India’s Prime Minister Narendra Modi draws a bow next to his Mongolian counterpart Chimed Saikhanbileg as they attend a Naadam festival celebration in Ulan Bator, Mongolia, on Sunday.

Indian Prime Minister Narendra Modi held talks Sunday with his counterpart during a visit to Mongolia, with the two nations upgrading relations as Delhi tries to strengthen its influence in China’s backyard.

Meeting Prime Minister Chimed Saikhanbileg, Modi praised the resource-rich nation as “the new bright light of democracy in our world” and said the two were “closely linked to the future of the Asia-Pacific region.”

Mongolia is seeking to counterbalance China’s growing influence in the landlocked nation.

The leaders signed a joint statement upgrading relations to a “strategic partnership,” just a year after Mongolia and China reached a similar agreement.

Other agreements included a $1 billion line of credit from India to support the expansion of Mongolia’s infrastructure, and promises to deepen cooperation on border security and defense.

Mongolia’s economy — fueled in recent years by a mining boom that led to high rates of growth, peaking at 17.5 percent in 2011 — depends largely on trade with China.

Yet it remains wary of China’s economic dominance, which has prompted a rise in protectionist government policies and resource nationalism in the country of only three million people.

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