on India’s strategic backyard,” says Chellaney. “Having stepped up direct and surrogate pressure on India’s north, China is now threatening the dominant Indian role in the Indian Ocean.”

Acharya shares the concerns about Pakistan, but says India is wrong to overplay its worries about China’s role elsewhere in the subcontinent.

“In effect, it amounts to denying your own problems with your neighbours and just blaming it on China,” she said. There are other concerns, too.

To some analysts, the two fast-growing economies are set on a collision course as they compete for the energy they need to sustain themselves <\m> and ultimately even for water.

The Indus, Sutlej and Brahmaputra rivers all rise in Tibet, and although China has dismissed recent reports that it plans to divert the Brahmaputra to feed its arid north and west and generate power, alarm bells are ringing in New Delhi.

Acharya calls for a much broader strategic dialogue with China to dispel the fears on either side.

That chimes with the view of Zhao Gancheng at the Shanghai Institute for International Studies, who says Indian suspicions appear to have eased slightly in recent years.

“It’s not about borders or energy or influence, or not just about them,” he said. “The specific problems aren’t as important as the perception issue because if you have trust and understanding, these problems are easy to solve.

“I think that will be the main task of Hu Jintao’s visit <\m> to try to develop Indian perceptions of China in a positive direction,” he said.