Foreign ministry spokesperson Raveesh Kumar said the possibility of India and China working on economic projects jointly in Afghanistan was discussed during the informal summit between PM Modi and Xi in China's Wuhan last week.
He said both sides will have to carry forward discussions on it, adding the leaders, however, did not focus on any specific project in Afghanistan.
Mr Kumar said PM Modi and Xi gave "broad" guidelines to improve ties. During their meeting, PM Modi and Xi had also decided to issue "strategic guidance" to their militaries to strengthen communications to build trust and understanding.
The decision was seen as an effort to bring down tension along the Line of Actual Control (LAC), the nearly 3,500 km-long border between India and China.
People familiar with the matter in the military said the Indian Army has already issued instructions to troops deployed along the LAC to avoid "aggressive patrolling".
On whether China's Belt and Road Initiative or the Chabahar port project were discussed, Mr Kumar said the talks did not focus on specific issues.
Indian soldiers will also rigidly follow their banner drill in disputed areas. Under this, in cases of transgression where Chinese soldiers unwittingly enter Indian territory in snowbound areas, where there are no landmarks, they are shown a banner to notify them of the fact. The messages on the banner are in English and Mandarin script. The idea is to avoid any "escalation", sources said.
With inputs from PTI