Since the 1990s, the Government of India has undertaken several policy initiatives to facilitate cross-border flows. Such initiatives can be read as an effort to transform ‘battlefields into marketplaces’. This paper examines the rise of the border town of Champhai, located on the India-Myanmar border in the state of Mizoram in Northeast India. The formation of a new urban centre in a frontier region based on border trade reveals different dimensions of transition in Northeast India’s borderlands. The paper explores two key themes: how border trade, comprised of legal and illegal flows, has transformed Champhai into Mizoram’s third-largest city, and how increasing trade across the border reorients the interethnic dynamics with strong implications for ethnic and citizenship politics in Mizoram. The paper concludes by highlighting the different aspects discussed in the article that would determine the borderland dynamics in Mizoram.