Though India and China have differing perception on the boundary line in Arunachal Pradesh, the two armies will go ahead with their second joint military exercise on Indian soil this year.

"For the first time, we had an exercise with China in their territory. Next joint exercise will be held in India this year. You can wait for it," Defence Minister A K Antony told reporters in Laungwala at Rajasthan on Sunday.

Asked about the Chinese incursions in Arunachal Pradesh, the defence minister said, "There exists an established channel to sort out such matters."

Antony said the India-China border was not demarcated yet. "It is not settled yet. There is always some scope for confusion," he said.

Antony was speaking to reporters after a visit to Laungwala, the historic site where about 100 Indian soldiers thwarted an attack by Pakistani troops during the 1971 Indo-Pak war.

New Delhi and Beijing [Images] carried out their first-ever joint military exercise in China's southwestern province of Yunnan in December last year, which was helpful in building mutual trust and promoting cooperation between the armies of the two countries.

The purpose of the joint military exercise with China was aimed at taking the ties between the armed forces of two countries to a new high.

Antony also expressed hope that the pay commission will give armed forces the best.The defence minister strongly argued a case in the favour of the armed forces. "I hope pay commission will favour us," he said.