China's new prime minister has arrived in India for his first foreign trip as the two Asian countries look to speed up efforts to settle a decades-old border dispute and strengthen economic ties.

China said on Sunday that Li Keqiang's choice of India for his first trip abroad since taking office in March shows the importance the country attaches to improving relations with its western neighbour.

After India, Li's foreign tour will take him to Pakistan, Switzerland and Germany.

"We think very highly of this gesture because it is our view that high-level political exchanges between our two countries are an important aspect and vehicle for our expanded cooperation," Syed Akbaruddin, India's external affairs ministry spokesman, said.

Bhaskar Roy, a New Delhi-based political analyst, said it is very interesting that Li's first stop in his tour is India.

"This shows a change in the way of thinking or readjustment of thinking in Beijing," he said.

"According to Chinese officials, they are entering a new age of foreign policy or diplomacy, which seeks to encompass neigbours."

Simmering tensions

Tensions run high between the two countries. China already sees itself as Asia's great power, while India hopes its increasing economic and military might, though still far below its neighbor's, will eventually put it in the same league.

Unresolved border issues between the neighbours have flared as well.

In last month's incident, India claimed that Chinese troops crossed the countries' de facto border April 15 and pitched camp in the Depsang valley in the Ladakh region of eastern Kashmir.

India responded with diplomatic protests, then moved its soldiers just 300 metres rom the Chinese position.

The two sides negotiated a peaceful end to the standoff by withdrawing troops to their original positions in the Ladakh area.

Gautam Bambawale, a senior Indian external affairs ministry official, said India and China were negotiating a Border Defense Cooperation Agreement, but declined to give details.

Indian media reports said the agreement proposes a freezing of troop levels of the two countries in the disputed border region as they make efforts to settle the issue.

Shortly after his arrival in New Delhi late on Sunday afternoon, Li was scheduled to meet his Indian counterpart Manmohan Singh, who will host a dinner for him.

Delegation-level talks between the two sides are scheduled for Monday.

Li will attend a business summit in Mumbai, India's financial capital, among other activities.

The border friction last month led to the Indian opposition and the media putting pressure on the government to take on China and call off Li's visit.

China has become India's biggest trading partner, with two-way trade jumping from $5bn in 2002 to nearly $75bn in 2011, although that figure declined to $61.5bn last year because of the global economic slump.