Analysts are hailing the agreement about settling border disputes as a breakthrough in India and China's relationship.
It's evidence of the new pragmatism the Indian prime minister's visit was thought to represent.
The deal may be a classic case of political fudge
Political disagreement seems to have been put to one side to pave the way for an important practical gain on the ground.
The deal will reopen an historic cross-border trade route through the politically sensitive and long-disputed territories of Sikkim and Tibet.
It's been a major sticking point in the long-running negotiations about agreeing the shared border between the two neighbours.
Shift from grandstanding
Progress in revitalising the area has been blocked in the past by the disputed status of the two territories.
Some Indian officials describe it as a formalising of policy, not a change of policy
Travel in the region has been restricted by these political tensions and the military deployments on both sides.
But this breakthrough seems to be a quiet shift from political grandstanding on the issue to quiet pragmatism.
Both sides seem to be showing a new willingness to recognise and implicitly accept the status quo, even if they still have ideological reservations about the other country's claim to the territory in question.
It seems to be a good practical example of the new bilateral approach.
Behind closed doors
The handling of the apparent concessions over Tibet and Sikkim seem to be a classic case of political fudge.
The agreement was not unveiled in public but signed quietly behind closed doors.
As a result the political implications only emerged afterwards - when newspapers in both countries seized on the issue and declared political victory for their own leaders.
Indian papers say that China now recognised Sikkim as part of India and Chinese papers hail India's apparent recognition of Tibet as part of China.
Officials on both sides are struggling to play down the political significance altogether.
China says it still has not formally recognised India's claim that Sikkim is part of its territory.
Clear road ahead?
Indian officials say their position on Tibet hasn't changed.
Some describe it as formalising of policy, not a change of policy.
Indian officials have also been at pains to explain that the Dalai Lama and his government in exile are still welcome in India.
There's no question, they say, that he'll be forced to leave.
Politicians want to throw the focus firmly back on the practical trade gains which will now become possible as a result of the opening of this geographically important route.
Some business groups have already reacted with delight.
But the question still to be addressed is how far India and China can proceed with their new policy of pragmatism without raising fresh controversies about the difficult political issues which have not yet been resolved.