- India says both sides agreed to withdraw troops at Doklam
- China says it will continue patrolling the region; India withdrew troops
- The statements come days before PM Modi's trip to China for BRICS summit
India said both sides agreed to an "expeditious disengagement" of troops at Doklam, a plateau near the Indian border that is claimed by both China and Bhutan. China's foreign ministry said later that India withdrew personnel and equipment from Chinese territory, and vowed to continue exercising "sovereign rights" in the area.
The statements defuse the most serious flare-up between the nuclear-powered Asian giants since China won a border war with India in 1962. They also come days before Prime Minister Narendra Modi and President Xi Jinping are set to attend a summit of BRICS nations in Xiamen, a coastal city in China.
India's rupee advanced and stocks hit an intra-day high following the news. The two countries now hold 36 percent of the world's population and account for 18 percent of global gross domestic product.
"In recent weeks, India and China have maintained diplomatic communication in respect of the incident at Doklam," India's statement read. "During these communications, we were able to express our views and convey our concerns and interests. On this basis, expeditious disengagement of border personnel at the face-off site at Doklam has been agreed to and is on-going."
India's foreign ministry didn't immediately respond to a request to clarify whether both countries were withdrawing border personnel, or if Indian troops were unilaterally moving back from the contested area.
China portrayed the development as a win, with the foreign ministry statement saying the army "has taken strong measures to safeguard territorial sovereignty and legitimate rights." It said the government wants friendly ties with India, and called on New Delhi to abide by "basic principles of international law."
The incident indicates more tension is coming in the often-volatile bilateral relationship between New Delhi and Beijing, said Harsh Pant, a professor of international relations at King's College in London.
"It's going to be very bumpy," he said.
The BRICS Summit -- involving leaders from Brazil, Russia, India, China and South Africa -- is due to be held from Sept. 3 to Sept. 5.
"This is just a temporary solution," said Jiang Jingkui, director of The India Research Centre at Beijing University. "Modi will come to China to participate in the BRICS meeting. But the relationship between the two sides cannot be repaired in one day."