Chinese President Xi Jinping met with visiting Indian Prime Minister Narendra Modi in Xi'an, capital city of Shaanxi Province and Xi's hometown, on Thursday afternoon.

"This is the first time I have treated a foreign leader in my hometown and I hope you have a happy stay," Xi said at the start of the meeting.

Xi welcomed Modi and thanked him for the warm reception he received on his India visit in September, when the Indian PM accompanied him to visit his home state of Gujarat.

"That left me with a deep and good impression," Xi said.

In September, Xi and Modi "reached an important consensus on promoting the bilateral strategic partnership of cooperation and forging a closer partnership of development," according to the president.

Both sides have maintained frequent high-level contact and engagement, promoted cooperation in priority areas including construction of railways and industrial parks, strengthened exchanges, controlled border areas, Xi said.

China-India relations are experiencing stable development and facing broad prospects, he added, predicting that Modi's visit will strengthen the partnership.

Xi called on the two countries to look at their ties from a long-term perspective, strengthen coordination on global and regional affairs, and "steer the international order to develop in a fairer direction".

The two countries could strengthen communication on the Belt and Road Initiative, the Asian Infrastructure Investment Bank (AIIB), and Modi's "Act East" policy, find areas of common interest, and hone a mode of cooperation with reciprocal benefit, Xi said.

He said the two countries should seek common ground in their respective development strategies to jointly promote the region's economic integration and contribute to global economic growth.

He called for more bilateral cooperation in areas including railways, industrial parks, urbanization and training, pledging to encourage Chinese companies to invest in India.

The president also expressed hope that the two countries can trust each other more and control their disputes to avoid weakening bilateral ties.

Xi also called on the two countries to strengthen exchanges between media, think tanks and young people to promote mutual understanding.

Calling China a great neighbor, Modi said India was ready to communicate and cooperate more closely with China, increase cultural exchanges and properly handle disputes.

He also voiced hope for more bilateral trade and closer cooperation with China within the AIIB.

He said he believed the AIIB will play an important role in regional economic and social development, and that India welcomes China to increase investment.

With regard to South Asia, Xi stressed that China has close relationships in the area and supports the region to maintain friendly ties. China is ready to strengthen reciprocal cooperation with all South Asian nations and promote the region's peace, stability and prosperity, he said.

Modi echoed Xi, saying India attaches high importance to communication in South Asia. India is ready to cooperate with China concerning the Belt and Road Initiative to promote the region's development and prosperity, he said.

This three-day tour is Modi's first China visit. Premier Li Keqiang and top legislator Zhang Dejiang will also meet him in Beijing on Friday.