Recent face-offs between Indian and Chinese troops at multiple locations along the Line of Actual Control in Arunachal Pradesh, confirmed by India's Indo-Tibetan Border Police chief in late October 2026 and ongoing since July, represent the primary driver of trader sentiment on the risk of a military clash. These incidents involve reported Chinese patrolling deviations and temporary encampments inside areas India views as its territory, echoing patterns from the 2020 Galwan confrontation while testing the fragile diplomatic thaw that included Xi Jinping's September BRICS summit visit to New Delhi, restored flights, and reopened border trade points. Both sides continue using established military commander meetings and diplomatic channels to manage disputes and avoid escalation, though opposition criticism in India and infrastructure activity on both sides of the undemarcated border sustain underlying risks. Upcoming bilateral talks on patrolling arrangements and LAC clarification could influence near-term probabilities.