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China's President Xi Jinping and Indian PM Narendra Modi met on the sidelines of the Shanghai Co-operation Organisation (SCO) in the port city of Tianjin. It is Modi's first time in China in seven years.
Xi told Modi that China and India should be partners, not rivals, while Modi said there was now an "atmosphere of peace and stability" between them.
Russian President Vladimir Putin is also at the summit, attended by more than 20 world leaders, which this year has been overshadowed by trade wars with the US.
US President Donald Trump has imposed steep tariffs on Indian goods as punishment for Delhi's continued purchase of Russian oil, and Putin faces threats of sanctions for his ongoing war on Ukraine.
As the US-India relationship faces increasing headwinds, Modi is moving closer to Xi. Both countries are not only the most populous, but also have two of the largest economies in the world.
Modi announced that flights between India and China - suspended since deadly troop clashes on their shared Himalayan border in 2020 - would resume, without providing a timeline.
Xi said "both sides need to approach and handle our relationship from a strategic height and long-term perspective" and that "it is the right choice for both sides to be friends".
The SCO summit itself is largely symbolic but will allow leaders to air common grievances and shared interests. It comes days before a massive military parade in Beijing that will mark 80 years since the end of World War Two.
There are 10 member states in the grouping - including Russia, Pakistan and Iran - and 16 dialogue partners and observers.
Putin, who is a close ally of China, arrived to a red carpet welcome in Tianjin on Sunday.
The SCO was created by China, Russia and four Central Asian countries in 2001 as a countermeasure to limit the influence of Western alliances such as Nato.
This year's gathering is the largest since it was founded.
For Tianjin, the summit has become a major event, with banners and billboards promoting it throughout the northern port city.
At night, tens of thousands of local spectators have been cramming into the riverside area to see a lightshow displayed on tower blocks while the gathering is taking place.
The streets have been heavily crowded - making it difficult for people to even move, especially on and around the historic Jiefang Bridge.
During the day, pedestrians are at times being made to wait as roadblocks go up to allow the motorcades of visiting world leaders to pass by quickly.
Taxis and other hire car services have been suspended in the downtown area, but this has not dampened the enthusiasm of crowds of people wanting to be part of what has been described as a historic meeting.
However, police have advised Tianjin's more than 13 million residents to avoid moving around the city if possible and to stick to shops nearby them to purchase any immediate necessities.
Source: BBC News
