After 5 Years of Silence, China And India To Reopen Border Trade Gates - Report

 India and China are discussing the resumption of border trade in locally made goods after a hiatus of more than five years, in what officials describe as a gradual thaw in strained ties between the Asian neighbours.

According to officials in New Delhi familiar with the matter, both countries have proposed reopening designated trading points along their shared Himalayan border. The discussions remain ongoing and confidential.

China’s Ministry of Foreign Affairs confirmed Beijing’s willingness to work with India on the initiative, telling Bloomberg News Thursday:
“Border trade between China and India has long played an important role in improving lives of the two countries’ border residents. China is willing to step up communication and coordination with India on the matter.”

India’s Ministry of External Affairs did not respond to emailed requests for comment.

Decades-Old Trade Route Shut Since 2020
For over 30 years, India and China traded goods such as spices, carpets, wooden furniture, cattle fodder, pottery, medicinal plants, electrical items, and wool through three approved border points along their 3,488-kilometre (2,167-mile) frontier.

Trade value was modest, about $3.16 million in 2017–18, the latest available government data shows, but it was vital for communities in remote mountain regions.
These routes were closed during the Covid-19 pandemic, just as relations between the two countries worsened following a deadly Himalayan border clash in 2020 that killed 20 Indian soldiers and at least four Chinese troops.

Signs of Thaw: Flights, Trade Curbs Eased
The talks on resuming border trade come as part of broader steps toward normalisation. Bloomberg News reported earlier this week that direct flights between the two countries could resume as soon as next month. Beijing has also relaxed restrictions on some fertiliser shipments to India.

Both countries engaged in military disengagement efforts last year to reduce tensions at disputed border points.

Modi-Xi Meeting Likely in August
Prime Minister Narendra Modi is expected to visit China for the first time in seven years in August to attend the Shanghai Cooperation Organisation (SCO) summit, hosted by Beijing. A bilateral meeting with Chinese President Xi Jinping is likely on the sidelines.

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Global Context: India-U.S. Tensions Rising
The improving India-China dynamic comes amid worsening trade relations between New Delhi and Washington. U.S. President Donald Trump has recently imposed a 50% tariff on Indian exports to the United States, a rate significantly higher than that applied to several regional peers.

If finalized, the border trade reopening could be a symbolic and practical boost to regional economic cooperation, particularly for Himalayan border communities long dependent on this commerce.

(With Inputs From Bloomberg)