India-China Border Trade Via Lipulekh Pass To Resume After 6 Years: Why It Matters Explained

Last Updated:March 20, 2026, 13:34 IST

India-China border trade via Lipulekh pass after 6 years marks a thaw in ties: Why does Lipulekh matter and what is Nepal's objection, News18 explains

After a six-year hiatus, the India-China border trade via the Lipulekh Pass is scheduled to resume in June 2026. This decision, reached during diplomatic talks in August 2025, marks a significant “thaw" in relations following the disruptions caused by the COVID-19 pandemic and the 2020 military standoff in Eastern Ladakh.

News18 explains the timeline and why the move matters.

WHAT’s THE PLAN?

The decision to reopen Lipulekh and two other Himalayan passes — Shipki La in Himachal Pradesh and Nathu La in Sikkim — was reached during high-level diplomatic talks between Indian National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi in August 2025.

The trading season is scheduled to run from June to September, though this may be extended depending on weather conditions. For the first time, traders will benefit from a motorable road to Lipulekh, completed in 2020. This replaces the traditional use of mules and sheep, significantly reducing travel time and costs.

Local authorities have designated Gunji as the primary trade mart and Dharchula as a base camp for administrative formalities.

Offices for the State Bank of India (SBI), Customs, and police are being set up at Gunji to facilitate transactions and security. The trade primarily involves tribal communities (such as the Bhotiyas) who export local handicrafts and import items like Tibetan wool.

WHERE IS LIPULEKH PASS?

Lipulekh Pass is a high-altitude Himalayan mountain pass located in the Pithoragarh district of Uttarakhand, India.

It is situated in the Kumaon region of the Himalayas. The pass stands at an elevation of approximately 5,334 metres (17,500 feet).

It serves as a strategic tri-junction point connecting India (Uttarakhand), China (Tibet Autonomous Region), and Nepal. The pass is near the Tibetan trading town of Taklakot (Purang) and is accessible from the Indian side via the town of Dharchula.

Strategic and Cultural Context

Kailash Mansarovar Yatra: It is one of the most prominent traditional routes for Indian pilgrims traveling to Mount Kailash and Lake Mansarovar in Tibet.

Territorial Status: While under Indian administrative control, the southern side of the pass (the Kalapani territory) is claimed by Nepal as part of its Darchula district.

Trade: It was the first Indian border post opened for trade with China in 1992.

TIMELINE OF LIPULEKH TRADE

1954: Formal border trade between India and China commences through the pass.

1962: Trade is suspended following the Sino-Indian War.

1991-1992: An agreement to reopen the pass is signed, making Lipulekh the first official border post for trade with China in 1992.

2015: A bilateral agreement to expand trade through Lipulekh is signed during Prime Minister Narendra Modi’s visit to Beijing, sparking official protests from Nepal.

2020: Trade and the Kailash Mansarovar Yatra are suspended due to the pandemic and rising border tensions.

August 2025: India and China agree to reopen three Himalayan passes — Lipulekh, Shipki La, and Nathu La — following a visit by Chinese Foreign Minister Wang Yi.

June 2026: The target date for the full resumption of the traditional trade season (June–September), according to the Ministry of External Affairs (MEA).

THE ‘NEPAL FACTOR’ AND TERRITORIAL DISPUTE

Nepal maintains a “strong objection" to India-China trade via Lipulekh, asserting the territory is its own based on the 1816 Treaty of Sugauli.

The conflict hinges on the origin of the Kali River. Nepal claims it starts at Limpiyadhura (putting Lipulekh in Nepal), while India maintains it originates from springs near Kalapani village.

In 2020, Nepal updated its official map and constitution to include the Kalapani-Lipulekh-Limpiyadhura region, a move India dismissed as an “unjustified cartographic assertion".

While India continues to exercise administrative control and proceed with trade plans, it has expressed openness to resolving boundary issues with Nepal through “dialogue and diplomacy".

WHY IT MATTERS

India completed an 80 km road from Dharchula to Lipulekh in 2020, drastically reducing travel time for pilgrims and improving logistical access to the Line of Actual Control (LAC).

Historically, India exports items like jaggery, spices, and tobacco, while importing sheep wool, goats, and raw silk from Tibet.

The pass is a vital route for the Kailash Mansarovar Yatra, and its reopening is expected to revive the social and cultural life of local border communities, according to reports.

KEY FAQs

Why was trade stopped?

Due to border tensions and security concerns after the 2020 clashes.

Why reopen now?

To resume economic activity and signal cautious normalization.

Does this solve territorial disputes?

No, this is only for trade; the border issues remain unresolved.

With agency inputs

News explainers India-China Border Trade Via Lipulekh Pass To Resume After 6 Years: Why It Matters Explained

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