Foreign Office spokesperson Tehmina Janjua told a weekly news briefing that there was no basis for the reports in the Indian media.
"This is the most absurd piece of information I have heard. It is totally baseless," she said.
Janjua was responding to a question about India's External Affairs Ministry seeking a report from the Defence Ministry about the presence of Chinese soldiers along the Line of Control.
The media reports had quoted Northern Command chief Lt Gen K T Parnaik as saying that Chinese troops were present along the LoC and posed a military challenge to India.
Referring to the resumption of dialogue between India and Pakistan, Janjua said the process of engagement was "moving ahead" and the Commerce Secretaries of the two countries will meet in Islamabad during April 27-28.
Dates for a meeting between the Additional Secretaries and Surveyors General to discuss the Sir Creek border dispute are expected to be finalised shortly, she said.
No dates have been decided as yet for a meeting of the Defence Secretaries, who will address the Siachen issue, she added.
"We are confident that these talks will be imbued by a spirit of enlightened national interests on both sides.
I must underscore that Pakistan attaches considerable importance to the dialogue process," she said.
Asked if the issue of giving India access to Pakistan for trade with Afghanistan would be discussed in the upcoming meeting of Commerce Secretaries, Janjua said this matter "has been adequately addressed in the Afghanistan-Pakistan Transit Trade Agreement." The transit trade pact allows Afghanistan to transport its goods to India through Pakistani territory.
However, Afghan trucks are not allowed to carry Indian goods via Pakistan.
Responding to another question about Foreign Secretary Nirupama Rao's remarks that India is willing to send its cricket team to Pakistan, Janjua said: "Any sporting event between two countries, especially neighbours, is welcome. As for the specific matter of any visit taking place, we have no such information."