NEW DELHI--Indian budget airline IndiGo signed Wednesday an initial pact with Industrial & Commercial Bank of China Ltd. to finance the purchase of more than 30 Airbus A320 planes valued at about $2.6 billion.

The agreement comes at a time when Chinese President Xi Jinping is in India on a three-day visit that started Wednesday. Agreements for China to invest billions of dollars for the development of infrastructure and industry in India are expected to be signed between the two neighboring countries.

IndiGo--the largest carrier in India by market share--currently has a fleet of 81 Airbus A320-200 single-aisle planes. It will use the financing from ICBC Financial Leasing Co.--a wholly-owned unit of ICBC--to add more Airbus planes, it said.

Adding new planes would allow IndiGo to expand its network as competition intensifies from operators such as SpiceJet Ltd., GoAir, and Malaysia's AirAsia BhD, whose Indian unit began operations in June.

Privately-held IndiGo, which is controlled by India's InterGlobe Enterprises Ltd, currently flies to 31 cities in India and five overseas.

Write to Santanu Choudhury at santanu.choudhury@wsj.com

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