Capital area between India and China to the north (5)
I believe the answer is:
dubai
'capital' is the definition.
(capital of the Emirate of Dubai)
'area between india and china to the north' is the wordplay.
'area between' becomes 'a' (I am not sure about this - if you are sure you should believe this answer much more).
'india' becomes 'i' (phonetic alphabet: alpha, bravo, charlie etc.).
'and' says to put letters next to each other.
'china' becomes 'bud' (china plate is Cockney rhyming slang for mate).
'to the north' is a reversal indicator (in a down clue, letters go up or 'northward').
'bud' written backwards gives 'dub'.
'a'+'i'='ai'
'ai' put after 'dub' is 'DUBAI'.
(Other definitions for dubai that I've seen before include "One of the United Arab Emirates" , "Gulf sheikhdom" , "Gulf territory" , "Gulf city/state" , "Persian Gulf emirate" .)