Soldiers completed their withdrawal from the Pangong Tso Lake area on Saturday, according to the communiqué.
Clashes on the poorly marked border led to the deaths of 24 troops last June.
Both sides say they will work to cut tensions on other parts of the border, or Line of Actual Control.
China and India announced their intention to withdraw forces from the lake area on 11 February, and commanders met on Saturday to assess how the operation was going.
“The two sides positively appraised the smooth completion of disengagement of frontline troops in the Pangong Lake area noting that it was a significant step forward that provided a good basis for resolution of other remaining issues along the LAC in Western Sector,” Sunday’s statement said.
Commanders held nine rounds of talks to get to this stage.
The statement acknowledged that other parts of the border remained tense and looked forward to continuing talks.
“The two sides agreed to follow the important consensus of their state leaders, continue their communication and dialogue, stabilise and control the situation on the ground, push for a mutually acceptable resolution of the remaining issues in a steady and orderly manner, so as to jointly maintain peace and tranquillity in the border areas.”
Before the completed withdrawal round Pangong Tso Lake, troops from each side were positioned on the north and south shores in territory claimed by both sides.
Months of tension has increased fears that the continued deployment of thousands of troops in the Ladakh region and the Chinese-administered Aksai Chin could lead to an escalating conflict.
India and China have been locked in a border dispute for decades and went to war in 1962. The border is 3,440km (2,100 miles) long and ill-defined.
Rivers, lakes and snowcaps along the frontier mean the line can shift, bringing soldiers face to face at many points, sparking confrontation. The two countries however have a long-standing agreement not to use guns or explosives along the border.
In January, troops on both sides were injured in a clash in the north-east in India’s Sikkim state.
Twenty Indian troops were killed in June’s clash which was in the Galwan Valley. China admitted two days ago that four of its soldiers died in the encounter. Weapons used reportedly included stones and nail-studded clubs.
China said the incident involved “fistfighting”.