India on Tuesday relaxed foreign investment rules for land-bordering countries including China, the latest sign of warmer relations between New Delhi and Beijing.

The cabinet said the changes would result in greater investment flows and boost "India's competitiveness as preferred investment and manufacturing destination".

The new rules will apply to all investment from neighbouring countries that share a land border with India -- including Bangladesh, Nepal, Bhutan, Pakistan and Myanmar -- but are widely seen as courting Chinese or Chinese-backed investors.