India-China Border Dispute & Trade Relation in 2023

India-China border dispute


The India-China border dispute is a long-standing territorial conflict between India and China over the border regions of Aksai Chin and Arunachal Pradesh. China use Sun Tzu’s philosophy which was a Chinese military strategist and philosopher who win the war without fighting. He is best known for his treatise on military strategy, The Art of War. Recent Chinese threats, such as the naming of locations in Arunachal Pradesh, the refusal of passports to Indian media employees, and the President’s pronouncements about preparing for war, have strained relations between India and China.

What is The Cause of the Indo-China Dispute?

Over the past nearly 75 years, there have been periods of dispute and partnership in India-China relations.

1. Historical factors

  • The boundary territories separating India and China were significantly shaped by the British Raj in India. The colonial powers built trade and transportation channels and made contracts with local authorities, which served as the foundation for the current borders. However, disagreements have arisen as a result of some areas lacking a clearly defined border and both nations’ varying interpretations of the treaties.
  • China argues that both Aksai Chin and Tibet have been a part of its territory for many years. While Tibet has always maintained strong cultural and religious links with India, India sees Tibet as a separate country.
  • India claims that Aksai Chin province is a part of Jammu & Kashmir’s Ladakh region, which joined India in 1947. In a similar vein, China considers Arunachal Pradesh to be a part of southern Tibet, whereas India recognizes it as an important part of its territory.

2. Political Factors

  • The border problem, whose origins go back to the Sino-Indian War of 1962, is the main reason for the conflict between India and China. The Line of Actual Control (LAC), a 3,440-kilometer common border between the two nations, is the subject of a protracted territorial dispute.
  • The conflict has also been exacerbated by political tensions between China and India. China is a one-party nation with an entirely separate political framework and ideology from India, which is a democracy.
  • Political aspects of the conflict, such as patriotism and territorial integrity, also play a role. Large and populous nations with numerous claims regarding their respective regions are China and India. Therefore, the border region conflict is considered a question of sovereignty and national pride.

Also Read: What is China Taiwan Conflict in 2023

3. Strategic Factors

  • For both nations’ military and economic interests, the border territories are strategically significant. The Himalayan ranges, which are crucial to both nations’ security and defense, are where the contested areas are located. The areas are also abundant in natural resources like timber, water, and minerals.
  • There is a battle for superiority as China and India both modernize their armed forces. India’s purchase of cutting-edge weapons, such as fighter aircraft and submarines, has been interpreted as a reply to China’s expanding military might.
  • The regional powers India and China have diverse governmental structures, economic structures, and strategic objectives. As a result, that is a natural battle for power and influence in the region between the two nations.

4. Economic Competition

  • India and China have a significant trade deficit, meaning that India imports more commodities from the Chinese than it exports. Indian policymakers are now worried about how Chinese imports may affect their country’s economy.
  • India sees China’s increasing economic and military power as a threat to its national security, and this has led to a more cautious approach toward economic engagement with China.
  • India has adopted a more circumspect stance toward commercial cooperation with China as a result of its perception that China’s rising economic and military dominance poses a risk to its national security.

What Agreements are Done to Reduce Border Disputes?

  1. The Panchsheel Agreement: This was a treaty signed between India and China in 1954 that aimed to promote peace and cooperation between the two countries. One of the principles of the agreement was respect for each other’s territorial integrity and sovereignty, which was meant to help settle the border dispute. However, the agreement did not lead to a resolution of the dispute.
  2. The Joint Working Group: In 1988, India and China set up a joint working group to address the border dispute. The group was made up of senior officials from both countries and met regularly to discuss the issue. However, this mechanism also did not lead to a resolution of the dispute.
  3. The Confidence-Building Measures: In the 1990s, India and China agreed on several confidence-building measures, such as maintaining a minimum distance between their military forces along the border and conducting joint military exercises. These measures aimed to reduce tensions between the two countries and create a favorable atmosphere for negotiations.
  4. The Border Personnel Meeting: Since 2005, India and China have held regular Border Personnel Meetings (BPMs) to maintain peace and tranquility along the border. These meetings are held between local military commanders from both sides and are meant to prevent any accidental clashes or misunderstandings.
  5. The Special Representatives Talks: In 2003, India and China appointed special representatives to lead negotiations on the border dispute. The talks have been ongoing since then and have made some progress, such as the agreement on the “Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question” in 2005. However, a final resolution of the dispute has not yet been reached.
  6. The Disengagement Agreement: In 2020, India and China signed a disengagement agreement to reduce tensions along the Line of Actual Control (LAC) in the Ladakh region. The agreement led to the withdrawal of troops and weapons from the disputed areas, but the border dispute remains unresolved.

Impact of Indo-China Border Dispute on India

  1. Military tensions: The most immediate impact of the border dispute has been the military tensions between the two countries. In 2020, tensions between India and China escalated to the worst point in decades, resulting in violent clashes in the Galwan Valley, in which 20 Indian soldiers were killed.
  2. Economic impact: The border dispute has also had an impact on India’s economy. There has been a call for a boycott of Chinese goods and services, which has led to a decrease in imports from China. Additionally, Chinese investments in India have decreased due to the tensions.
  3. Geopolitical impact: The India-China border dispute has also impacted India’s geopolitical relationships. India has strengthened its ties with the United States and other countries in the Indo-Pacific region as a way to counter China’s influence.
  4. Nationalism: The border dispute has also resulted in a rise in nationalism in India. The government has capitalized on this sentiment, and there has been an increase in anti-China rhetoric in the country.
  5. Strategic impact: The border dispute has also led to a reassessment of India’s strategic posture. India has increased its defense spending and modernized its armed forces to better deal with threats from China.

