To be fair, this was a quibble among unarmed soldiers, literally fist-fighting on a bridge, in the middle of the night. I'm not sure if it counts for anything, and I don't think that on the whole, India's sovereignty is threatened.
The issue will be in areas wherein China can claim supremacy without much resistance, for example, off the coast of weaker neighbours in the region.
It's a pretty bold ploy - at the same time, I actually believe that the 'chip wars' will be more important!