Despite the distraction posed by the South China Sea episode, India and China are well on course to putting in place a major confidence building measure on the border issue — a new mechanism to handle perception of incursions on certain pockets of the Line of Actual Control (LAC) — by year-end.

In recent exchanges, the two countries have broadened their contacts to cover energy and water at the first-ever economic dialogue and are expected to announce plans for greater military interaction early next year. The next round of boundary talks is also likely to be held soon.

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