But average world temperatures are still on track to rise far above the key goal set in the 2015 Paris Agreement of limiting warming to "well below" two degrees Celsius (3.6 Fahrenheit) above pre-industrial times, it said.
The Carbon Action Tracker (CAT) report, by three independent European research groups, said current policies meant the world was headed for a warming of 3.4 degrees Celsius (6.1 Fahrenheit) by 2100, down from 3.6 degrees (6.5) it predicted a year ago.
"This is the first time since the CAT began tracking action in 2009 that policies at a national level have visibly reduced its end of century temperature estimate," it said.
China was on track to over-achieve its pledge under the Paris Agreement to peak its carbon emissions by 2030, it said. And India was also making progress to limit a surge in emissions driven by more coal use.
A rise of 3 degrees Celsius (5.4F) in global average temperatures could cause loss of tropical coral reefs, Alpine glaciers, Arctic summer sea ice and perhaps an irreversible melt of Greenland's ice that would drive up world sea levels, a U.N. science panel says.
"It is clear who the leaders are here: in the face of U.S. inaction, China and India are stepping up," said Bill Hare of Climate Analytics, one of the research groups.
Hare told Reuters that it was too early to say that global emissions were peaking.
"While China an India's emissions growth have slowed, they are still growing," especially in India, he said. "The most fundamental step to halt the global emissions growth now is for coal plants to be phased out in many countries."
On Monday, another report said that man-made carbon dioxide emissions were on target to rise by 2 percent in 2017, dashing hopes that they had peaked. The main driver was a 3.5 percent rise by China in 2017.
(Reporting By Alister Doyle; Editing by Richard Balmforth)