The two sides will set up an expert group to examine an interim arrangement for marking out border areas, India’s Ministry of External Affairs said in a statement on Tuesday.

The two countries would resume direct flights and boost trade and investment, including reopening border trade at three designated points, and facilitate in visas, the Indian foreign ministry said.

There is an upward trend in India-China relations and Beijing has promised to address New Delhi's needs on rare earths, a top Indian official and a source said on Tuesday, as the neighbours rebuild ties that were damaged by a 2020 border clash.

India has a $100 billion trade deficit with the neighbouring country in FY2025.

Earlier on Tuesday, an Indian source said that China had promised to address three key Indian concerns.