Officials from India and China say agreements signed during the Indian prime minister's visit to Beijing are helping build a better relationship between the Asian giants.
For decades, ties between India and China have been tangled by tensions over Tibet, Beijing's close ties with India's rival Pakistan and fighting over territory both sides claim.
But Indian Prime Minister Atal Behari Vajpayee said his visit to China has reduced some of those tensions and improved relations "and imparted fresh momentum to the comprehensive cooperation, which India and China are in the process of building," Mr. Vajpayee said.
China's Foreign Ministry said in one of the agreements signed Monday, India accepted China's claim to Tibet.
Foreign Ministry spokesman Kong Quan calls India's move "important and positive."
China has occupied Tibet for half a century and severely punishes anyone who works for Tibetan independence.
Tibet's exiled spiritual leader, the Dalai Lama, now lives in India, along with 100,000 of his followers who fled Tibet after a failed 1959 uprising against Chinese rule.
Analysts say the move to recognize Tibet as part of China could reduce tensions between Beijing and New Delhi.
But there was less progress on the issue of Sikkim, a small territory sandwiched between India and China. Beijing has long refused to recognize Sikkim as part of India. Monday, the two sides signed an agreement on expanding cross-border trade, which could include a route through Sikkim. But Chinese officials say the question of Sikkim is "an enduring one" that "can not be solved overnight."
Mr. Vajpayee is on a six-day visit to China. He has been meeting with China's top leaders, including President Hu Jintao, and former President Jiang Zemin, who heads the nation's military.
Mr. Vajpayee leaves Beijing Wednesday for visits to Luoyang and Shanghai before returning to India on Friday.