NEW DELHI, Aug 19 (Reuters): India and China agreed on Tuesday to resume direct flights and step up trade and investment flows as the neighbours rebuild ties damaged by a 2020 border clash.

The Asian giants are cautiously strengthening ties against the backdrop of U.S. President Donald Trump's unpredictable foreign policy, staging a series of high-level bilateral visits.

The two countries would resume direct flights and boost trade and investment, including reopening border trade at three designated points, and facilitate in visas, the Indian foreign ministry said.

Direct flights have been suspended since the COVID-19 pandemic in 2020. No date was given for their resumption.

The latest statements came at the end of Chinese Foreign Minister Wang Yi's two-day visit to New Delhi for the 24th round of talks with Indian National Security (NSA) Advisor Ajit Doval to resolve their decades old border dispute.

The border talks covered issues related to pulling back troops both countries have amassed on their Himalayan border, delimitation of borders and boundary affairs, the Indian ministry said.

Both countries have agreed to set up a working group to consult and coordinate on border affairs to advance demarcation negotiations, a Chinese foreign ministry statement released on Wednesday showed.

It said the mechanism will extend talks to cover the eastern and middle sections of the border. Meanwhile another round of talks on the western section will be held as soon as possible, the ministry said.

Beijing also said both countries agreed to meet again in China in 2026.

"Stable, predictable, constructive ties between India and China will contribute significantly to regional as well as global peace and prosperity," Prime Minister Narendra Modi posted on X after meeting Wang.

Modi is scheduled to travel to China at the end of this month to take part in the summit of the Shanghai Cooperation Organisation - his first visit to the country in more than seven years.

Photo from Reuters