Foreign ministry officials from both India and China have confirmed that they are in discussions to resume border trade, five years after it was halted. This move comes as U.S. tariffs disrupt the global trade order.
Historically, the volume of trade across the icy, high-altitude Himalayan passes between the two neighbors was small, but its potential resumption is highly symbolic. The two economic powers have long competed for strategic influence in South Asia. However, amid the global trade and geopolitical turmoil triggered by U.S. President Donald Trump’s tariff regime, both countries have sought to mend ties.
According to Indian media, Chinese Foreign Minister Wang Yi is expected in New Delhi on Monday for talks, following his counterpart Subrahmanyam Jaishankar’s visit to Beijing in July. These diplomatic exchanges, along with agreements to restore direct flights and issue tourist visas, are seen as efforts to rebuild a relationship strained by a deadly border clash in 2020.
“For a long time, China-India border trade cooperation has played an important role in improving the lives of people living along the border,” China’s foreign ministry stated to AFP on Thursday. It added that both sides have “reached a consensus on cross-border exchanges and cooperation, including resumption of border trade.” India’s junior foreign minister, Kirti Vardhan Singh, told parliament last week that “India has engaged with the Chinese side to facilitate the resumption of border trade.” Neither side provided a specific restart date.
Successive U.S. administrations have viewed India as a strategic ally with interests that align against China. India is a member of the Quad security alliance with the U.S., Australia, and Japan. However, ties between New Delhi and Washington have been strained by Trump’s ultimatum for India to stop buying Russian oil, which is a critical source of revenue for Moscow’s military efforts in Ukraine. The U.S. has threatened to double its new import tariffs on India from 25% to 50% by August 27 if New Delhi does not switch crude suppliers.
Indian media reports also suggest that Prime Minister Narendra Modi may visit China in late August, his first visit since 2018, though this has not been officially confirmed. Beijing has stated that “China welcomes Prime Minister Modi” for the Shanghai Cooperation Organisation summit, which opens on August 31.
