Chinese Premier Li Keqiang and Prime Minister Manmohan Singh attend a signing ceremony at the Great Hall of the People in Beijing. (AP Photo)
Addressing future leaders at the Chinese Communist Party's Central Party School, Singh said old theories of alliances and containment are no longer relevant.
"India and China cannot be contained and our recent history is testimony to this. Nor should we seek to contain others," he said.
The Prime Minister was received with a standing ovation and his speech on "India, China - A New Era" was given a huge round of applause by the audience.
In his seven principles of engagement, Singh said, "One should reaffirm an unwavering commitment to the principles of 'Panchsheel' and conduct our relationship in a spirit of mutual respect, sensitivity to each other's interests and sovereignty, and mutual and equal security." He said India has welcomed President Xi Jinping's concept of a new type of great power relations.
"This is a contemporary development of the Panchsheel or Five Principles of co-existence, elaborated by Prime Minister (Jawaharlal) Nehru and Premier Zhou Enlai in the 1950s," Singh said.
A day after reaching accords on cooperation in border defence and trans-border river issues, Singh said maintaining peace and tranquillity in the India-China border region has been the cornerstone of the bilateral relationship.
"It is essential for mutual confidence and for the expansion of our relations. We should do nothing to disturb that. Indeed we can achieve it by adhering to our agreements and utilising our bilateral mechanisms effectively. At the same time, we should move quickly to resolve our boundary issue," he said.
The address to the Communist Party Central School is a rare honour given to visiting leaders from abroad.
The Prime Minister also spelt out a eight-point roadmap of areas offering cooperation between the two countries and invited Chinese investment in Indian plans to invest USD one trillion in infrastructure in the next five years.
Talking about his seven practical principles of engagement, Singh said the two countries should increase consultations and cooperation on complex issues such as trans-border rivers and trade imbalance so as to strengthen strategic and cooperative partnership.
Also "we should maintain a high level of strategic communication and consultations, in a spirit of transparency, on our region and our periphery, eliminating misunderstanding between our two countries and building experience of positive cooperation," Singh said.
"As the two largest countries in Asia, our strategic consultation and cooperation will enhance peace, stability and security in our region and beyond," he said.
Singh, in his speech, also stated that the convergence between the two counties on a broad range of global issues should lead to enhanced policy coordination on regional and global affairs and cooperation in regional and multilateral forums in the political, economic and security domains.
"We should harness the full potential of cooperation in all aspects of our relationship, including in the economic area," he said.
Singh stressed two countries will achieve much greater success in relations by increasing contacts and familiarity between their people in every walk of life.
"Like a beautiful tangram that emerges from seven different shapes, these seven principles would together create a beautiful tapestry of India-China relations in the years ahead," he said.
Expressing satisfaction over the nine agreements reached during his current visit, including the Border Defence Cooperation Agreement (BDCA), Singh said the deals would help to advance many of shared principles enunciated by him.
"As officials who will determine public policy, I hope you will do everything to advance our cooperation and promote India-China relations from your positions of responsibility," he said amid a round applause from the large audience that comprised of middle-rung Communist Party leaders from various provinces currently undergoing orientation training at the central school regarded as the cradle of CPC ideology and policies.
Reiterating his remarks that world is large enough to accommodate the development aspirations of both India and China, Singh said during their meeting, Chinese President Xi Jinping echoed this thought.
Xi said that the Chinese and Indian dreams for becoming strong, developed and prosperous nations are inter-connected and mutually compatible.