Eurasia Group also predicts a 25% chance of successful diplomatic negotiations leading to a de-escalation and a 15% probability for a deeper military conflict at the border.
Many political experts argue that neither side is likely to give an inch of perceived territory given the current state of bilateral ties.
Politically, India's Prime Minister Narendra Modi cannot retreat as he had been under criticism for failing to acknowledge Chinese incursions into Indian territory, according to the analysts.
They added that any further loss of territory for India would hurt Modi's "image as a strongman who will protect India".
China's President Xi Jinping will not back down either and "the signs are pointing towards this border remaining hot and standoffs continuing as both sides are preparing for a long, entrenched conflict.
"This is not to say diplomacy will not continue. Commander-level talks are likely to continue, as will diplomatic meetings," they added.
Chinese experts are skeptical
The actual addressing of future border tensions remains unclear as India has a long history of breaking its promises, Hu Zhiyong, a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences, told media on Friday.
"We should not only observe what India says, but also what it does. For a country like India, the most important thing is how it acts," Hu said.
In 2005, then-Chinese Premier Wen Jiabao held important talks with Indian Prime Minister Manmohan Singh before signing a joint statement by the two governments, in which both sides declared the establishment of a strategic partnership to promote peace and prosperity. The two governments also signed the Agreement on the Political Guiding Principles for Resolving the Boundary Issue between China and India, in which they pledged to reduce armed forces and maintain peace.
"However, since Modi assumed power, the Indian government has totally neglected this joint statement. China has kept its word, but the Indian side has provoked the recent border clashes," Hu said, stressing that this time China remains on high alert.
Given the country's sluggish economy and poor epidemic control, the Modi government will continue to try and stir up border tensions in an attempt to deflect the public's attention. Sadly, these border tensions are used as chips to fool the public, he noted.
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