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How a Border Dispute Bedevils Ties Between India and China

(Bloomberg) -- China and India, nuclear-armed neighbors, have had thousands of troops facing off in a disputed region of the Himalayas since 2020, when skirmishes led to the first deadly clashes in four decades. New Delhi has hit back economically as well by blocking investment and curtailing access to the vast Indian market for Chinese tech firms especially. Several rounds of talks to resolve the dispute have made incremental progress. Any resolution likely would do little to affect broader geopolitical currents, however. The US and its allies have been seeking to draw India closer into a democratic coalition as a bulwark against China’s growing clout, while China is seeking allies in its efforts to counter what it sees as Western hegemony. 

1. What’s the China-India border dispute about?

In 2020, China surprised India by deploying troops in Ladakh, a remote part of northernmost India abutting Tibet (an autonomous region of China). The 3,488 kilometer (2,167 miles) border is not demarcated on the ground and the reason for the maneuver remains unclear. But earlier actions by India regarding the territories of Ladakh, whose people are culturally close to Tibet and Kashmir, had drawn angry responses from China, which accused India of seeking “to undermine its territorial sovereignty.” 

The confrontation in June that year was centered on the Galwan River area and Pangong Tso, a glacial lake at 14,000 feet (4,300 meters) in the Tibetan plateau. Twenty Indian soldiers and at least four Chinese soldiers were killed. In September that year, the two countries pledged to de-escalate tensions. The two sides have pulled back troops from some areas, but friction points along the disputed boundary remain.  

2. What’s the impact been?

Following the 2020 clash, India blocked hundreds of Chinese mobile applications and services, including TikTok and WeChat. It cut back on visas for business travel and mandated extra checks for investments from China. New Delhi has imposed curbs on imports of electronic devices such as laptops and tablets that are likely to hit China harder any other country. A $1 billion proposal from Chinese carmaker BYD Co. to build an electric vehicle plant was rejected by Indian officials on grounds of security concerns. 

The border crisis also has accelerated India’s engagement with the US and its allies, from whom it seeks technology to ramp up domestic manufacturing as Western companies seek alternatives to Chinese factories. The Quad — a security framework with the US, Japan and Australia — has been revived and has held naval exercises in the Indian Ocean. India’s military has studied options for how it could assist the US in case of war over Taiwan, which China’s government regards as lost territory. Despite these developments, India is still heavily reliant on China for components and raw materials to manufacture local products. China is one of India’s largest trading partners. 

3. What’s the situation now?

After a gap of nearly two years, Beijing appointed a new ambassador to India in May 2024, signaling an intent to normalize relations. In July, the foreign ministers of the two countries said that the border conflict wasn’t in either side’s interest and agreed to hold more talks. Indian Prime Minister Narendra Modi, however, skipped the July summit of the Shanghai Cooperation Organization in Kazakhstan, where it was widely expected that a meeting between him and Chinese President Xi Jinping would open an avenue for deescalation. In 2023, Xi had failed to attend the Group of 20 summit in New Delhi in an unexplained snub. 

4. What’s the geopolitical backdrop?

More broadly, both countries are looking for more global influence as part of an effort to counterbalance the dominance of the US, including by conducting more trade in their local currencies instead of the dollar. Both have maintained ties with Russia despite its invasion of Ukraine, though the war has exposed for India the dangers of relying on Moscow for a steady supply of weaponry. By working with the Quad, Modi is positioning India as a bulwark against China and wants America and its allies to provide critical technology and develop its manufacturing base. China, meanwhile, has lambasted the Quad as a mechanism to contain its global rise. It has projected its power with patrols in the Indian Ocea, warily watched Modi’s attempts to woo factory jobs as the US-China “decoupling” progresses while making investment deals with India’s neighbors, namely Pakistan, Sri Lanka and Nepal.

5. What’s the history of the India-China border conflict?

It dates back to the 1950s. Skirmishes were reported after India granted asylum to the Dalai Lama following an uprising against Chinese rule in Tibet in 1959. War broke out three years later after China objected to India establishing outposts along the effective boundary, established by the British in 1914, between the Tibetan region and Northeast India. The current “Line of Actual Control” that forms the unmarked and ambiguous border partially adheres to the British-drawn boundaries. 

Clashes were again reported in 1967 and then in 1987 in what’s sometimes referred to as the loudspeaker war — no bullets were fired and soldiers simply kept shouting at each other via loudspeakers. Relations improved as the two governments signed five treaties between 1993 and 2013, with both countries prioritizing economic growth. The border remained mostly calm through 2017, when troops faced off for several months at Doklam, a plateau near the Indian border in the east that is claimed by both China and Bhutan. 

--With assistance from Dan Strumpf.

©2024 Bloomberg L.P.

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