Spokesman Gopal Baglay told reporters that a meeting with Mr Xi had never been on Mr Modi's agenda.
China's foreign ministry had said the atmosphere was not right for a meeting.
Troops have been facing off along one stretch of India and China's shared border along the Himalayas.
Indian media reports said that despite the government's position that a meeting between the two sides was never planned, China conclusively ruling it out was being seen as a hardening of its stance.
A potential meeting between Mr Xi and Mr Modi was being seen as a way of defusing tensions.
Both countries have been engaging in sharp rhetoric, after Indian troops stopped Chinese engineers from extending a border road through a plateau known as Doklam in India and Donglang in China.
The plateau, which lies at a junction between China, the north-eastern Indian state of Sikkim and Bhutan, is currently disputed between Beijing and Thimphu.
India supports Bhutan's claim over it.
It is one of the longest stand-offs between the two sides since a war in 1962, where China defeated India.