Borders between the two nations have not been demarcated on maps or delineated on the ground after the border war of 1962 which India lost. New Delhi claims some 38,000 sq km of territory in Chinese-held Aksai Chin in the north-eastern corner of Jammu and Kashmir as well as 5,180 sq km of land in Kashmir ceded to China by Pakistan in 1963. For its part, China lays claim to around 90,000 sq km of territory in India's northeast, roughly approximating the India state of Arunachal Pradesh. China refers to it as "southern Tibet".

In mid-June both sides said that their territorial dispute was resolved but in the first six months of the year China has carried out over 65 incursions into the Indian state of Sikkim.

Sikkim itself is not at stake but many believe that China is putting pressure on India here in order to get Arunachal Pradesh, especially Tawang.

Nestled in the eastern Himalayas at an altitude of 3,400 meters, Tawang is a critical corridor between Lhasa and the Brahmaputra Valley. It would give China the means to control the entire area.

There is also Tawang's link with Tibetan Buddhism and its religious and emotional significance for Tibetans. It is home to the second most important Tibetan monastery after the Potala Palace in Lhasa, a virtual treasure trove of Tibetan Buddhist religion and culture compared to the cultural genocide currently underway in Tibet. The area is also fertile and rich in minerals

Scholars have argued that Tawang is central to Beijing's control over Tibet and would buttress Beijing’s religious and cultural legitimacy claim that Tibet is an integral part of China. And China's occupation of Aksai Chin has consolidated its military control over Tibet by securing an all-weather, year-round overland access to Tibet.

For this same reason Tibetans and the Dalai Lama insist that Tawang and Arunachal Pradesh are part of India, whilst China wants to annex it to the rest of Tibet as “Chinese territory”.

However New Delhi cannot afford to give in and surrender millions of people who have always been Indian. Thus it is investing billions of dollars into improving communication and transportation links with the rest of the country, reinforcing its military presence in the area, reopening the Daulat Beg Oldi airfield in Ladakh in Jammu and Kashmir at 4,960 meters, ideal for dropping or picking up troops and supplies, located a mere eight kilometres from the Sino-Indian Line of Actual Control, and more importantly overlooking the strategic Karakoram Highway that links China and Pakistan.

China can be expected to be quiet before the Games, but one cannot exclude that it might up the ante after they are over, warned Shantonu Choudhry, a former vice chief of army staff, especially “if India's political center is perceived as weak and pusillanimous.”