The dialogue between the respective delegations led by Indian Foreign Secretary Shyam Saran and Chinese Vice Foreign Minister Wu Dawei also covered issues like North Korea, reform of the United Nations and energy security and bilateral economic cooperation, diplomatic sources here said.

The dialogue, which the officials said had no "fixed agenda", aims to broaden the scope of the Sino-Indian relationship allowing both sides to exchange notes on global and regional security issues.

This is the first time that the two countries held a strategic dialogue the need for which had been stressed by the Prime Ministers of India and China Manmohan Singh and Wen Jiabao at their meeting on the sidelines of the Asean summit last year, given the huge untapped potential for trade ties between the two big neighbours.

Yesterday's talks would also do the spadework for a proposed visit to India by the Chinese prime minister sometime in March this year.

The strategic dialogue is besides the joint secretary-level bilateral talks on security and the joint working group on the boundary issue between India and China.

Although the joint working group has not met in the last two years, the issue was taken up at a higher level between special representatives of the two countries who were assigned to prepare a political perspective for resolving the problem.

However, there is a break in talks at the special representative level following the death of India's National Security Advisor J N Dixit but officials of both sides say it would resume soon.

The Chinese vice minister is also expected to meet Manmohan Singh and Indian External Affairs Minister Natwar Singh.

AFP adds: Both sides are engaged in discussions to resolve the lingering boundary dispute -- a fallout of the 1962 war -- with special representatives holding several rounds of talks since June 2003.

Ties have warmed since a visit to Beijing by then premier Atal Behari Vajpayee in June 2003 who is credited with improving Sino-India relations by getting China to officially recognise the tiny state of Sikkim as part of India in return for New Delhi acknowledging Tibet as a part of China.

Later that year, Indian and Chinese forces took part in naval exercises off Shanghai for the first time, opening a new chapter in military ties.

According to a report in the Indian Express, the talks were expected to provide a forum to forge greater understanding on issues including terrorism, energy security, disarmament and United Nations reforms.