"The two sides also agreed to maintain communication both at diplomatic and military level including under the framework of Working Mechanism for Consultation and Coordination on India-China Border Affairs to resolve the existing situation peacefully, Ministry of External Affairs (MEA) said in an official statement.
It also said that the two delegations agreed that implementation of this understanding expeditiously, in accordance with the bilateral agreements and protocols, would help ensure peace and tranquillity in border areas and development of broader relationship between the two countries.
During the military-level talks, it was emphasised that India-China should strictly respect and observe the line of actual control, MEA said.
As per reports, India and China also reached at a consensus to maintain communication both at diplomatic and military level under the framework of WMCC in order to peacefully resolve the existing standoff at the Galwan valley in Ladakh.
The decision to disengage the forces, locked in a bitter standoff for the last six weeks in eastern Ladakh, was taken after hours-long meeting between senior Indian and Chinese commanders in Moldo on the Chinese side of the Line of Actual Control (LAC).
Earlier this week, Chinese Foreign Ministry spokesperson in Beijing said the two sides had a "candid and in-depth exchange of views on the outstanding issues and agreed to take necessary measures to cool down the situation."
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Meanwhile, Indian Army General Manoj Mukund Naravane visited Leh and inspected forward areas in Eastern Ladakh as he reviewed operational situation on the ground.
Prime Minister Narendra Modi-led Central government had earlier said that it has given "full freedom" to give a "befitting" response to any Chinese misadventure along the LAC.
The Army has already sent thousands of additional troops to forward locations along the border in the last one week. The IAF has also moved a sizable number of its frontline Sukhoi 30 MKI, Jaguar, Mirage 2000 aircraft and Apache attack helicopters to several key air bases including Leh and Srinagar following the clashes.
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After the Galwan Valley clash, the two sides held at least three-rounds of Major-General-level talks to explore ways to bring down tension.
The situation in eastern Ladakh deteriorated after around 250 Chinese and Indian soldiers were engaged in a violent face-off on May 5 and 6. The incident in Pangong Tso was followed by a similar incident in north Sikkim on May 9.
Prior to the clashes, both sides had been asserting that pending the final resolution of the boundary issue, it was necessary to maintain peace and tranquillity in the border areas.