China's premier is making his first visit to India in five years, trying to stabilize a crucial relationship as New Delhi forges closer defense and commercial ties with the U.S. and several Asian countries, who in turn are anxious to contain Beijing's growing clout across the Asia-Pacific region.

Wen Jiabao is scheduled to arrive in New Delhi on Wednesday with about 400 business leaders—one of the largest Chinese trade delegations ever to visit India—on a visit that China hopes will refocus relations on commerce and allow the first Chinese bank to operate in India.

Beijing is keen to bring more stability to the relationship following a string of disputes in the past two years over border issues, visas, water and China's close ties with Pakistan, India's regional rival.

The concern for China now is that India—with the region's third-biggest economy, and second-biggest armed forces—is being drawn into a loose strategic alliance with the U.S. and its Asian partners to counterbalance Beijing's growing economic and military might.

In the past year, China has also clashed with Japan over disputed islands in the East China Sea, angered Vietnam by asserting Chinese claims over the South China Sea, and antagonized South Korea by refusing to distance itself from North Korea.

Chinese officials sought to smooth the way for Mr. Wen's visit Monday by calling for a free-trade agreement to help reduce China's trade surplus with India, and playing down the idea of any strategic competition between Beijing and New Delhi, which are marking the 60th anniversary of diplomatic relations this year.

One of the key outcomes of Mr. Wen's visit—his first to India since 2005—is expected to be a joint financial-services agreement that China hopes will open the door for the first Chinese bank to start operating in India, and Delhi hopes will encourage more Chinese investment, especially in Indian infrastructure development.

However, Indian officials signaled that talks on a free-trade agreement are not in the cards when Mr. Wen meets Manmohan Singh, the Indian prime minister, before traveling to Pakistan on Friday to meet Yousuf Raza Gilani, the prime minister of Pakistan.

Officials said China should first open its market to higher-value Indian exports, such as information technology and pharmaceutical products, as well as addressing New Delhi's continuing concerns about their disputed Himalayan border, a controversial Chinese water-diversion project and other issues.

And while emphasizing the need for closer commercial ties with China—now India's biggest trade partner—they are also hedging their bets by calling for closer cooperation with other countries concerned about forceful Chinese diplomacy in the region of late.

"Certainly there's a need for more coordination" between Asian countries concerned about China, Nirupama Rao, India's foreign secretary—and a former Indian ambassador in Beijing—said in an interview.

The new partnerships "speak of the need...for China to be more transparent, for China to be more forthcoming about what its strategy is for the region."

India remains reluctant to enter formal alliances, partly because of its historical links with the nonaligned movement that kept it from formally siding with the U.S. or the Soviet Union. Like other countries in the region, it also is anxious to avoid open confrontation with China because of the importance of the trade relationship.

Nonetheless, India has a new strategic partnership with the U.S. since 2008 when the two signed a deal that lifted a three-decade ban on India importing U.S. nuclear fuel and technology. It also opened the door to increased U.S. arms sales to India, and more joint military exercises.

In the past year, India has also been enhancing trade and defense ties with Japan, which is in the process of overhauling a Cold War-era defense doctrine to focus more on the potential threat from China.

India and Japan are pushing ahead with plans for a free-trade pact, and this year began joint naval exercises in the Indian Ocean and the Sea of Japan, as well as starting regular high-level talks over defense and security.

A similar trade pact between India and South Korea came into force this year, and Seoul and Delhi also signed a deal in September on joint production of military equipment during the first official visit ever by an Indian defense minister to South Korea.

This summer, India's army chief visited Vietnam for the first time in 15 years and an Indian Navy flotilla conducted a monthlong tour of the Pacific during which it visited Indonesia, Vietnam, Australia and Singapore.

"There's a natural coming together" of nations that worry about China's rise, said Rajan Menon, a professor at the City University of New York who specializes in Asian affairs. "They have a problem in common and that's China,"

India's hardening stance toward China was highlighted in a U.S. diplomatic cable published by the WikiLeaks website this month that described how the Indian ambassador in Beijing asked his U.S. counterpart in February for closer cooperation because of "China's more aggressive approach."

