Prime Minister Narendra Modi Monday announced a peace accord with a faction of the Nationalist Socialist Council of Nagaland (NSCN), an armed rebel group in northeast India, ending the country's oldest insurgency.

"My warm greetings to all those present here today, on this historic occasion," Modi said in his address to the nation, after the signing of the peace accord between the government interlocutor and Th Muivah, NSCN's influential IM faction's general secretary.

"Today is historic, a golden moment, when they quit weapons and join the mainstream. I welcome them," he added.

The agreement is expected to pave the way for peace in northeast India, particularly in the under-developed state of Nagaland, that shares its border with Myanmar.

The NSCN rebel group -- over six decades old -- is seen as the biggest and most violent insurgencies from amongst the dozens of big and small armed tribal and guerrilla armies that operate in India's seven northeastern states.

Even as recent as this June, at least 20 Indian soldiers were killed in a single rebel attack in the region.

India's National Investigation Agency later announced the capture of Khumlo Abi Anal, an operative of NSCN's other faction that operates out of neighbouring Myanmar.

"I believe that weapons or violence is not the way to solve problems and this (NSCN's) entry into the mainstream is the way ahead," Modi said.

"I believe that NSCN will also act as an inspiration for those (rebel groups) who want to come from a bad path to good path across the country," the prime minister added.

A government statement on Monday said that the details and execution plan of the peace accord will be "released shortly."

"The agreement will end the oldest insurgency in the country. It will restore peace and pave the way for prosperity in the North East (India)," the statement added.

Peace in the region, particularly Nagaland, is seen as an important step for implementing the Modi government's 'Act East' policy, which aims to develop the region by closer economic ties with east Asian countries in the immediate neighbourhood.