India and China will resume defense exchanges halted in August after China refused a visa to an Indian general in Kashmir.
The exchanges are part of a wider general agreement between Indian Prime Minister Manmohan Singh and Chinese President Hu Jintao in the Chinese city of Sanya, China's southernmost city in Hainan province and a popular tourist destination.
The two leaders agreed to ease border tensions in the disputed Kashmir region and also to improve trading relations.
In December, during a visit by Chinese Premier Wen Jiabao to New Delhi, India and China agreed to increase bilateral trade from $60 billion in 2010 to around $100 billion by 2015.
Beijing and New Delhi have kept their dispute over territorial claims to Kashmir on the back burner since last year, although in November India announced it was beefing up its military defenses in the area.
India has control of around 45 percent of the Himalayan region, Pakistan controls a third but claims most of it, and China holds the remainder.
China defeated India in a brief 1962 conflict, but they agree to disagree over exactly where their nearly 2,200-mile Kashmir border is drawn.
Late last year India said it would have two army divisions totaling more than 36,000 troops deployed by March this year along the Kashmir border and into Arunachal Pradesh, in the far northeast.
Indian Defense Ministry officials said last year the two infantry mountain divisions along the border were to be fully "operational with specialized equipment" by 2011.
Arunachal Pradesh also is a possible flash point between the two Asian countries as they try to improve relations. The Indian state borders Myanmar in the east, the state of Bhutan in the west and China, which claims most of the mountainous and isolated state.
The Arunachal Pradesh border was set by a controversial 1914 treaty between the United Kingdom and a free Tibetan government. It remained vague and undefended until India moved troops there in 1950, the same year the Chinese Communist government took control of Tibet.
Vice President Hamid Ansari is likely to be the next major Indian leader visiting China, Indian national security adviser Shivshankar Menon, said.
"They also discussed further defense exchanges and visits," Menon said. "We have the understanding to maintain the momentum not just this year but in subsequent years. We will do two to three very high-level visits this year."
During the Sanya city meeting there was a formal announcement of the start of the "Year of China-India Exchange." Beijing has invited 500 young Indian students to China, and India will support the teaching of Chinese in Indian middle and high schools.
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