India and China have held their first "strategic dialogue" in the latest sign of improving relations.
The Delhi talks are expected to pave the way for a visit to India by Chinese Prime Minister Wen Jiabao in March.
Despite closer ties, India and China have still not resolved some of their long-standing border disputes.
However, analysts say these differences have been played down as China and India have developed a blossoming economic relationship.
'Important element'
The visiting Chinese delegation in the Indian capital was led by deputy Foreign Minister Wu Dawei. Indian Foreign Secretary Shayam Saran led the host side.
The talks began early Monday morning and continued over a working lunch. Mr Wu also met Indian Foreign Minister Natwar Singh later in the day.
Spokesman for India's external affairs ministry, Navtej Sarna, said: "Substantive discussions took place on bilateral relations, including in particular on preparations for the forthcoming visit of China's Premier Wen Jiabao to India."
He said the next strategic talks would be held in China at a date to be decided later.
Officials insist there is no fixed agenda for talks and issues relating to bilateral, regional and international co-operation between the two big regional powers are up for discussions.
The BBC's Jyotsna Singh in Delhi says both sides have been cautious in giving out any details on their talks on long-standing boundary disputes.
She says little headway seems to have been made on sorting out differences over the boundary issues, but both Delhi and Beijing are said to be keen on moving forward on other issues, particularly in the area of trade.
Claims, counter-claims
The two countries fought a bitter war over their largely unmarked border in 1962.
Both sides claim the other is occupying parts of its land.
While India accuses China of occupying territory in Kashmir, Beijing lays claim to territory in the north-east Indian state of Arunachal Pradesh.
In 2003, India formally recognised the area known as the Tibetan Autonomous Region as part of the People's Republic of China.
China, for its part, agreed to start border trade through the north-east Indian state of Sikkim - a move that was seen in Delhi as an acceptance by Beijing of India's claim over that area.
The agreements came during a visit by the then Indian Prime Minister, Atal Behari Vajpayee, to China.
Later that year India and China held their first joint naval exercises.
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