"They (India and China) agreed that broadening and deepening of defence exchanges between the two countries was of vital importance in enhancing mutual trust and understanding between the two armed forces," the statement said.
Singh and Wen also said they would work together on "the threats posed by terrorism to the peace and security of the two countries and the whole world." "Both sides noted the positive outcome of the meetings held so far of their bilateral dialogue mechanism on counter-terrorism and agreed to further strengthen and consolidate their discussions and co-operation.
"It was agreed to hold the next meeting of the dialogue mechanism on counter-terrorism later this year," the joint statement said.
BEIJING BACKS INDIA FOR PERMANENT UNSC SEAT: Moreover, according to an Indian government document seen by AFP, China will also support India's candidature for permanent membership of an expanded UN Security Council.
"China understands and supports the aspirations of India to become a permanent member of the Security Council," said the document, drawn up after a meeting on Sunday between Chinese Vice-Foreign Minister, Wu Dawei and Indian Foreign Secretary, Shyam Saran.
"If the Indian side expresses its aspirations, the Chinese side will be happy to see this outcome," it added.
"On the issue of India becoming the permanent member of the Security Council, there will be no obstacle on the Chinese side."
These views were to be conveyed by Chinese Prime Minister Wen Jiabao to Indian Prime Minister Manmohan Singh during talks in New Delhi on Monday and could be made public as well, the document said.
"China will support India's effort when UN Security Council reforms reach a certain stage," it added.
Japan, India, Germany and Brazil have launched a joint bid to win permanent seats on the Security Council.
A joint statement released by the Indian foreign ministry on Monday said, "India and China agreed UN reforms should be comprehensive and multi-faceted" and should "put emphasis on an increase in the representation of developing countries."
"China understands and supports India's aspirations to play an active role in the UN and international affairs. The two sides reaffirmed their readiness to conduct close consultations and co-operation in the process of UN reforms."