Hot & Sour Soup
TIRADES TURN TO TRADE! 
DiplomatiQue/Yeshi Seli
Two powerful economies having indulged in myriad tirades - India and China have resumed trade through three Himalayan border passes. This includes the Nathula Pass (Sikkim), Shipki La (Himachal Pradesh) and Lipulekh (Uttrakhand).
Trade through these passes was stopped during the outbreak of Covid-19 pandemic followed by tensions around the India-China border. However, 2025 onwards there has been a positive thaw in the bilateral ties between the two countries.
Indian government sources point out that all administrative and logistical arrangements between the two countries were completed ahead of the reopening. This decision followed the 24th round of the India-China Special Representatives’ dialogue, co-chaired by National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi, a few weeks back.
During the talks, both sides agreed to gradually revive border trade through three Himalayan passes.
Nathula Pass (that was once a part of the ancient Silk Route) is situated at an altitude of 14,000 feet. Border trade through the pass resumed in 2006 after remaining shut for decades following the 1962 India-China war, but was suspended again in 2020.The opening of the Nathula Pass will benefit over 600 traders in Sikkim. Similarly, traders in Lipulekh are also celebrating the resumption of trade through land.
Trade through Nathula is limited to ‘approved’ items under a bilateral agreement. India traditionally exports products such as garments, blankets, tea, coffee and handicrafts, while imports from China’s Tibet Autonomous Region include raw silk, wool, yak hair and earthenware.
``China is India’s largest trade partner with bilateral trade touching $151.1 billion, during the recently concluded financial year. India’s second largest trade partner is the US ($140 billion) followed by the UAE.
Though trade with China has increased, there is a trade imbalance. While India imports stood at $131.5 billion, exports to China was $19.6 billion. Total trade deficit (mid-year) is around $112.16 billion.
``India’s imports from China have grown to $38.04 billion in the first quarter of the ongoing financial year (April-June 2026) which was a 28 per cent increase compared to the corresponding period of the previous year,’’ according to trade data published by the Ministry of Commerce and Industry.
Meanwhile, the bilateral trade between the two nations touched $91.72 billion during the first half of the year (trade deficit touching $67.1 billion). India’s imports from China surged to $79.41 billion which exports were $12.31 billion, according to Commerce Ministry.
``China has never deliberately pursued a trade surplus with India. A large share of India’s imports from China consists of electronic components, machinery and intermediate goods that support India’s manufacturing expansion, job creation and industrial upgradation. We welcome more premium Indian products into Chinese market,’’ said Yu Jing, Spokesperson of the Chinese Embassy in India.''
It may be recalled that China resumed the Kailash Mansarovar Yatra for Indians in 2025 through both Nathula and Lipulekh borders. Trade now has been resumed too which will restore cross-border exchanges.
In a run up to the resumption of trade, infrastructure project around the routes were improved to support seamless connectivity.
A new highway linking Rongli and Menla is under construction to provide a safer alternative to older roads that are prone to landslides. Officials say the upgraded infrastructure will improve the movement of goods, strengthen border logistics and support tourism in East Sikkim.
``The decision to resume trade from these borders dates back to August 19, 2025 which both India and China now taking forward. I would like to draw your attention to the press release that was issued on August 19, 2025. In that press release both sides had agreed that border trade through three designated trading points, namely Lipulekh, Shipki La, and Nathu La Pass would be resumed. Now those things are being taken forward,” said Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal.
It may be recalled that in August 2025, National Security Advisor (NSA) Ajit Doval met Chinese Foreign Minister Wang Yi in New Delhi and held a fresh round of Special Representatives (SR) dialogue on the boundary question. During the visit, the Chinese Foreign Minister also held bilateral talks with External Affairs Minister (EAM) S Jaishankar and called on Prime Minister Modi. According to the MEA, during the meeting between EAM Jaishankar and his Chinese counterpart Wang Yi, the two countries agreed to reopen border trade through the three designated trading points, including Lipulekh Pass, Shipki La Pass and Nathu La Pass. This was followed by continued high-level diplomatic engagements between the two sides.
Foreign Secretary Vikram Misri has just concluded a visit to Beijing, wherein he called on China's Vice Minister of Foreign Affairs, Hua Chunying, and acknowledged the importance of maintaining peace and tranquillity in the India-China border areas.
“Foreign Secretary Vikram Misri met Hua Chunying, Vice Minister of Foreign Affairs of China. They reviewed the entire gamut of bilateral relations. They discussed means of advancing the vision of the two leaders that India and China are partners and development opportunities for each other, including through mutually beneficial outcomes across trade and economic ties, culture, and people-to-people exchanges. Both sides acknowledged the importance of maintaining peace and tranquillity in the India-China border areas,” says the Embassy of India in China.
A few weeks back, Dr Jaishankar met Wang Yi in Manila on the sidelines of the ASEAN meetings. The duo held discussions on bilateral relations, border stability and key regional and global developments. In his opening remarks during the meeting with his Chinese counterpart, EAM Jaishankar termed peace and tranquility in the border areas a "prerequisite" for normal ties between India and China.
"Peace and tranquility in the border areas is obviously the prerequisite for normal ties. Since October 2024, both sides have engaged to ensure that important objective. This will continue to need our constant attention. Relevant mechanisms in this domain must be given full support and strong encouragement," the EAM said. In June, Wang Yi called on Prime Minister Narendra Modi along with other delegates attending the meeting of BRICS National Security Advisers and High Representatives on National Security in New Delhi.
(The article first appeared in Business India magazine. It has been reproduced with author’s permission. Tweaked for fnbworld.com style-sake.)
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Yeshi Seli is an award-winning journalist and a Guest Columnist with fnbworld.com {news for Soul}. She is a leading writer on geopolitics.
