India and China are in discussions to resume border trade through designated trade points after a five-year suspension. The Ministry of External Affairs (MEA) confirmed on Thursday that both countries are engaged in facilitating the resumption of trade through Lipulekh Pass in Uttarakhand, Shipki La Pass in Himachal Pradesh, and Nathu La Pass in Sikkim.
These trade points, established through bilateral agreements, have been closed since 2020 due to the COVID-19 pandemic and heightened tensions. The current talks are viewed as part of a broader effort to normalize relations between India and China, which have been strained since the Galwan Valley clashes in 2020.
The resumption of border trade is considered a confidence-building measure to ease border tensions, even though the economic value of this trade is relatively small. In addition to trade, India and China are reportedly in advanced stages of negotiations to resume direct flight services between the two countries. India has already resumed issuing tourist visas to Chinese nationals.
Chinese Foreign Minister Wang Yi is scheduled to visit India on August 18 for border talks with National Security Advisor Ajit Doval. This visit marks the first by a Chinese Foreign Minister since the Galwan clashes. Both leaders are expected to discuss boundary issues.
According to China's foreign ministry, cross-border trade cooperation has played an important role in improving the lives of people living along the border. The ministry also stated that both sides have reached a consensus on cross-border exchanges and cooperation, including the resumption of border trade.
The backdrop to these discussions includes increased trade friction between India and the US, with the US imposing tariffs on Indian goods. Despite long-standing competition for strategic influence in South Asia, both India and China have taken steps to mend ties amidst global trade and geopolitical turbulence. Recent high-level talks include meetings between Foreign Minister Wang Yi and India's External Affairs Minister S. Jaishankar.
