Narendra Modi's visit to Mongolia on Sunday, the first by any Indian prime minister, where he announced a credit line of $1 billion to the east-central Asian country's infrastructure and economic capacity building is much in line with what China has been doing in the strategic periphery of India. China's president Xi Jinping is unlikely to miss the point. China has in the past extended similar credit lines to Sri Lanka, Bhutan and Nepal, which are immediate neighbours of India.

Mongolia refers to India as one of its 'third neighbours' since it lies between Russia and China and share giant boundaries with them.

Modi's visit to Mongolia is a strong reinforcement of high-stake strategic value that India attributes to its relationship with that country, experts believe.

Besides extending a credit line, Modi announced that India will help Mongolia's defence establishment set up a cyber-security centre. This will be apart from the regular joint military exercises between the two countries that began in 2004. Codenamed 'Nomadic Elephant', India and Mongolia hold an annual military training exercise which the PM, in his visit, said will continue to happen.

Strategic affairs expert Brahma Chellaney says that "India-Mongolia defence ties are important as this is in line with China attempting to encroach the strategic periphery around India. The PM's visit should be seen more as strategic one rather than political". "Mongolia is a large country and historically shares deep bonds with India. Modi's visit shall help consolidate strategic advantages for India," he says.

The last time, the two countries held bilateral talks at similar highest levels was in July, 2011, when then President Pratibha Patil visited Mongolia. During the visit, the two countries had agreed for enhanced joint military exercises. A $20 million line of credit was worked out then for a joint programme on information technology.

However, geo-strategic experts believe that despite having strong historical and cultural links (Buddhism being one of the glues between the two countries) with Mongolia, India has had a slightly disorientated approach in firming up the relationship.

They admit that though Modi's visit is a step in right direction, it is a long way before India can establish a military leverage point vis-à-vis China through its strong strategic ties with Mongolia.