Indian and China have agreed a new $100bn (£66bn) bilateral trade target by 2015, up from $60bn in 2010.
The two sides agreed to take measures to promote greater Indian exports to China, to reduce India's trade deficit.
Companies have already signed business deals worth $16bn on the opening day of Chinese PM Wen Jiabao's three-day official visit to India.
The latest of a number of world leaders to visit India, Mr Wen is accompanied by some 400 Chinese business leaders.
China is India's largest trading partner.
A joint communique signed by the two sides on Thursday said that they had agreed to expand co-operation in infrastructure, environment, information technology, telecommunications, and investment and finance.
It said that both wanted "to draw on each other's strengths and pursue mutual benefit and win-win results".
Mr Wen held talks on Thursday with Indian PM Manmohan Singh.
The two men discussed a number of sensitive issues, including a long-running border dispute.
Both sides said they need more time to sort out the border question.
The BBC's Sanjoy Majumder in Delhi says that the Chinese premier's visit amounted to a strong endorsement of the economic relationship between the two Asian giants, even though contentious issues remain.
These include China's military build-up on the border and India's support for the Dalai Lama.
The two countries signed some 50 deals in power, telecommunications, steel, wind energy, food and marine products worth $16bn at the end of a business conference attended by Mr Wen in the capital, Delhi, on Wednesday evening.
This overtakes the $10bn of agreements signed between Indian and American businesspeople during the recent visit of US President Barack Obama.
"There is enough space in the world for the development of both China and India and there are enough areas for us to co-operate," Mr Wen told the business conference.
Mr Singh - speaking after his 11th meeting with Mr Wen in the last five years - said that a strong partnership between the two countries "will contribute to long-term peace, stability, prosperity and development in Asia and the world".
The Chinese delegation was larger than the number in delegations led in recent weeks to India by US President Barack Obama (215), French President Nicolas Sarkozy (more than 60) and British Prime Minister David Cameron (about 40).
The communique said that the two sides had decided to establish a "mechanism of regular exchange of visits between heads of state and government".
"They welcomed the opening of the telephone hotline between the prime minister of India and the Chinese premier and agreed on regular consultations between the two leaders on issues of importance to both countries," it said.
"They also agreed to establish the mechanism of annual exchange of visits between the two foreign ministers."
On Thursday China's premier will also met India's External Affairs Minister SM Krishna and the ruling Congress party chief Sonia Gandhi.
On Friday Mr Wen travels to India's nuclear-armed neighbour and rival, Pakistan, for a two-day official visit.
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