I don't want to talk to you anymore.
* * *
You got that chocolate for me? Okay, you're my friend.
* * *
And that's what KaTTi and BaTTi mean in the language of Indian kids, at least to those in Hindi speaking areas. I believe the concept is used by kids almost everywhere across India, even though the nomenclature may be different.
KaTTi comes from the Hindi word Kaatna (to cut), and is used by kids to what you could call cut connection with their friends. BaTTi is end of 'KaTTi.' In the North, KaTTi was expressed with a click of thumb under one's chin, and BaTTi was known as abba.
For the concept as it happens in the movie, you can check out this video.