In an apparent effort to placate China, India has not given foreign journalists the necessary permits required to travel to Tawang, for the Dalai Lama's visit on Sunday.
Tawang town in the Himalayan foothills spruced up its monasteries to prepare for the Dalai Lama's arrival on Sunday, which China had protested.
While a repeat of the 1962 border war between the two countries seems unlikely, the quarrel has underscored tensions, some stemming from India's swift economic growth and the increasing challenge it poses to Chinese dominance of the region.
"At the heart of all this anger, you see the subtext of India, this upstart, trying to compete with China," said Brahma Chellaney, an analyst at the Center for Policy Research in New Delhi. The people of Tawang excitedly prepared Friday for the Dalai Lama's arrival - his first visit here since 2003.
Buddhist monks hung flags and banners with the Dalai Lama's image, and decorative arches were erected across the town. A tent camp was set up for an expected influx of pilgrims to this town in the northeastern state of Arunachal Pradesh.
"This is a religious event for us. It is specially auspicious to have the Dalai Lama in our midst," said Tulku Rinpoche, the head of the sprawling Tawang monastery.
But the trip infuriated China, which controls Tibet and expressed grave concerns to India.
"We believe that this once again exposes the nature of the Dalai Lama as anti-China," Chinese Foreign Ministry spokesman Ma Zhaoxu said.
China's anger stems in part from a dispute over Arunachel Pradesh that stretches back nearly a century. China claims the region and has disavowed the so-called McMahon Line, a border drawn by India's British colonial rulers in 1914 that gave Arunachal to India. China also occupies a part of Kashmir claimed by India. Despite 13 recent rounds of talks on the border dispute, no agreement has been reached.
China regularly protests the movements of the Dalai Lama - the 14th incarnation of the Tibetan Buddhist spiritual leader _ who has lived in India since he fled Chinese-controlled Tibet 50 years ago. But his visit to Tawang is especially galling to China. Tawang is heavily linked to nearby Tibet and has one of the largest Tibetan Buddhist monasteries in the world. China briefly occupied Tawang during the 1962 war before pulling back to the informal border.
The sixth Dalai Lama was born in Tawang in the 17th century and China fears the current Dalai Lama might announce that his successor could come from this town or somewhere else outside Tibet - meaning outside of Chinese control. China expects to exercise a strong hand in choosing the next Dalai Lama and is increasingly sensitive about the region since deadly anti-government riots broke out in the Tibetan capital of Lhasa last year.
Chinese troops violated the border 270 times last year and demolished some unmanned Indian forward posts, said Chellaney of the policy research center.
Former Indian Foreign Secretary Lalit Mansingh said both sides regularly cross the long, unmarked boundary in an orchestrated effort to show sovereignty over the other side. Chinese troops leave their empty cigarette packs and beer cans on the Indian side; Indian troops clean them up and dump their own trash on the Chinese side. "It's a lot of shadowboxing," he said.
India recently added thousands of troops to the region to counter the better roads and infrastructure on the other side of the border that would let Beijing rapidly send reinforcements, said Adm. Sureesh Mehta, recently retired chief of India's navy. "They felt that was a capability gap that needed to be plugged," he said.
China also tried to block parts of an Asian Development Bank loan to India because it included projects earmarked for Arunachal. China, meanwhile, has accused India of making it more difficult for Chinese laborers to get work visas to India.
Despite the confrontation, the two countries have strengthened ties in other areas. They recently announced an alliance on the upcoming round of climate change talks in Copenhagen and their annual trade has skyrocketed to $52 billion last year. Their leadership plays down the tensions.
"Our relationship is on very good terms," China's ambassador to India, Zhang Yang, said last month.
Mansingh, India's former foreign secretary, said New Delhi's growing strength would inevitably lead to even greater competition between the two countries over economic resources and primacy in the region but that their trade links and China's focus on economic growth make an eruption of violence extremely unlikely. "A military confrontation doesn't make any sense in the 21st century," he said.