NEW DELHI - Chinese troops have begun pulling back from the disputed border with India, sources said Friday, as President Xi Jinping wrapped up a rare visit to New Delhi overshadowed by the stand-off at the remote frontier.
The row over an alleged incursion by hundreds of Chinese troops into territory claimed by India has dominated Xi's visit, intended to reset ties between Asia's two superpowers after the election of a new Indian government this year.
The two countries have long been embroiled in a bitter dispute over their border, with both sides regularly accusing soldiers of crossing over into the other's territory.
As Xi arrived in India on Wednesday, reports said 1,000 Chinese soldiers had entered a disputed area in the mountainous northern Ladakh region, sparking a stand-off with Indian troops.
Analysts said the reported incursions were likely timed to fire a shot across the bows of India's new Prime Minister Narendra Modi, who has signaled he will take a harder line on what he termed Chinese "expansionism".
On Friday, a local lawmaker said the troops had begun pulling back, confirming a report by the Press Trust of India news agency.
"The Chinese troops have started going back," the lawmaker told AFP, on condition of anonymity.
"The Indian soldiers are also retreating, but they will continue their vigil." A source in the Indian paramilitary forces said the situation has "de-escalated" in Chumar sector although some Chinese soldiers were still present in Demchok area of southern Ladakh.
"The army will hold a flag-meeting likely this evening to defuse the overall situation," he told AFP.
China and India fought a brief but bloody war in 1962 over the Indian state of Arunachal Pradesh in the eastern Himalayas.
Small incursions are common across the Line of Actual Control (LAC), the de-facto border that runs 4,000 kilometres (2,500 miles) across Ladakh.
In a joint statement Friday, the two leaders reiterated their commitment to seek a "fair, reasonable and mutually acceptable solution" to the festering boundary issue.
"Pending a final resolution of the boundary question, the two sides would continue to make joint efforts to maintain peace and tranquillity in the border areas," they said.
Chinese foreign ministry spokesman Hong Lei said the two leaders had "reached an important consensus on properly handling border issues".
"President Xi said that on border issues, the two sides should continue with friendly cooperation and the pursuit of an equitable solution in a fair way acceptable by both countries," Hong said in Beijing.
"Before the final settlement, the two sides should control and manage the disputes and maintain peace and tranquillity in the border area, so that it doesn't influence the development of bilateral ties."
During his visit Xi pledged greater investment from China, already India's biggest trading partner, with annual two-way commerce of more than $65 billion (S$82.3 billion).
He said China, which built the world's largest high-speed rail system from scratch in less than a decade, would look to develop faster train lines in India and build industrial parks in Gujarat and Maharashtra states.
"This developmental partnership is conducive not only to the common interests of both sides, but also to stability and prosperity of the region and the world," the statement read.
India has been pushing for more investment to narrow the trade deficit with China, which has soared to more than $40 billion from just $1 billion in 2001-02.
Modi is eager to secure Chinese funding to fulfil his election pledge to overhaul his country's crumbling infrastructure, which has held back economic growth in the country of 1.2 billion people.
Xi, the first Chinese president to visit India in eight years, wrapped up his India visit by meeting the parliamentary speaker and Sonia Gandhi, head of the former ruling Congress Party.
Around 10 Tibetan protesters shouted slogans outside the Taj Palace hotel in Delhi, where the meetings were held, before being taken away by police.
A number of pro-Tibet protests have been held in New Delhi during Xi's visit, a reminder of the other irritant in India-China ties - the presence the Dalai Lama.
Tibet's exiled spiritual leader has made India his home since fleeing a failed uprising against Chinese rule in 1959.
He is due to kick off a two-day spiritual conference in the capital Saturday.