KABUL: Indian Prime Minister Narendra Modi jointly inaugurated the newly-restored Stor Palace in Kabul with Afghan President Ashraf Ghani via video link on Monday, Tolo News reported.

"In our hearts and minds, Indians and Afghans have always been close friends," the Indian premier said, adding that India's 1.25 billion people will "always be on Afghanistan's side in terms of working towards peace and stability".

The Indian PM said that joint initiatives between the two countries symbolised "the foundations of a modern Afghanistan".

"India will always work with you (Afghanistan) for a bright future," he said.

President Ghani thanked India for helping restore the historical building of Stor Palace. "Let me express my most sincere thanks to the government and people of India for standing beside us in days of happiness and sorrow."

Ghani said bilateral relations between India and Afghanistan are 'developing'.

Earlier this year, India and Afghanistan inaugurated the $300 million Friendship Dam in Herat. India also gifted Kabul a symbolic gift of democracy, its new parliament building in December last year.

India has poured more than $1 billion into Afghanistan reconstruction projects and humanitarian aid, making it one of the largest donors to the war-torn country.