India and China’s progress in ironing out long-standing border tensions has sparked hopes of a revival in trade ties that could open up Chinese investments in sectors such as electric vehicles (EV) and consumer electronics.

Earlier this month, India Foreign Minister Subrahmanyam Jaishankar noted that there was “some progress” in disengagement of troops from both sides of their border, saying it was a “welcome move” which “opens up the possibility that other steps could happen”.

Ties between India and China hit one of their lowest points following a clash between troops along the disputed Himalayan border in 2020, and relations have only begun to warm with the withdrawal of soldiers on either side of the border.

That followed an earlier agreement in October on patrolling arrangements on the border between the two countries.

India had increased scrutiny for visa applications from Chinese citizens in the wake of the border clashes, which hurt some of India’s key manufacturing firms as stricter visa rules meant specialised engineers from China could not enter the country, leading to production losses.

The two countries have not had any direct flights for four years, but there are signs that these could again resume following the easing of border tensions. India’s aviation minister said in September that both sides had discussed an early resumption of scheduled passenger flights.

“We are hoping that there will be more Chinese investments, joint ventures as well as technology transfers,” said Vinod Sharma, chairman of the Confederation of Indian Industry’s National ICTE (Electronics hardware) Committee. “Secondly, we are hoping that China will allow exports from India of manufactured goods.”

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