The Indian Embassy declined to comment about the cable.

Even Mr. Singh, the soft-spoken Indian prime minister, told Indian newspaper editors in September that: "There is a new assertiveness among the Chinese. It is difficult to tell which way it will go. So it's important to be prepared."

Another indication came last week, when New Delhi refused to bow to pressure from Beijing not to send its ambassador to a ceremony on Friday marking the award of the Nobel Peace Prize to Liu Xiaobo, a jailed Chinese dissident.

While China had warned countries they would "bear the consequences" if they attended, it has yet to react to India's decision.

Instead, Chinese officials have been playing down the idea of India as a strategic competitor.

"The leaders of both nations agree the world has sufficient space for the two emerging economies to grow," Chinese Assistant Foreign Minister Hu Zhengyue said Monday, according to the state-run Xinhua news agency.

Dai Bingguo, China's top foreign-policy official, issued a lengthy commentary last week in which he said other countries should neither fear China's growing power, nor join forces against it.

Zhang Yan, China's ambassador to India, also called for Beijing and Delhi Monday to move toward a regional free-trade agreement to help reduce India's trade deficit with China.

Chinese foreign-policy experts say China is wary of fighting battles on too many fronts, and keen to achieve better balance in its relations with Delhi and Washington ahead of President Hu Jintao's planned visit to the U.S. in January.

"Our leadership is quite aware of this—this year, the environment around China is not as good as before," said Cheng Ruisheng, a former Chinese ambassador to New Delhi.

"It is true that India has some fears, just as the U.S. has some fears, about China's comprehensive power," he said. "To improve relations with both, China needs to show that it does not threaten anyone."

Another cause for alarm in Beijing came last month, when President Barack Obama visited India and declared his support for New Delhi's quest for permanent membership of the U.N. Security Council.

The council's five permanent members—the U.S., China, Russia, France and Britain, known collectively as the P-5—have the power to veto any decision, and Beijing fears that any reform of the body would dilute its international clout, and also open the door for Japan, its wartime occupier, to become a permanent member.

The leaders of Britain and France also have visited India since July, and President Dmitry Medvedev of Russia is due to visit next week. All three have said they support India's permanent membership of the council.

As much as India shares other countries' concerns about China, however, it is wary of being drawn into a confrontational relationship with Beijing, and seeks to improve ties principally through trade.

India's bilateral trade with China has grown 20fold in the past decade to $60 billion. New Delhi has a large trade deficit with China and exports mainly raw materials, such as iron ore.

In addition to wanting Beijing to open its markets to Indian exports of information technology, pharmaceutical and agricultural products, New Delhi is also hoping China will help fund some of the billion of dollars needed to improve India's rickety infrastructure, said Ms. Rao, the country's foreign secretary.

"This relationship [with China] has to be transacted in a very nuanced fashion," she said.

Japan and South Korea might also be reluctant to build ties with India to the point of antagonizing China, says T.C.A. Rangachari, a visiting professor at New Delhi's Jamia Millia Islamia University and a former Indian ambassador to a number of countries who also served in China.

The Obama administration, too, faces a dilemma over how to bolster India without angering China and Pakistan.

The president chose to visit China in November 2009, a year before India. New Delhi expressed concern during that trip over a joint statement that Washington and Beijing aimed to work together to promote peace and stability in South Asia. Washington's close military ties with Pakistan, key to U.S. efforts to defeat the Taliban in Afghanistan, has further worried India.

In some areas, India and China have shown a united front, including a position in global climate-change negotiations to resist calls from Western nations to sign up to legally binding caps on carbon-dioxide emissions.

Yet overall, India is responding to China "with a greater degree of assertiveness," says Amitabh Mattoo, an expert on India-China relations at Jawaharlal Nehru University in New Delhi.