Flights were halted after the Covid-19 pandemic and a subsequent deadly clash in 2020 between their troops on the Himalayan border.
"The two sides agreed to expedite steps involved in resuming direct air services," New Delhi's foreign ministry said in a statement.
It came a day after the country's top career diplomat Vikram Misri met Chinese Vice Foreign Minister Sun Weidong in India.
In Beijing, foreign ministry spokesman Lin Jian said China had "a positive attitude" towards resuming flights after five years.
"Resuming direct flights between China and India is conducive to personnel exchanges and cooperation between the two sides and is in the common interests of both sides," Lin told a regular press conference in Beijing.
New Delhi and Beijing first announced in January an in-principle agreement to restart flights.
The neighbours also agreed to take "practical steps for visa facilitation and exchanges between media and think tanks", the ministry's statement added.
About 500 monthly direct flights operated between China and India before the pandemic, according to Indian media outlet Moneycontrol.
There are already regular flights between India and Hong Kong.
India and China are intense rivals competing for influence across South Asia.
At least 20 Indian and four Chinese soldiers were killed in the 2020 skirmish in a remote stretch along their 3,500-kilometre (2,200-mile) high-altitude frontier.
India then moved closer to the United States-led Quad alliance -- which also includes Japan and Australia -- which seeks to counter China's growing influence in the Asia-Pacific region.
New Delhi also clamped down on Chinese companies, preventing them from investing in critical economic sectors, along with a ban on hundreds of Chinese gaming and e-commerce apps, including TikTok.
Mutual distrust remains.
But they agreed to pull back troops posted at a key flashpoint along the disputed border in October, shortly before a rare formal meeting between Indan Prime Minister Narendra Modi and Chinese President Xi Jinping.
Later this month, China is expected to allow Indian pilgrims to trek to Mount Kailash in Tibet, a site holy to Hindus and Buddhists.
Indians have not been allowed to take part in the Kailash Mansarovar Yatra pilgrimage since it was also stopped in 2020.
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