The Indian Army has approved the opening of a new trading point with China at Dumchelle in Ladakh, the third such along India’s disputed, albeit peaceful 3,488-km border with China in a confidence building measure ahead of Chinese President Xi Jinping’s October visit.
Although the Indian Army’s spokesperson did not respond to queries, three officials familiar with the matter said on condition of anonymity that the army has cleared the opening of the post, and that it is up to the government now.
The Trading post could open as soon as the end of the year and that work has already started on the customs check point and the road to it. The only thing left is for the Cabinet Committee on Security to sign off.
Dumchelle is in Southern Ladakh, and is strategically located between Chushul , one of the five designated Border Personnel Meeting (BPM) meeting points between the Indian and Chinese armies, and Demchok in Southern Ladakh.
The two other recognised trading points with China are Lipulekh in Uttrakhand and Nathu La in Sikkim. Predetermined, locally made items are traded through these points with an aim of boosting the local economy.
President Xi is scheduled to be in India in October for an informal summit with Prime Minister Narendra Modi. Opening up another trading point along the disputed Line of Actual Control (LAC) would be a major confidence building measure, analysts said.
Although the Dumchelle trading point will be new, trade at the border town between residents of Ladakh and the Tibetans from the other side has a long history. Goods are bought and sold at Dumchelle regularly. In addition, there is a three-week-long fair at Dumchelle where locals from both sides participate.
In the past, the Chinese People’s Liberation Army (PLA) has even used the hotline, which connects military commanders on both sides of the border and which is used to sort out minor issues, to discuss dates of the fair. “It is an informal arrangement between the two sides,” a senior serving Indian Army officer said.
“It is a traditional trade route. In the past, the army has written to the government advising it to either completely stop the trade or formalise the exchange,” a government official added.
The current trade through Dumchelle is informal and designating it a trading point will automatically lead to “supervision of the goods flowing through this area. Also, there could be revenue implications for the government,” this person said. “Ladakh is flooded with Chinese made goods, much of which is traded through this particular point.”
India-China ties which hit a low during the 73-day long stand-off between the armies of the two countries in the Doklam plateau in Sikkim in 2017 warmed after the historic informal summit at Wuhan between Prime Minister Modi and President Xi in April 2018. Both leaders agreed to give “strategic” guidance to the respective militaries to reduce border tensions.
Nonetheless, caution on either side is understandable. The LAC is not demarcated. To address this, the two countries have agreed to elaborate mechanism that includes banner drills and communication between local commanders through established “hotlines” to ensure minor issues do not escalate into major ones.
