However, the area in question, the Doklam plateau is contested by both Bhutan and China and recent efforts of China building roads in the area have created tensions between the three nations of India, China, and Bhutan.
China has categorically asked India to withdraw its troops from the Donglong area in Sikkim sector, insisting it is a precondition for a "meaningful dialogue" to settle the boundary issue.
But that has not stopped China from putting forth pictures of India's alleged incursion into Chinese territory.
A senior military source with direct knowledge of the standoff at the Tibet, Sikkim and Bhutan tri-junction, however, ruled out escalation.
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Chinalodged diplomatic protests with India on June 26, alleging that Indian troops crossed the border between the two countries in the Sikkim region, the Press Trust of India reported on Tuesday, June 27.
General Bipin Rawat arrived in Gangtok, the capital of the tiny Himalayan state, before heading off to visit troop formations.
"Any attempt, therefore, to unilaterally determine tri-junction points is in violation of this understanding", the Indian statement said. The Nathu La Pass, which lies on the frontier between Sikkim and Tibet, was the site of a fierce border clash between Chinese and Indian troops in 1967. "We can tell you that Chinese people hold friendly and goodwill relations to Bhutanese people, but our determination to uphold or territorial integrity and sovereignty is unwavering", he said.
It is understood to have been a warm meeting regarding the future of the bilateral relationship with Xi accepting that it was in the interest of both India and China to have stable ties.
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It has also charged India with acting at the behest of Bhutan, which also lays claim to Donglong.
Speaking at a function organised by a media house, Jaitley added that the Government of Bhutan had made it clear that China was trying to claim Bhutanese land.
However, road construction is likely just a ruse as the Chinese want to push the established border close to the strategically important chicken's neck which is being resisted both by India and Bhutan. "The pictures clearly show that Indian soldiers and vehicles have overstepped the crest which is defined as the boundary and entered Chinese territory", he said.
"The Donglang region belongs to Chinese territory and it is very clear the conditions of the threshold where the areas are that were trespassed by the Indian troops", Chinese Foreign Ministry spokesperson Lu Kang said. This has been reiterated since then in other Chinese official briefings.
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He said the road was "in violation of an agreement between the two countries". Meantime, Bhutan has also asked China to stop construction of road from Dokola to Doklam area, saying it affects demarcation process the boundary between the two countries, the agency said.