Leaders of China and India on Thursday entered a US$20 billion agreement in Delhi, wherein Beijing will invest in improving India's outdated infrastructure.

Indian prime minister Narendra Modi and China's president Xi Jinping announced their agreement on Thursday, when both leaders also shared their plan of fulfilling up to US$167 billion  worth of South Asian trade within the next five years.

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According to Modi, the five-year development and investment plan is a big step for both countries.

The prime minister also expressed his delight that China will be building two industrial parks in his country.

The amount of China's investment in India has been unprecedented for the country, since Beijing has only invested about US$ 446 million in India during the last 14 years.

Xi and Modi also discussed the possibility of partnering up for a civilian nuclear energy program.

The nuclear energy cooperation is part of India's plan of widening its nuclear energy sector following India's purchase of Uranium from Australia.

Included in the leaders' agreement is a Memorandum of Understanding regarding the amiable use of "outer space" and cooperation regarding railway construction.

However, the current border disputes between the two countries could hamper trade and industrial cooperation.

Indian authorities have recently accused the Chinese military of infiltrating the regions of Kashmir and Jammuh in Ladakh in the Himalayas.

Modi said that he raised the issue of border tensions as they were talking about the investment agreement.

In addition, he said in order for both countries to have a peaceful relationship, they agreed to cultivate utmost trust and confidence.

Meanwhile, a spokesperson for China said the border dispute has already been resolved.

According to President Xi, any misunderstanding will "perish" in time, adding that China believed in peaceful relationships with its neighbors to assure its own well-being.

TagsDelhi, Society, China India dispute