India, China in talks to resume border trade after 5-year freeze: Report

India and China are in discussions to reopen border trade of locally made goods after a gap of more than five years, Bloomberg News reported on Thursday, in a fresh sign of easing tensions between the two Asian neighbours.

According to the report, talks are underway to resume the exchange of goods through designated trading points along the 3,488-km disputed Himalayan frontier.

China’s Ministry of Foreign Affairs said Beijing is “willing to step up communication and coordination with India” on the issue.

“Border trade between China and India has long played an important role in improving lives of the two countries’ border residents,” the ministry said in response to a query from Bloomberg News.

For over three decades, both countries traded in items such as spices, carpets, wooden furniture, cattle fodder, pottery, medicinal plants, electric goods and wool through three approved points.

According to official data, trade through these routes was valued at USD 3.16 million in 2017–18, before it was suspended during the COVID-19 pandemic.

The suspension coincided with a sharp deterioration in bilateral ties after the June 2020 clashes in the Galwan Valley that claimed lives on both sides.

The military standoff in eastern Ladakh ended last year following a disengagement agreement covering the last two friction points of Demchok and Depsang, reached on October 21.

Since then, the two sides have taken steps to rebuild ties, including the resumption of the Kailash Mansarovar Yatra, the restarting issuance of tourist visas for Chinese nationals, and Beijing easing restrictions on some fertiliser exports to India.

Direct passenger flights between the two countries are also expected to resume as early as next month.

Prime Minister Narendra Modi is expected to visit China for the first time in seven years to attend the Shanghai Cooperation Organisation (SCO) summit in Tianjin on August 31–September 1. He is likely to hold a bilateral meeting with President Xi Jinping on the sidelines.

Ahead of Modi’s visit, Chinese Foreign Minister Wang Yi will travel to New Delhi on Monday for the next round of the Special Representatives dialogue on the boundary question with National Security Advisor Ajit Doval. Wang is also expected to meet External Affairs Minister S Jaishankar.

The renewed engagement with Beijing comes amid strain in New Delhi’s ties with Washington, with US President Donald Trump imposing a 50% on Indian exports, much higher than on other regional economies.