Mukherjee, who arrived in Beijing Sunday, will oversee the signing of the accord, which the Indian defence ministry had said would institutionalize training, exercises and other contacts between the two countries' armed forces.

"During the visit, the two sides are expected to sign a memorandum of understanding on exchanges and cooperation in the field of defence," the Indian embassy said in a statement issued Monday.

The agreement will aim to develop "a strategic and cooperative partnership for peace and prosperity between India and China," and at enhancing trust between the two militaries, the Indian defence ministry said ahead of Mukherjee's visit.

The agreement could become an instrument for a regular and sustained dialogue between the two countries on defence issues, China Daily said.

Mukherjee held meetings with his Chinese counterpart, Cao Gangchuan, and Foreign Minister Li Zhaoxing Monday, an Indian embassy spokesman said.

Li told Mukherjee that China wants to step up strategic and cooperative relations with India in 2006, the Xinhua news agency said.

Li said the common prosperity of China and India, with one third of the world's population, would be a huge contribution to mankind, state-run Xinhua reported.

Mukherjee said cooperation between the two countries and their active involvement in world affairs will contribute to world peace and development, according to Xinhua.

Mukherjee will call on Chinese Premier Wen Jiabao Tuesday.

"My efforts will be to have a much larger participation in joint military exercises, more exchange visits by armed forces personnel and an expanded mutual training program," Mukherjee was quoted as saying by Indian media ahead of his trip, according to the China Daily.

An Indian defence ministry spokesman said the visit would be an important milestone in Indian-Chinese relations, the China Daily said.

During his five-day China trip, Mukherjee will visit military bases in Beijing and Shanghai as well as in Lanzhou, the capital of northwest China's Gansu province, the embassy and China Daily said.

He will be given a tour of select defence establishments, the embassy said.

An embassy spokesman said Mukherjee visited the Beijing Aerospace Command and Control Center Monday.

China-India relations have improved in recent years as both countries have made efforts to complement instead of compete with each other's growth.

However, the two still have not resolved a decades-old border dispute -- the result of a brief but bitter conflict in 1962.

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