A day after China's oblique reference to the war the two countries had fought 55 years ago, the defence minister also said the current standoff between Indian and Chinese troops was triggered by Beijing.
Expressing deep concern over China constructing a road in the disputed Doklam area near Sikkim, the Ministry of External Affairs (MEA) said it was essential that all parties concerned display utmost restraint and abide by their respective bilateral understandings not to change the status quo unilaterally.
Beijing had also accused India of being a "third-party" to the China-Bhutan dispute.
"India is deeply concerned at the recent Chinese actions and has conveyed to the Chinese government that such construction would represent a significant change of status quo with serious security implications for India," the MEA asserted in a press release.
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It was also important that the consensus reached between India and China through the Special Representatives process was scrupulously respected by both sides, the ministry added.
It is also understood that the government will take a call whether it should make a request for a bilateral or a pull aside on the sidelines of the G-20 conclave in Germany next week between Modi and Xi in the backdrop of the ongoing stand-off.
The two leaders had met last in Astana on the sidelines of the SCO Summit during which Modi had conveyed to Xi that differences between the two countries should be resolved and not allowed to become disputes.
Narrating the sequence of events since June 16, the MEA said a People's Liberation Army (PLA) construction party entered the Doklam area and attempted to construct a road.
"In coordination with the Royal Government of Bhutan, Indian personnel, who were present at general area Doka La, approached the Chinese construction party and urged them to desist from changing the status quo. These efforts continue," the ministry said.
In keeping with their tradition of maintaining close consultation on matters of mutual interest, Bhutan and India had been in continuous contact through the unfolding of these developments, it said.
While status of Sikkim as part of India has been settled with China, the border is yet to be finalised.
India also treats the June 26 statement by the Chinese foreign ministry that Indian border troops crossed the boundary line in the Sikkim sector of the China-India boundary and entered Chinese territory as factually incorrect.
"It is our understanding that a Royal Bhutan Army patrol attempted to dissuade them (the PLA construction party) from this unilateral activity," it said, adding that Bhutan's ambassador had publicly stated that it lodged a protest with the Chinese government through its embassy in New Delhi on June 20.
It is understood that the Chinese, in response to the demarche, have termed the road construction as routine activity.
Bhutan has also urged China to return to the status quo as on June 16, 2017, the MEA said.
"Any attempt, therefore, to unilaterally determine tri- junction points is in violation of this understanding," it said.
Meanwhile, India has cancelled the Kailash Mansarovar yatra through Nathu La in Sikkim, though there was normal trade activity taking place from there.
While there have been instances of stand-off between Indian and Chinese troops in the past, including in Chumar, a border patrol facility located in southern Ladakh, this time it is different as it involves a third country.