Beyond Lipulekh: How India And China Are Reopening Trade, Travel And Ties One Step At A Time

Beyond Lipulekh: How India And China Are Reopening Trade, Travel And Ties One Step At A Time

India and China have decided to resume border trade through the Lipulekh Pass in Uttarakhand from June 2026, ending a six-year suspension that began with the Covid-19 pandemic. The Ministry of External Affairs has formally notified local authorities to prepare for the reopening, which is expected to run through the summer months and will involve issuing trade passes and setting up customs and other infrastructure in the Pithoragarh district — a move seen as restoring a historic commercial link that dates back decades and complements the revival of the Kailash Mansarovar Yatra via the same route.

This restart is part of a broader India-China agreement to reopen traditional Himalayan trading points that also includes Shipki La in Himachal Pradesh and Nathu La in Sikkim.

However, the decision has reignited diplomatic sensitivities, especially with Nepal, which maintains that the region encompassing Limpiyadhura, Lipulekh and Kalapani lies within its sovereign territory. Kathmandu’s Ministry of Foreign Affairs reiterated its position that these areas are “integral parts of Nepal" as per its constitutionally adopted map, and urged New Delhi not to undertake trade or other activities there.

In response, India’s MEA spokesperson Randhir Jaiswal stressed that the government’s stance has been “consistent and clear," pointing out that “border trade between India and China through Lipulekh Pass commenced in 1954 and has been going on for decades," and dismissing the expanded territorial claims as “neither justified nor based on historical facts or evidence." At the same time, New Delhi has said it remains open to constructive interaction with Nepal to resolve outstanding boundary issues through dialogue.

Besides reopening trade through the Lipulekh Pass route, there have been a number of other notable steps between India and China in the past year or so aimed at restoring ties that were strained both by the Galwan clash in 2020 and by COVID-19 restrictions. These are all part of a cautious but meaningful attempt by both sides to ease tensions and restart people-to-people and economic connections. Here’s a look at some of these steps:

The resumption of the Kailash Mansarovar Yatra this year has been one of the most visible signs of a cautious thaw in India–China ties after more than half a decade of disruptions. India’s Ministry of External Affairs made clear early on that discussions with Beijing were progressing, with spokesperson Randhir Jaiswal stating, “The yatra will happen this year, and we are making preparations. More information will be put out for the public soon," underscoring New Delhi’s intent to revive a route that had been dormant since 2020 due to the COVID-19 pandemic and subsequent geopolitical tensions.

A spokesperson from China’s Ministry of Foreign Affairs, Guo Jiakun, said, “As agreed between China and India, the pilgrimage will resume this summer. Preparations are now underway on both sides," highlighting Beijing’s recognition of the pilgrimage’s importance in cultural and people-to-people exchanges. The statement added that 2025, being the 75th anniversary of diplomatic ties between the two countries, made such steps toward cooperation especially meaningful.

Beyond Lipulekh, New Delhi and Beijing have also agreed to restart trade through two other long-standing Himalayan routes — Shipki La in Himachal Pradesh and Nathu La in Sikkim — reviving channels that had fallen silent after the 2020 border crisis and pandemic-era closures. These passes were formally opened for border commerce decades ago and have traditionally supported small traders, seasonal markets and cross-border community linkages in remote mountain regions. Officials see their reopening as a practical step to restore livelihoods in frontier districts while also reflecting a measured attempt by both sides to stabilise ties. The move fits into a wider pattern of gradual re-engagement that includes discussions on restarting direct flights, easing visa processes and continuing boundary talks through established diplomatic mechanisms.

After almost five years of suspended air connectivity, New Delhi and Beijing have agreed to bring back non-stop commercial flights, restoring a key transport link that had been severed in 2020. The resumption of direct services — expected to roll out in phases — is being seen as a practical confidence-building measure that will make business travel easier, reduce transit costs for companies operating in both markets, and reopen smoother routes for students, tourists and families. Aviation officials say airlines on both sides are working through regulatory clearances, seat entitlements and scheduling logistics so operations can stabilise after a long gap. Beyond convenience, the move carries diplomatic weight: direct skies are often one of the clearest signals that two governments are willing to normalise engagement and rebuild everyday economic and people-to-people exchanges.

In 2025, India’s decided to resume issuing tourist visas to Chinese citizens after a five-year suspension. Beginning 24 July 2025, Chinese nationals were once again allowed to apply for Indian tourist visas at missions in Beijing, Shanghai and Guangzhou, marking the first time since 2020 that routine travel for leisure, culture and personal visits was formally restored. New Delhi’s embassy in Beijing said applicants could now complete the online forms and submit documents in person, a step seen as part of broader confidence-building measures alongside the resumption of direct flights and pilgrimages. Beijing welcomed the announcement: China’s Foreign Ministry spokesperson Guo Jiakun called it “a positive move" and said, “China stands ready to maintain communication and coordination with India to keep facilitating people-to-people exchanges between the two countries."

India has recently eased some of its Foreign Direct Investment (FDI) rules, focused specifically on countries that share a land border with India — including China — and make it easier for investors from these countries to put money into Indian companies under defined conditions.

Under the revised rules, the Department for Promotion of Industry and Internal Trade (DPIIT) has amended the FDI framework so that firms with up to 10 per cent shareholding linked to China can now invest via the “automatic route" — meaning they no longer need prior government approval for such minority participation in Indian businesses. Previously, almost all investment from entities connected to border countries required case-by-case scrutiny under Press Note 3 (PN-3) introduced in 2020.

Additionally, changes to PN-3 now allow Indian companies to offer employee stock ownership plans (ESOPs) to staff based in China and neighbouring regions, and enable non-resident Indians (NRIs) based there to participate more easily in Indian markets without extra approvals.

A key stabilising step in the recent phase of India–China engagement has been the October 2024 understanding on border patrol arrangements along the Line of Actual Control (LAC), aimed at preventing fresh face-offs and restoring predictable ground rules for troops deployed in sensitive sectors. The agreement focused on disengagement protocols, coordinated patrolling schedules and mechanisms to avoid physical confrontation in friction points, particularly in eastern Ladakh where tensions had persisted since 2020. Following the talks, India’s Ministry of External Affairs said the two sides had reached “agreement on patrolling arrangements along the LAC in the India-China border areas," adding that this was the result of “sustained diplomatic and military discussions" and would help move the relationship toward “disengagement and de-escalation."

Officials indicated that restoring structured patrol routines was essential to reducing the risk of accidental escalation while broader boundary negotiations continue.

A meeting between Prime Minister Narendra Modi and China’s President Xi Jinping in August 2025 paved way for better ties between the two countries, especially amid rapidly changing geopolitical equations. The meeting took place on the sidelines of theShanghai Cooperation Organisation (SCO) Summit in Tianjin. Both leaders held bilateral discussions on 31 August on the margins of the multilateral summit, marking one of the highest-level encounters since the 2020 LAC tensions. Modi’s visit, the first to China since the border standoff with Beijing, was seen as a diplomatic effort to reinforce dialogue and ease tensions through structured engagement within the SCO framework.

Source: News18
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