Indian and Chinese soldiers faced off on a Himalayan plateau on Thursday, dampening the bonhomie around a rare visit by China's President Xi Jingping to New Delhi and a reminder of problems underlying growing commercial ties.
A meeting between brigadier-level army officials in the Ladakh plateau in the western Himalayas on Monday did not result in soldiers retreating from positions held for more than a week in a dispute over construction in the border region.
"There is an ongoing situation," an official at the army headquarters in Delhi said.
Both countries lay claim to vast tracts of territory and after two decades of talks are no closer to a resolution of a border dispute over which they went to war in 1962.
Foreign ministry spokesman Syed Akbaruddin said the new friction on the border had featured in talks between Xi and Prime Minister Narendra Modi, who met in New Delhi on Thursday.
"Let me assure you all these issues have been raised and issues of concern, including recent events, will continue to be discussed," he said in response to a question about the stand-off.
India and China are ramping up commercial ties and opening up the way for Chinese investment in Indian infrastructure, including railways and industrial parks , with billions of dollars of investment pledges likely during Xi's trip.
Speaking at a welcoming ceremony at Rashtrapati Bhavan, Xi emphasised the enormous potential of the world's two largest emerging powers working more closely together but acknowledged a need to "deepen mutual understanding".
"During this visit I hope to work with the Indian leadership to be strong advocates of China-India relations and to take our strategic and cooperative partnership for peace and prosperity to a higher plain," Xi told reporters after being met by a guard of honour.
Modi is keen on Chinese investment to help balance $65 billion in annual trade that is heavily tilted in China's favour. He is also seeking more access for India's IT services and pharmaceuticals to China.
M.D. Nalapat, who heads the department of geopolitics at the Manipal University, said India's new government saw that working with China was 90 per cent upside, and should not be undermined by the two countries differences.
"Modi is looking at an opportunity, and will not sacrifice it because of the 10 per cent threat, Nalapat said in an article written for the Gateway House think tank.
"China needs India - as a market, as a source of trained manpower, and as a friendly neighbour. I believe that Xi has the ability to break through the negativism about India.
Even as images of Xi shaking hands with Indian ministers were broadcast, TV commentary focused on the border tension, and raked up sensitivities about China's support for India's arch-rival, Pakistan.
Another irritant for China is the presence in India of exiled Tibetan spiritual leader the Dalai Lama, who has lived in the north of the country since fleeing a failed uprising against Chinese rule of his homeland in 1959. A government of exiled Tibetans and tens of thousands of refugees are also based in India.
In one sign that India wanted the Xi visit to be a success, New Delhi asked the Dalai Lama, whom Beijing labels a dangerous separatist seeking an independent Tibet, to reschedule an event in the capital so that it would not clash with the Chinese president's trip .
About 20 supporters of a free Tibet, mainly women, protested within a few metres of the building in New Delhi where Modi and Xi were holding talks, waving Tibetan flags and shouting "We want justice." Police detained them after a few minutes.
Several other small pro-Tibet protests broke out across the city.
Speaking in Mumbai, the Dalai Lama said Xi should use his visit to learn from the Indian experience of democratic rule, and learn democratic practices.
"I think the Chinese president should learn some of India's experience," he said in a speech. "Democratic rule, rule of law, and free media."