We always had minor tensions with China. The reasons for the increased tension is because China is trying to build a road to the Doklam spot, which belongs to Bhutan. You can read about it online. The spot is of strategic importance to us as well, as it is close to the Siliguri Corridor - a slim passage that connects the North-eastern part of India to the rest of our country.
Things have been hot for a while before that, because:
1) We refused to participate in China's ambitious OBOR (One Belt One Road) project. Our reasons are justified because this project makes China and Pakistan more powerful in our region, something which we cannot allow.
2) We conducted navy exercises with Japan and US in Malabar, which further annoyed China.
Anyways, I doubt whether we will go to war. We both are nuclear nations, but more importantly to China, the multi billion dollar trade with us cannot be jeopardised.
The current situation is basically a bit of grandstanding on their part. Someone is standing up to a bully, and China don't want to back off. We have offered dialogue but China has refused that.
As an Indian, my biggest worry is not China but the main opposition party in my country. When countries are threatened by foreign forces, all political parties unite, but in India, the main opposition party, Congress, which belongs to the powerful Gandhi(not Mahatma Gandhi) family secretly met with the Chinese envoy during the dispute, and repeatedly attempted to undermine the Indian government.