In a significant step, India and China will sign an agreement on guiding principles on the boundary issue when Prime Minister Manmohan Singh [Images] holds talks with visiting Chinese Premier Wen Jiabao in New Delhi [Images] on Monday.

The agreement was firmed up during a meeting in New Delhi on Sunday between Special Representatives of the two countries - M K
Narayanan and Dai Bingguo.

The talks between Narayanan, national security advisor, and Dai, Chinese executive vice-foreign minister, were 'fruitful with a view to finalising the documents on guiding principles for signatures tomorrow," External Affairs Ministry spokesman Navtej Sarna said in response to a question.

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The groundwork for the 'political guiding principles' was done during last month's meeting between Foreign Secretary Shyam Saran and his Chinese counterpart Wu Dawei in Beijing [Images].

The guiding principles would enable the two countries to resolve the boundary issue in a mutually acceptable manner, official sources said.

The meeting is the first one between Dai and Narayanan, who was appointed the Special Representative to boundary talks last month following the death of his predecessor J N Dixit.

Wen recently said that as long as the two sides acted in the spirit of mutual understanding and mutual accommodation and respected history while taking reality into account, they would be able to find a mutually acceptable solution to the boundary question through negotiations on an equal footing.

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Meanwhile, Jiabao arrived in New Delhi on a three-day visit.

He will hold wide-ranging talks with Prime Minister Manmohan Singh and other Indian leaders and firm up political parameters and guiding principles to resolve the boundary issue.

Wen, who flew in from Bangalore by a special aircraft, was received at the airport by External Affairs Minister K Natwar Singh, Minister of State for Personnel Suresh Pachauri, Foreign Secretary Shyam Saran and India's Ambassador to China Nalin Suri.