Six years after the Covid-19 pandemic closed the border, followed by the deadly Galwan Valley clash that badly damaged India-China ties, trade is resuming through three Himalayan passes on August 1.
India and China will reopen border trade through Nathu La in Sikkim, Lipulekh in Uttarakhand and Shipki La in Himachal Pradesh.
The move comes as India and China slowly try to bring their relationship back from the deep freeze that followed the 2020 Ladakh standoff. While the reopening is unlikely to bring a major jump in trade, experts say it could help border communities, tourism and people-to-people contact.
Why the three passes matter
The reopening is about much more than the small amount of goods that will cross the border.
“There is a geopolitical angle, which is also driven by trade uncertainties created by the USA or border uncertainties with Nepal,” said Dr Arpita Mukherjee, professor and economist at the Indian Council for Research on International Economic Relations (ICRIER).
“Trade is limited, but it will help tourism and local communities. The Kailash Mansarovar Yatra can be resumed. Tibet is on the other side, and hence there can be cultural exchanges,” Mukherjee told Financial Express.
Dr Nisha Taneja, Senior Visiting Professor, ICRIER, said the move should not be seen as a symbolic step alone. “The simultaneous reopening of Nathu La, Lipulekh and Shipki La after a six-year hiatus marks a significant turning point in India-China relations and signals a renewed commitment to expanding economic engagement,” she said.
“Together with other recent economic measures, including a more facilitative approach towards considering Chinese FDI proposals in India, it reflects a pragmatic, business-first approach to bilateral ties, even as the broader boundary dispute remains unresolved.”
Taneja said Nathu La is likely to be the most important of the three from a trade point of view.
“Border trade volumes are small, but Nathu La has historically accounted for the bulk of India-China land border trade, making its reopening the most consequential of the three,” she said.
This is not a return to big trade
The reopening does not mean large-scale business between India and China is about to restart through these mountain routes.
The three passes were closed in 2020 when the pandemic brought international travel and trade to a halt. Even after Covid restrictions were lifted in other parts of the world, the routes stayed shut because the Galwan Valley clash that year led to a major freeze in India-China relations.
Even before the shutdown, trade through these routes was small.
In 2019, trade was worth around ₹49 crore. That is tiny compared with India’s overall trade with China, which runs into tens of billions of dollars. The trade through the Himalayan passes is also very local.
Nathu La is located at more than 14,000 feet in East Sikkim. It lies along an old branch of the Silk Road. India reopened the pass for border trade in 2006 after it had remained closed since the 1962 India-China war.
Under the arrangement being brought back, only a limited number of licensed local traders will be allowed to trade. They will deal in a fixed list of goods, with India’s side reportedly having 36 approved items.
The trade season will also remain short because the passes close during winter. Nathu La trade normally takes place for about six months, from May to November.
Lipulekh has a much longer history as a trade route, with border trade through the pass dating back to 1992.
“Trade items are limited, and volume is small. There will be checks and balances for trade,” Mukherjee said.
“These are part of the ancient Silk route but are not a major trade route today. Cultural exchange, local community development and tourism circuits are more important than trade… Local communities are engaged in trade in products like wool or herbs. It will help them.”
Poor infrastructure remains a problem
For the reopening to bring bigger economic benefits, however, there is still a lot of work to be done. Taneja pointed to the poor infrastructure at some of the border trading points.
“Trade under the last operative Memorandum of Understanding was confined to a narrow positive list of commodities that has not been revised in over a decade, and infrastructure at trading posts such as Sherathang remains basic, lacking reliable power, connectivity, weighbridges, warehousing and permitted labour for loading and unloading,” she said.
The trading season is also limited to around six months because of the weather. Only a small number of local traders have licences to take part.
“For this reopening to translate into genuine economic dividends, India and China will need to revise the MOU, expand and regularly review the list of tradeable items, and invest in basic infrastructure and connectivity at the border points.”
Earlier, External Affairs Minister S. Jaishankar met Chinese Foreign Minister Wang Yi in Manila on July 22 and said border stability was a “pre-requisite” for restoring normal ties. Jaishankar also raised concerns over market access, the trade gap and supply chains. Both sides have stressed that differences should not turn into disputes, even as ties remain far from fully normal.
Direct flights are returning
Direct air links between India and China, which were suspended in 2020, have started coming back in stages in 2026.
Air India, IndiGo, Air China, China Eastern and China Southern have brought back routes connecting Indian cities such as Delhi, Mumbai and Kolkata with Chinese cities including Shanghai, Guangzhou, Kunming and Beijing.
Visa rules have also eased
Visa restrictions have also been relaxed on both sides. India has resumed issuing tourist visas to Chinese nationals after a suspension of around five years.
From January 1, 2026, India also introduced a new e-Business visa, known as e-B-4, aimed at making travel easier for Chinese professionals invited by Indian companies.
China has also made it easier for Indian travellers to get visas. It has removed mandatory online appointments, made processing faster and reduced visa fees.
Kailash Mansarovar Yatra gets another route
The reopening is also closely linked to the Kailash Mansarovar Yatra, the Hindu pilgrimage to Tibet. The pilgrimage route, which had remained suspended for five years, has already resumed through Lipulekh and Nathu La. With Shipki La reopening, it will now have a third route.
Both Mukherjee and Taneja pointed to the pilgrimage as one of the important benefits of reopening the Himalayan passes. The routes could also help revive tourism and cultural contact between communities on both sides of the border.
Experts warn against calling it a full reset
Despite all these changes, experts are warning against calling the latest developments a complete India-China reset.
An assessment published by the East Asia Forum in May said the improvement since the October 2024 border agreement was better described as “pragmatic stabilisation rather than a strategic reset.”
According to the paper, India and China have improved communication and restored several links, but that does not mean the deeper problems between them have disappeared. The two sides have yet to achieve genuine demilitarisation or a major reduction of troops along the Line of Actual Control.
The border dispute itself is still unresolved. So are the trade imbalance and the deep mistrust between the two countries.
The reopening of the three passes is unlikely to change the larger India-China border dispute or make a major difference to bilateral trade, which is worth more than $150 billion a year. Its biggest impact could instead be felt by traders, transporters and local businesses in Sikkim, Uttarakhand and Himachal Pradesh, along with tourism and the Kailash Mansarovar Yatra.
However, bigger gains will depend on better infrastructure, updated trade rules and wider access for local traders. For now, the move is a small but important step towards rebuilding ties after six years of strained relations, even as the border dispute, Nepal’s objections and the trade imbalance remain unresolved.