The soldiers pitched their tents in Ladakh, a Himalayan region next to the Kashmir Valley, the Indian newspaper The Hindu reported.
In response to China's action, India has sent an equal number of personnel from the Tibetan Border Police and the two sides are in a classic face-to-face posture.
New Delhi has summoned the Chinese ambassador to ask that the Chinese troops withdraw.
The incursion is the latest incident in a long-standing border dispute between the two nations that years of talks have failed to resolve, The Christian Science Monitor reported.
A 1933 agreement maintains peace across the effective line of actual control.
"This should not be seen as an event that could lead to a military confrontation," retired Indian Navy Commodore C. Uday Bhaskar said.