Impact of Indo-China Border Dispute on the World

  1. Regional stability: The border dispute between two of the world’s most populous countries has had implications for regional stability in Asia. It has raised concerns about the potential for a broader conflict and has led to a buildup of military forces in the region.
  2. Economic impact: The India-China border dispute has had an impact on global trade, as both countries are major economic powers. The dispute has led to a decrease in trade between the two countries, and there have been calls for a boycott of Chinese goods and services.
  3. Geopolitical impact: The border dispute has impacted the geopolitical relationships between India and other countries in the region. India has strengthened its ties with the United States and other countries in the Indo-Pacific region as a way to counter China’s influence. This has led to a shift in the balance of power in the region.
  4. International law: The border dispute has also raised questions about international law and the role of international organizations in resolving disputes between countries. The United Nations has called for a peaceful resolution to the conflict, but progress has been slow.
  5. Strategic impact: The border dispute has also had strategic implications for the world. It has led to a reassessment of India’s strategic posture, and the country has increased its defense spending and modernized its armed forces to better deal with threats from China. This has led to concerns about an arms race in the region.

How is Indo-China Trade Relation?

  1. India Import from China
  • China’s slowdown and supply problems have not decreased its proportion of India’s overall imported goods, and in terms of absolute value, India’s imports from China in 2021–22 will be much greater than they were before the Covid agreement.
  • The UAE was India’s second-largest supplier of goods in 2020-21 and 2021-22, with import shares of 6.7% and 7.31%, respectively. In 2020-21 and 2021-22, China’s share of India’s imports reached record highs of 16.53% and 15.43%, respectively.
  • India mainly imports plastic items, pharmaceuticals, organic chemicals, and electrical and electronic products from China. Over 70 percent of India’s purchases from China are made up of these commodities.

2. India Export to China

  • The Ministry of Trade and Industry’s data shows that India’s exports to China have been increasing substantially in recent years.
  • The exports of India to China totaled $21.2 billion in the fiscal year 2020–21, a rise from $16.7 billion the previous year.
  • Biological chemicals, cotton yarn, ores, copper, and organic chemicals are among India’s top exports to China. However, India still imports more from China than it exports, creating a significant trade deficit.

3. Deficit in bilateral trade

  • India and China have a significant and expanding bilateral trade deficit. India’s trade imbalance with China was approximately $73.3 billion in 2021–2022; it is anticipated to surpass $100 billion in Fiscal Year 23.
  • 38–40% of India’s overall merchandise trade deficit in the post-Covid era is attributable to its trade imbalance with China.
trade defict

What Should be The Way Forward On Indo-China Border Dispute?

  1. Diplomatic Dialogue: India and China should continue to engage in regular diplomatic dialogue to try and find a mutually acceptable solution to the border dispute. This dialogue could be at various levels, including bilateral meetings between the two country’s leaders or talks between their respective foreign ministries.
  2. Confidence-building measures: Both countries could take steps to build mutual trust and confidence by engaging in joint military exercises, cultural exchanges, and economic cooperation. This could help reduce tensions along the border and create a more conducive atmosphere for resolving the dispute.
  3. Border infrastructure development: India and China could work towards developing infrastructure along the border to improve connectivity and facilitate trade. This could help to reduce the economic disparities between the two countries and could act as a confidence-building measure.
  4. 4. Strengthening Defense Capabilities: Given the history of the border dispute and the possibility of future conflicts, both countries need to continue strengthening their defense capabilities. This could involve modernizing their armed forces, improving their intelligence capabilities, and enhancing their border surveillance systems.
  5. 5. International mediation: If bilateral efforts fail to yield results, both countries could consider seeking mediation from a neutral third party. This could involve the United Nations or another international organization that both countries trust.


The India-China border dispute is a complex and long-standing issue that dates back to the 1950s. The disputed border covers around 3,500 kilometers and has been a source of tension between the two countries, with both sides accusing each other of territorial aggression. The recent border clash in June 2020, in which 20 Indian soldiers were killed, has escalated tensions between the two countries. The two sides have engaged in talks to resolve the dispute, but progress has been slow. Resolving the India-China border dispute will require a long-term diplomatic effort that addresses the underlying causes of the conflict.

Frequently Asked Questions (FAQs)

  1. What is the trade between India and China in 2023?

    China’s exports to India decreased by 0.9% in the first half of 2023 to $56.53 billion, while its imports from India decreased by 0.6% for the same period to $9.49 billion, according to figures given by China’s customs agency on Thursday, June 13.

  2. What are the disputed borders between India and China?

    The LAC has been split into three sectors by the Indian military: the eastern sector, which includes Sikkim and Arunachal Pradesh states, the central sector, which includes Himachal Pradesh and Uttrakhand, and the northern sector, which includes Ladakh and the Chinese-held Aksai Chin.

  3. What is the relationship between India and China regarding trade?

    China is India’s largest importer, accounting for more than two times the country’s total imports. India may be up to 25% or more dependent on China for non-oil imports. Given that China has been India’s main supplier of imports for the past 15 years, India’s commercial relations with China are important.

  4. What are the main causes of conflict between India and China?

    India’s stance on the disputed boundaries and China’s perception of Indian subversion in Tibet were two of the key causes building up to China’s ultimate battles with Indian forces.


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