India and China May Resume Border Trade After 5 Years

India and China May Resume Border Trade After 5 Years 

Summary

• India and China are discussing restarting border trade of locally made goods after more than five years.
• The trade was suspended since 2020, following the deadly Galwan Valley clash and COVID-19 pandemic.
• Both countries propose to reopen designated trading points along their shared Himalayan border.
• Border trade was small in volume, valued at about $3.16 million in 2017-18, but important for local border communities.
• China has expressed willingness to improve communication and coordination on border trade.
• This move is part of broader steps toward easing tensions, including planned high-level meetings and resumption of direct flights.
• Prime Minister Narendra Modi is expected to visit China in August for the Shanghai Cooperation Organisation summit, where talks with President Xi Jinping could occur.

India and China, two neighboring Asian giants with complex relations, are quietly discussing resuming the trade of locally made goods across their shared border. This trade, which had been halted for more than five years, is seen as a hopeful sign of easing tensions between the two countries.

The border trade stopped in 2020, just as the COVID-19 pandemic spread and after a deadly clash occurred in the Galwan Valley region, where 20 Indian soldiers and at least four Chinese troops lost their lives. Since then, trade through three official border points along the Himalayan border had been paused.

The trade volume was small but vital for communities living in the remote, mountainous border areas. Items like spices, carpets, wooden furniture, medicinal plants, cattle fodder, wool, pottery, and electronic goods had been exchanged. The latest government data from 2017-18 showed the trade was worth about $3.16 million.

Officials in New Delhi have confirmed ongoing talks to reopen these trade points. Although the details remain private, China’s Ministry of Foreign Affairs has publicly indicated its readiness to enhance communication and work with India to restart border trade. Beijing recognizes this trade’s importance in improving the livelihoods of border residents on both sides.

This effort to revive trade is part of a wider push to normalize relations. Recent developments include plans to restart direct flight services between India and China and the easing of certain trade restrictions, such as on fertilizer exports. Moreover, Indian Prime Minister Narendra Modi is expected to visit China in August for the Shanghai Cooperation Organisation summit. During this visit, a bilateral meeting with Chinese President Xi Jinping is anticipated, further signaling warming ties.

Even though this border trade is economically minor compared to overall trade between India and China, its resumption would represent a symbolic step towards reconciliation after years of frozen relations.

The discussions show both countries’ interest in building confidence and reducing border tensions, suggesting a cautious but hopeful move forward in their complex relationship.

Overall, the revival of border trade is more than just commerce—it could gradually restore trust and stability between India and China after a prolonged period of hostility and silence on the border front.

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