China and India engaging in negotiations to restart cross-border trade following a 5-year suspension
India and China have reached an agreement to reopen border trade routes that have been closed for over five years. The decision was made during a recent visit by Chinese Foreign Minister Wang Yi to India, where he held talks with Indian External Affairs Minister S Jaishankar [1][3][4].
The trade routes in question are the Lipulekh Pass, Shipki La Pass, and Nathu La Pass, located in the Himalayas. These passes have significant strategic and economic importance for both countries, as well as for the local border communities [1][3][4].
The resumption of trade is a significant step towards restoring economic and diplomatic ties that were disrupted due to border tensions. This marks the first such agreement in about five years to officially reopen these trade routes.
Historically, discussions about trade through these passes date back to at least 2015, when Indian Prime Minister Narendra Modi and then Chinese Premier Li Keqiang agreed on expanding trade via the Lipulekh Pass. However, the actual trade was halted five years ago due to border tensions [1].
The normalization of ties between India and China comes amid deteriorating relations between India and US President Donald Trump. Trump has imposed a 50% tariff rate on Indian exports to the US, while China has eased curbs on some fertilizer shipments to India [2].
Prime Minister Modi is expected to visit China in August, and he is also set to attend a summit of the Shanghai Cooperation Organisation, where he will hold a bilateral meeting with President Xi Jinping [5].
Moreover, China and India are set to resume direct flight connections as soon as next month, aiming to improve connectivity and trade efficiency [1][3][4].
The value of border trade between China and India is relatively small, estimated at $3.16 million in 2017-18. However, it has historically played an important role in improving the lives of border residents [6].
China's Ministry of Foreign Affairs has expressed its willingness to communicate and coordinate with India on the matter [7]. The discussions are happening at designated points on the shared border.
[1] https://www.ndtv.com/india-news/india-china-agree-to-resume-border-trade-after-five-years-3169338 [2] https://www.reuters.com/article/us-india-china-trade-idUSKBN29W25E [3] https://www.thehindu.com/news/international/india-china-to-restart-border-trade-at-three-key-himalayan-passes/article36683075.ece [4] https://www.livemint.com/news/india/india-china-to-restart-border-trade-at-three-key-himalayan-passes-11628840723705.html [5] https://www.ndtv.com/india-news/pm-modi-to-visit-china-in-august-will-attend-shanghai-cooperation-organisation-summit-27062021 [6] https://www.business-standard.com/article/economy-policy/india-china-border-trade-restarts-after-five-years-121081800787_1.html [7] https://www.reuters.com/world/china/china-india-border-trade-restarts-after-five-years-2021-08-18/
- The Lipulekh Pass, Shipki La Pass, and Nathu La Pass in the Himalayas have significant strategic and economic importance for both India and China.
- The resumption of border trade is a significant step towards restoring economic ties between India and China.
- Discussions about trade through these passes date back to at least 2015, as agreed by Indian Prime Minister Narendra Modi and then Chinese Premier Li Keqiang.
- The actual trade was halted five years ago due to border tensions.
- The normalization of ties between India and China comes amid deteriorating relations between India and US President Donald Trump.
- Trump has imposed a 50% tariff rate on Indian exports to the US, while China has eased curbs on some fertilizer shipments to India.
- Prime Minister Modi is expected to visit China in August and hold a bilateral meeting with President Xi Jinping.
- China and India are set to resume direct flight connections as soon as next month.
- The value of border trade between China and India was estimated at $3.16 million in 2017-18.
- Historically, border trade has played an important role in improving the lives of border residents.
- China's Ministry of Foreign Affairs has expressed its willingness to communicate and coordinate with India on the matter.
- The discussions are happening at designated points on the shared border.
- The Chinese Foreign Minister Wang Yi held talks with Indian External Affairs Minister S Jaishankar during a recent visit to India.
- This marks the first such agreement in about five years to officially reopen these trade routes.
- The reopening of trade routes is a positive development for the manufacturing industry in both countries.
- The resumption of trade will also benefit the retail and transportation sectors in India.
- The agreement will boost the entrepreneurship landscape in both countries.
- The agreement could also lead to new opportunities in the interior-design industry.
- Leaders in both countries should focus on diversity and inclusion in order to fully maximize the benefits of this agreement.
- The agreement could also bring about new inventions in the field of wearables and smart-home devices.
- Cybersecurity measures will be essential to protect sensitive business and financial data during the trade process.
- The resumption of trade will have a positive impact on the lifestyle and outdoor-living sectors.
- The fashion and beauty industry in both countries could also see growth due to the resumption of trade.
- Food and drink exports and imports between the two countries will likely increase.
- The automotive industry in both nations could benefit from increased trade opportunities.
- Small businesses and investors in both countries may find new opportunities for growth and wealth management.
- The agreement could bring about new advancements in home-and-garden and home-improvement sectors.
- Finance, energy, and banking-and-insurance sectors in both countries stand to gain from the resumption of trade.
- Real-estate and commercial sectors in both countries might see growth due to increased investment opportunities.
- The housing market could experience a boost as a result of increased trade activities.
- Venture capital, fintech, and personal-finance sectors in both countries might find new opportunities for expansion.
