China, India In Talks To Revive Border Trade Halted Since 2020

India and China are discussing resuming border trade of locally made goods after more than five years, marking the latest step in a slow but steady effort by the Asian neighbors to ease long-standing tensions, according to officials in New Delhi familiar with the matter.

Both sides have proposed restarting trade through designated points on the shared border, and the matter is currently under bilateral discussion, the people said, asking not to be identified as the discussions are still private.

China’s Ministry of Foreign Affairs said Thursday that Beijing is “willing to step up communication and coordination with India” on the matter. “Border trade between China and India has long played an important role in improving lives of the two countries’ border residents,” it said in a response to a query from Bloomberg News.

India’s Ministry of External Affairs didn’t respond to an email seeking further information.

For over three decades, India and China had traded locally produced goods — such as spices, carpets, wooden furniture, cattle fodder, pottery, medicinal plants, electric items, and wool — through three designated points along their 3,488-kilometer (2,167-mile) disputed Himalayan border. The trade value is relatively small, estimated at just $3.16 million in 2017–18, according to the most recent government data available.

The trading points were shut during the Covid-19 pandemic, which coincided with a sharp decline in relations between the two nations after border clashes in the Himalayas killed 20 Indian soldiers and at least four Chinese troops.

The planned resumption marks another sign that relations between the two neighbors are gradually improving after both sides took steps last year to end border tensions. China and India are set to resume direct flight connections as soon as next month, Bloomberg News reported Tuesday, while Beijing has eased curbs on some fertilizer shipments to India.

Prime Minister Narendra Modi is expected to head to China for the first time in seven years in August to attend a summit of the Beijing-led regional security grouping — the Shanghai Cooperation Organisation — and hold a bilateral meeting with President Xi Jinping on the sidelines.

The normalizing in ties between the two countries come against the backdrop of deteriorating relations between New Delhi and US President Donald Trump, who has imposed a 50% tariff rate on Indian exports to the US, significantly higher than the duties imposed on regional peers.