India and China are quietly engaging in talks to resume border trade of locally produced goods after a hiatus of more than five years. The talks, as reported by Bloomberg News, are currently in progress and aim to revitalize trade routes long closed due to geopolitical tensions and the COVID-19 pandemic.
Key Routes Under Discussion
The focus is on restarting trade through three designated Himalayan border passes:
- Lipulekh Pass in Uttarakhand
- Shipki La Pass in Himachal Pradesh
- Nathu La Pass in Sikkim
These routes were historically used to trade a variety of goods such as spices, carpets, wool, medicinal plants, wooden furniture, and electric items. Though the trade volume is modest—estimated at around $3.16 million in 2017–18—it holds high symbolic and economic value for the border communities involved
Background and Diplomatic Context
Trade was halted in 2020 amid the pandemic and growing border tensions stemming from the Galwan Valley clashes. The suspension coincided with a broader freeze in cross-border movement and services.
Recent diplomatic signals suggest a thaw in relations:
- In December 2024, India and China’s Special Representatives reached a six-point consensus that included plans to resume Nathu La border trade, Kailash Mansarovar pilgrimage, and trans-border river cooperation.
- In early 2025, officials convened under the Working Mechanism for Consultation and Coordination (WMCC) to lay groundwork for reviving cross-border exchanges.
- Additional progress came via agreements to stabilize ties, resume pilgrimages, and restore direct communication channels.
Why It Matters
- Diplomatic Symbolism — Restarting trade at these border passes signals progress toward normalizing long-fraught bilateral ties.
- Local Economic Boost — Trade can rejuvenate economies in isolated border regions, important for communities like the Rung traders near Lipulekh.
- Part of Broader Realignment — Alongside resumed flights, pilgrimage routes, and trade dialogues, this could mark a cautious but tangible shift towards economic stabilization between the two nations.
