This chapter elaborates the role of Tibet in the dynamics of the China–India territorial dispute since the late 1980s. Using the theory of territorial disputes as bargaining leverage (TDBL), the chapter draws attention to how China is linking its territorial dispute with the so-called Tibet issue to draw concessions on Tibet. Beijing has made this linkage to gain bargaining leverage over India and has used the territorial dispute to try to coerce New Delhi to make concessions on Tibet. As a result, Tibet plays three roles in the territorial dispute. First, it acts as an obstacle to resolution, as Beijing is unlikely to accept a complete settlement until India yields to its demands on Tibet, or the so-called “Tibet issue” is resolved. Second, both the increase in tensions around Tibet and India’s Tibet policy play a major role in Beijing’s decision to escalate the dispute to pressure Delhi. Third, Indian concessions on Tibet are a major factor in the progress made on the territorial dispute.