New Delhi, March 30 (IANS) With the Bollywood film 'Chandni Chowk to China' marking the first step in co-production, India and China are aiming at increased cultural exchanges and are in the process of finalising a co-production agreement, says Information and Broadcasting Ministry secretary Asha Swarup.

'We have said that we would like to co-produce films and they have also shown inertest,' Swarup told IANS.

'As of now there is no co-production agreement. We have been in dialogue with the government of China. We have discussed some of the clauses and hope to finalise it soon.

'Once the co-production agreement is in place, it would be possible for producers from China and India to come together and get into co-productions,' she said.

Efforts are being made to promote cultural exchange in other areas too.

'We have also suggested exchange of students, who are studying films, as well as faculty teaching cinema. The Indian students and faculty will go to Beijing Film Academy and from there the students will come to our film institute. They said that they will speak to the people looking after the institute and get back to us,' Swarup said.

At Friday's inauguration of the China Film Festival in the Indian capital, Tong Gang, director general of the State Administration of Radio, Film and Television (SARFT) China, said Bollywood film 'Chandni Chowk to China', which stars Akshay Kumar in the lead role, is the first step in the area of co-production.

Asked about the film, Swarup said: 'It was also news to me. It appears that people on their own have been working out arrangements from the industry here and there, which is a good thing.'

Events such as the weeklong Chinese film festival, she said, would help people from the two countries understand each other.

'The film festival like this brings the contemporary cinema to the people of India and it helps to understand the life of the people and it is one of the best exposures to those places. And you have so much in common - we are an old eastern civilization and we feel that it builds a bond between people of India and China.'

She also said that Indian films would soon have a commercial release in China and vice-versa.