Dealing with China: Why trade and Kailash Yatra should be India’s opening move before LAC settlement
A simpler first step for an India-China reset could be to reopen the frontiers as they were in the 1950s, particularly for trade and the Kailash-Manasarovar pilgrimage, following the centuries-old tradition
Rumours have been circulating that Delhi and Beijing would like to settle their Line of Actual Control (LAC); however, it is easier said than done. First, there exist several ‘agreements’ between India and China mentioning the LAC without ever defining it or demarcating it on a map. Thus, what will happen to these agreements is an issue which will need to be decided upon in the first step.
To settle the LAC also means to iron out different perceptions (on a map or on the ground) and see how to reconcile the contesting claims.
For example, in Ladakh, it is said that there are twelve spots where the perception of the two Asian giants differs. The task is not an easy one, especially since the Chinese ‘perceptions’ have never been shown on a map for the Eastern Sector, which includes Sikkim and Arunachal Pradesh.
As for the Northern sector, maps were exchanged for 20 minutes in 2002 and then withdrawn by the two parties. Among other issues, China objected to the inclusion of Gilgit Baltistan on Indian maps.
A first easier step could be to simply reopen the border/LAC as it was in the 1950s, particularly for trade and pilgrimage to the Kailash-Manasarovar, as it existed for centuries.
Reopening Shipki-la
China has recently agreed to reopen the Shipki-la route in June 2026; the Himachal Government sees it as a boost for trade and tourism. The trade route was closed in the wake of the Covid19 restrictions in 2020. As part of reset in ties between India-China after leadership-levels talks in 2024, both countries have agreed to reopen trade on other routes also including Lipulekh in Uttarakhand, and Nathu-la in Sikkim.
But reopening passes is not enough.
Fascinating Reports
During the course of my research on the Indo-Tibet relations, one of the most fascinating archival discoveries was the reports of the Indian Trade Agents (ITA), particularly those posted in Gartok, Western Tibet.
Following the Younghusband expedition to Tibet in 1904 and the signature of the Lhasa Convention in July of the same year, three Indian trade marts were to be opened on the Roof of the World: in Yatung, near Sikkim in Chumbi Valley; in Gyantse, south of Lhasa; and, more importantly, in Gartok, Western Tibet.
For centuries, trade flourished between Northern India and Tibet. Even after the arrival of the Chinese in 1951-52, business continued for almost a decade.
According to the ITA in Gyantse, the year 1952-53 “saw unprecedented large demands for various goods from India for consumption of [the] Tibetans and the large number of Chinese troops in Tibet”.
During the first years of the Chinese occupation, most of the commodities were coming from India; consequently, the volume of the trade increased for a couple of years. The Himalayan passes continued to see endless caravans travelling north to the plateau.
Ironically, the Chinese had to import rice for Tibet through the Indian ‘back door’. “[They] would have very much liked to do the same in regard to tinned foodstuffs, clothing, equipment and other supplies if they had a free hand,” commented the ITA.
Between 1951 and 1954, the cheapest and easiest way for the Liberation (or ‘Occupation’) Army was to get supplies from India.
The Decline of the Trade
The trade, the livelihood of the Himalayan populations, started to decline once the Dalai Lama fled from his native land in 1959, and it entirely stopped in 1962.
In his report dated November 20, 1960, addressed to the political officer in Sikkim, AK Bakshi, who served as the Indian trade agent in Gartok, described the situation in Western Tibet during the 1960 trading season.
The tour took place more than a year after the uprising in Lhasa and the subsequent flight of the Dalai Lama to India. Bakshi soon discovered that all was not rosy in Western Tibet; the border trade was not doing well. “Due to uncertain trade prospects during 1960 season, Indian traders particularly from Himachal Pradesh, Punjab and Ladakh did not visit Western Tibet in usual numbers. Even UP traders went up very late and carried comparatively less stock of goods.”
The events of 1959 in Central Tibet and the Chinese tightening the conditions for trade affected the business between India and Tibet.
The trade agent explained that “previously the Chinese and their Tibetan employees used to make lot of purchases from Indian shops, but now all their requirements were being met by the Chinese shops, where they have introduced a coupon system. Possibly under instructions, these people now avoid visiting Indian shops”.
He further noted that there were three main traditional items of export from Western Tibet: wool, salt and borax, which were gradually taken over by the Chinese; for the Indian traders, the first and foremost tradable item was the wool, which had been “practically monopolised by the Chinese, who have raised its price to Rs.135 per maund. The Chinese have also started exporting wool to the mainland (Sinkiang) from this year”. The Chinese were clearly not keen to keep the old relations alive.
The ITA’s conclusions were not very optimistic: “The trade prospects do not look very bright.”
To aggravate the situation, constant attempts were made through Chinese middlemen “to raise the prices of Tibetan products and to lower those of Indian goods by denying direct barter dealings between our traders and the Dokpas, who are poisoned to believe that our traders had been exploiting them for centuries.”
The entire exercise seemed to be to squeeze out the Indian traders from Tibet, slowly but surely; Bakshi believed that as soon as the Chinese would be able to achieve food self-sufficiency, they would open their own woollen mills.
The Fate of the Kailash Pilgrimage
According to the ITA report, “due to disturbed conditions in Western Tibet,” after the uprising of March 1959, the Chinese advised the Indian pilgrims to desist from visiting the Kailash and Manasarovar region. As a result, only 25 pilgrims visited Kailash and Manasarovar in 1960; the main party of 13 pilgrims, led by Swami Vidyananda of Nainital, entered Western Tibet via Unta Dhura pass and returned to Garbyang via Lipulekh pass on August 22.”
Though the pilgrims did not encounter any difficulty “as they did not have to depend on the local authorities for any facilities like transport,” the problem in the resthouses “remains as acute as before”. On his return journey, the ITA stayed in the only resthouse available, near the Rakshastal lake in the Kailash area; he found it “unfit for human habitation and looked worse than a stable”. Bakshi said that he understood from the pilgrims that “there was a restriction on taking radios and newspapers and that the Chinese did not favour the idea of Kailash Parikrama for security reasons.”
When the ITA mentioned these difficulties to the Foreign Bureau at Gartok, “our pilgrims had not been able to visit Holy Kailash and Manasarovar for the last two years in view of the Chinese advice regarding disturbed conditions in Western Tibet,” Bakshi was assured that when the situation in Ngari would become normal, the pilgrims could resume their visit to the holy places. It never happened.
What can be done?
Shipki-la in Himachal Pradesh and Lipulekh in Uttarakhand were partially reopened in the 1990s, and Nathu-la in 2006, but closed again due to Covid-19 in 2020.
A Confidence Building Measure (CBM) and win-win option for Beijing and Delhi could be to reopen trade and pilgrimage as in the past.
Further, spiritual corridors through Demchok, Shipki-la, Niti-la or Mana-la should be opened for the Kailash pilgrimage. Let lakhs of Indian yatris visit the holy places in Tibet; China will not mind the good revenue accrued from it.
After all, the Kartarpur corridor between India and Pakistan was opened as a mutual gesture of goodwill, despite the tough reality and difficulties between both countries. Both governments agreed to the development of a corridor to enable the smooth passage of pilgrims seeking to visit Guru Nanak’s final resting place.
These are certainly fields to explore for the northern border, as trade and pilgrimage always played an important role in India’s relationship with Tibet; it could indeed provide a bridge between both sides of the Himalaya and in the future become a major CBM between China and India; a solution for the LAC could come next.
This article was originally published as Claude Arpi. 2026. ‘Dealing with China: Why trade and Kailash Yatra should be India’s opening move before LAC settlement’. Firstpost. 13 February.