Chinese President Xi Jinping arrived in Gujarat, India on Wednesday for a three-day visit with Prime Minister Narendra Modi to layout the blueprint of a long-term relationship that carries huge stakes for the rival giants.

The high-profile meeting between the leaders of the two most populous countries in the world is expected to be mutually beneficial, according to The New York Times.

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Both leaders talked about great bilateral partnerships ahead of Xi's visit. In an editorial published on The Hindu newspaper on Wednesday, Xi described how the combination of the "world's back office" and the "world's factory" could bring in potential synergies that will boost both countries' economies.

Modi is seeking to court Chinese investments to expand India's economy and upgrade Indian infrastructures, banking on the Chinese capability to channel billions of dollars for building highways, industrial zones and railways.

Before heading to New Delhi for bilateral talks on Thursday, Xi and Modi signed an investment agreement amounting to US$3.4 billion to build an industrial park in Gujarat, Modi's home state.

Xi's first day visit coincides with Modi's 64^th birthday celebration. Modi took the Chinese president and the first lady, Peng Liyuan, on a six-hour tour around Gujarat which included a banquet dinner on the banks of the Sabarmati River in the western city of Ahmedabad.

Choosing Gujarat over India's capital New Delhi marks a departure from protocol which, according to BBC, is a sign of warming relations between the leaders of rival economies in the region.

Beyond the rhetoric of economic camaraderie, the nuclear-armed neighbors are still embroiled in bitter territorial disputes. Friction along the 2,200-mile-long border has escalated in recent years, according to statements released by the Indian government.

President Xi's visit comes amid reports of a road-building standoff in the northern border on Monday where Chinese soldiers and civilians were spotted constructing a temporary road into the Indian side of the border along the de facto boundary in the Ladakh region.

TagsChina-India, bilateral ties, investment deal