India and China are in advanced discussions to restart cross-border trade in locally produced goods after a five-year halt, signaling a cautious thaw in one of Asia’s most closely watched geopolitical rivalries.
Officials familiar with the matter say both governments are considering reopening designated trade points along their 3,488-kilometer Himalayan frontier — the same routes that previously handled niche but symbolically important commerce in goods such as spices, carpets, medicinal plants, wooden furniture, and wool.
Although the annual trade value was small — just $3.16 million in 2017–18 — the exchanges played a strategic role in sustaining livelihoods in remote, high-altitude communities. The routes were shuttered during the COVID-19 pandemic, coinciding with the 2020 Galwan Valley clashes that left soldiers dead on both sides and plunged relations to their lowest point in decades.
The move to resume border trade comes amid a broader normalization push: both countries are preparing to restore direct flights, China has eased curbs on certain fertilizer exports to India, and Prime Minister Narendra Modi is expected to travel to China in August for the Shanghai Cooperation Organisation summit, where a bilateral meeting with President Xi Jinping is likely.
For New Delhi, the recalibration comes as global trade dynamics shift. The U.S. has recently imposed steep tariffs on Indian exports, creating an additional incentive to stabilize ties with Beijing and secure regional supply lines.
If implemented, the reopening of these trading posts may carry limited macroeconomic weight, but the diplomatic impact could be more significant. It would represent a tangible de-escalation in a volatile relationship that influences both regional security and Asia’s broader economic integration.
