Described by the Indian government as a "significant change of status quo with serious security implications for India
," the controversial road runs through the disputed Doklam Plateau, on the unmarked border between China and Bhutan.
Though not a part of Indian territory, the plateau holds immense strategic importance for Delhi and is vital to its geopolitical interests.
"The area in contention is extremely close to a very vulnerable stretch of Indian territory that effectively connects the bulk of India to its northeastern states," Shashank Joshi, senior research fellow at the Royal United Services Institute (RUSI) in London told CNN.
"Additional construction could skew the local balance of power in China's favor, essentially leaving India more vulnerable to invasion in case of a military confrontation with Beijing."
Objections were first raised by the Bhutanese government, which issued a demarche, or formal statement, accusing China of constructing a road "inside Bhutanese territory" in "direct violation
" of its territorial treaty obligations, earlier last week.
India and Bhutan have maintained historically strong relations. Bhutan co-operates closely with India in determining its foreign policy, and the Indian Army is involved in the training of its armed forces.
China, which does not have formal diplomatic ties with Bhutan, has denied that it has violated any treaties.
"Doklam has been a part of China since ancient times. It does not belong to Bhutan, still less India," said Chinese Foreign Ministry spokesperson Lu Kang on Wednesday
"China's construction of road in Doklam is an act of sovereignty on its own territory. It is completely justified and lawful, and others have no right to interfere."
Lu added that it was "utterly unjustifiable" for the Indian side to interfere in issues between the two countries.
The Doklam dispute is the latest in a long-running series of territorial flare-ups between India and China. In 1962, the two countries engaged in a bloody border war, and skirmishes have continued to break out sporadically in the decades since.
India has not denied its troops were present in the area. According to a statement released by the Indian Ministry of Foreign Affairs
, Indian personnel "approached the Chinese construction party and urged them to desist from changing the status quo."
In response, China blocked religious pilgrims from India from visiting the Manasarovar shrine, accessible only via the Himalayan Nathu La
that runs alongside the border between the two nations, "out of security concerns
The moves come at a time of steadily deteriorating ties between the two countries, say analysts, who point to Chinese investment in Pakistan-administered Kashmir, and Chinese frustration with India's unwillingness to join its One Belt One Road
development initiative as points of contention.
Council on Foreign Relations senior fellow Ely Ratner told CNN the current dispute was an indication of the challenges China faces as a global leader.
"It goes to show how hard it's going to be for China to lead the region when core elements of its foreign policies are so ideological, uncompromising, and irreconcilable with its neighbors and other major powers."