Here are 10 developments in the story:
After talks that went on longer than expected, the Foreign Secretaries of the two countries held a joint briefing and announced a series of steps to improve ties that have been strained for months.
Top army officers from India and Pakistan will meet in person in a mechanism to de-escalate tension along the border, National Security Adviser Ajit Doval told NDTV. A joint statement listed "early meetings between the chiefs of the Border Security Force and Pakistan Rangers."
According to the statement, the National Security Advisers of the two countries will meet in New Delhi to "discuss all issues connected to terror."
India and Pakistan have also decided to find ways of accelerating the 26/11 Mumbai terror trial and additional evidence would be sent, said Foreign Secretary S Jaishankar.
Pakistan says evidence submitted so far by India including that against 26/11 plotter Zaki-ur-Rahman Lakhvi is insufficient. Mr Lakhvi's release from jail in Pakistan in April outraged India and was raised today by PM Modi in his meeting with the Pakistani prime minister.
PM Modi and Nawaz Sharif had met informally at a dinner hosted by Russian President Vladimir Putin last night.
Just a day ahead of the talks, Pakistani forces violated ceasefire again at the Line of Control in Jammu and Kashmir in which a BSF jawan was killed.
India called off a dialogue between foreign secretaries in August, incensed that Pakistan's envoy in New Delhi had engaged with Kashmiri separatists in the run-up to those talks.
Today's meeting comes at a time when Pakistan has warned India against any military operations on its soil along the lines of the one in Myanmar last month in which Indian Special Forces went across the border and destroyed two militant camps, killing as many as 50 rebels.
Mr Modi and Mr Sharif last met in Kathmandu in November, 2014, but did not have a proper bilateral meeting. Prime Minister Modi then reached out to Mr Sharif by wishing him at the beginning of the holy month of Ramzan.