India and China have signed 12 agreements in Delhi, one of which will see China investing $20bn (£12.2bn) in India’s infrastructure over five years.
At a news conference with Chinese President Xi Jinping, India’s PM Narendra Modi said “peace on the border” was important for progress.
Talks came as India accused China of fresh territorial incursions in Ladakh.
China is one of India’s top trading partners but they vie for regional influence and dispute their border.
Mr Modi and Mr Xi made separate statements at the end of their talks in Delhi on Thursday.
Under the investment plans, China pledged to:
- Help bring India’s ageing railway system railway system up-to-date with high-speed links and upgraded railway stations.
- Set up industrial parks in Gujarat and Maharashtra.
- Give more market access to India to products, including pharmaceuticals and farm products.
Both sides also focussed on increasing co-operation in trade, space exploration and civil nuclear energy.
Mr Modi called for an early settlement on the disputed common border between the two countries and said the “true potential of our relations” would be realised when there was “peace in our relations and in the borders”.
There have been reports in the Indian media of Chinese troops trying to construct a temporary road into Indian territory across the Line of Actual Control (the de facto boundary) in the disputed Ladakh region over the past week.
Mr Xi said he was committed to working with India to maintain “peace and tranquillity” on the border.
“China-India border issue is a problem which has troubled both sides for long… As the area is yet to be demarcated, there may be some incidents,” he said.
A Chinese foreign ministry spokesman said: “After timely, effective communication, the relevant situation has already been appropriately bought under control. Border issues are leftover issues from history.”