India-China Border Trade Resumption Sparks Nepal Protests: Lipulekh Pass Dispute Reignites in 2025

Introduction

In a significant diplomatic development, India and China have agreed to resume border trade through key passes, including the contentious Lipulekh Pass in Uttarakhand, as part of broader efforts to normalize relations strained by the 2020 Galwan Valley clash. This announcement, made following Chinese Foreign Minister Wang Yi's visit to India on August 18-19, 2025, has reignited tensions with Nepal, which claims Lipulekh as its sovereign territory. Nepal's Foreign Ministry issued a strong protest, urging both nations to halt activities in the area, while India firmly rejected these claims, citing historical precedents dating back to 1954. This move not only aims to boost economic ties between Asia's two largest economies but also highlights the complex geopolitics of the Himalayan region. As of August 25, 2025, protests in Nepal underscore the ongoing tri-junction dispute involving India, China, and Nepal, with potential implications for regional stability and trade.

Background of India-China Border Relations

India and China share a 3,488 km-long border, much of which remains undemarcated, leading to periodic standoffs. Border trade between the two nations was historically conducted through passes like Lipulekh (in Uttarakhand), Shipki La (in Himachal Pradesh), and Nathu La (in Sikkim). However, trade was halted in 2020 due to the COVID-19 pandemic and escalated military tensions along the Line of Actual Control (LAC). The Galwan Valley clash in June 2020 resulted in casualties on both sides and a freeze in economic engagements, including border trade.

Efforts to thaw relations began with multiple rounds of military and diplomatic talks. By 2025, disengagement at several friction points, such as Pangong Tso and Gogra-Hot Springs, paved the way for confidence-building measures. Wang Yi's visit marked a milestone, focusing on economic cooperation amid global supply chain disruptions. The joint statement emphasized resuming trade to benefit local communities in border areas, where economies rely on cross-border exchanges of goods like wool, salt, herbs, and handicrafts.

Details of the India-China Agreement

The agreement, announced on August 19, 2025, includes several key components aimed at enhancing bilateral ties:

• Resumption of Border Trade: Trade will restart through Lipulekh, Shipki La, and Nathu La passes. This revives a route operational since 1954, facilitating the exchange of traditional goods. Indian traders in Uttarakhand have welcomed the move, anticipating an economic boost for remote villages.
  

• Expansion of Kailash Mansarovar Pilgrimage: China agreed to increase pilgrim quotas and improve facilities for Indian devotees traveling to the sacred site in Tibet.
  

• Aviation and Connectivity: Direct flights between India and China will resume, with updates to the Air Services Agreement to allow more routes and carriers.
  

• Multilateral Support: Both nations pledged mutual backing for their BRICS presidencies—India in 2026 and China in 2027—focusing on economic resilience.
  

• Other Measures: Enhanced cooperation in data sharing on trans-border rivers and promotion of Indian yoga and traditional medicine in China.
  

This pact is seen as a pragmatic step, with annual border trade potentially reaching $2-3 billion, benefiting pastoral communities and reducing smuggling. However, the inclusion of Lipulekh has drawn international attention due to Nepal's territorial claims.

Nepal's Objections and Protests

Nepal's response was swift and vehement. On August 20, 2025, the Nepalese Foreign Ministry issued a statement protesting the India-China decision, asserting that Lipulekh lies within Nepal's Darchula district. Kathmandu urged New Delhi and Beijing to refrain from any activities in the area without Nepal's consent, emphasizing that the region is part of its sovereign territory based on the 1816 Sugauli Treaty with British India.

Protests erupted in Kathmandu and border districts, with political parties like the Nepali Congress and Communist Party of Nepal uniting against what they termed an "encroachment." Demonstrators burned effigies of Indian and Chinese leaders, chanting slogans for territorial integrity. Social media in Nepal amplified the outrage, with hashtags like #LipulekhIsOurs trending. Analysts attribute this reaction to domestic politics, as Nepal's government faces pressure from nationalist groups amid economic challenges.

The dispute traces back to 2020 when India inaugurated an 80-km road linking Dharchula to Lipulekh for pilgrims and traders, prompting Nepal to release a new political map incorporating Lipulekh, Limpiyadhura, and Kalapani—areas India administers as part of Uttarakhand. Nepal's claim relies on historical maps showing the Kali River as the border, while India argues the river's origin is east of Lipulekh.

India's Rejection of Nepal's Claims

India's Ministry of External Affairs (MEA) responded firmly on August 20, 2025, rejecting Nepal's objections as "untenable" and reiterating that Lipulekh is Indian territory. Spokesperson Randhir Jaiswal stated, "Our position on the Lipulekh Pass is clear and consistent. The trade route with China dates back to 1954 and is based on historical facts and mutual agreements." India emphasized that the resumption is a bilateral matter between New Delhi and Beijing, not involving third parties.

This stance aligns with India's long-held view that the India-China border at Lipulekh is settled, while the tri-junction with Nepal requires trilateral dialogue. New Delhi has proposed boundary talks with Kathmandu, but progress has been slow due to political instability in Nepal. Indian officials also highlighted that the road and trade activities enhance connectivity for the Kailash Mansarovar Yatra, benefiting pilgrims from across South Asia, including Nepal.

Historical Context of the Lipulekh Dispute

Lipulekh Pass, at an altitude of 5,200 meters, is a strategic tri-junction in the Himalayas. Historically:

• Pre-Independence: The 1816 Sugauli Treaty defined Nepal's western border along the Kali River, but ambiguities over the river's source have fueled disputes.
  

• 1950s-1960s: India and China agreed on Lipulekh as a trade route in 1954, post the 1962 war, but Nepal did not formally object until later.
  

• 1990s-2010s: Trade flourished until halts due to weather and politics. India's 2015 agreement with China to use Lipulekh for trade drew mild Nepalese protests.
  

• 2020 Escalation: India's road inauguration led to Nepal's map revision and a constitutional amendment, straining bilateral ties. China has remained neutral but benefits from improved access to Indian markets.
  

The area is militarily sensitive, with Indian troops stationed nearby amid LAC tensions. Economically, it's vital for Uttarakhand's Pithoragarh district, where locals depend on trade for livelihoods.

Broader Implications

• Economic Benefits: Resumption could add $500 million annually to border trade, aiding post-pandemic recovery in Himalayan regions. It signals de-escalation in India-China relations, potentially leading to more investments.
  

• Geopolitical Tensions: Nepal's protests risk straining its ties with India, its largest trading partner. China's silence may indicate strategic caution, avoiding entanglement in India-Nepal disputes.
  

• Regional Stability: The issue underscores the need for trilateral talks. Experts suggest confidence-building measures like joint surveys or economic zones to resolve claims.
  

• Public Sentiment: In India, the move is viewed positively for economic gains; in Nepal, it fuels anti-India narratives, potentially affecting migrant workers and aid flows. Conclusion
  

  The resumption of India-China border trade through Lipulekh Pass marks a positive step in bilateral relations but has inadvertently revived the Nepal dispute, highlighting the fragility of Himalayan geopolitics. India's rejection of Nepal's claims underscores its firm stance on sovereignty, while protests in Kathmandu call for diplomatic resolution. As 2025 unfolds, sustained dialogue among the three nations could transform this tension into an opportunity for regional cooperation, benefiting economies and fostering peace.
  

  Copyright Disclaimer © 2025 FBP - Fantaasco BlogPost. All rights reserved. Powered by: The F Group sponsored by: fanbuluxe.in