India and China are moving towards reopening border trade, more than fiveyears after it was halted, in what officials describe as a positive signalfor bilateral relations. The decision marks a cautious but notable step ineasing tensions that have persisted since the COVID-19 pandemic andsubsequent border stand-offs.
Officials from both sides have confirmed that discussions are underway torestore trade through three key Himalayan passes — Lipulekh in Uttarakhand,Shipki La in Himachal Pradesh, and Nathu La in Sikkim. These routes, oncevital lifelines for communities along the frontier, were shut in 2020following the pandemic outbreak and escalating tensions in the Ladakhsector.
While the trade volume along these routes has historically been modest —estimated at just over $3 million in 2017–18 — the impact on localeconomies is significant. The exchange traditionally includes goods such aswool, carpets, medicinal herbs, and spices, which are central tolivelihoods in these remote regions. Resuming this trade is expected toprovide economic relief to border communities and strengthen cultural andcommercial ties.
The trade talks come alongside broader efforts to normalise relations,including discussions on resuming direct flights and easing other traderestrictions. Chinese Foreign Minister Wang Yi is scheduled to visit Indiaon August 18 for high-level talks with National Security Adviser Ajit Dovalunder the Special Representatives mechanism — a diplomatic channel focusedon managing border disputes and enhancing cooperation.
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Observers see the move as more than just an economic gesture. It signals apossible softening of hardline positions, offering a pathway towardsgreater stability along one of the world’s most sensitive borders. Thesuccess of these talks could serve as both a test and a catalyst forbroader India–China engagement in the years ahead.