A cautious but pragmatic turn in the India-China relationship is underway. After years of heightened tensions and military standoffs in the Himalayas, both nations are demonstrating signs of a mutual desire to de-escalate and normalise ties. It started with the October 2024 Border Patrol Agreement, which was a pivotal moment. It enabled troop disengagement and the establishment of buffer zones, effectively restoring a degree of stability on the contested Line of Actual Control (LAC). While a complete resolution remains elusive over the last seven decades, this move has paved the way for renewed high-level political dialogue post the 2020 standoff.
More importantly, in today’s volatile geopolitical realities, despite the strategic frictions, economic relations between the two countries are booming. Beijing has re-emerged as India’s largest trading partner in fiscal year 2024, yet a significant and widening trade deficit remains a key concern for New Delhi. Both nations recognise the need for economic stability, with China recently loosening export curbs on key items like urea to India.
However, this “thaw” isn’t happening in a vacuum; a shifting global landscape, particularly a new wave of protectionism from the U.S. under the Trump Administration, appears to be a factor encouraging both India and China to find common ground. Their shared interest for regional stability is perhaps pushing them towards a rapprochement, even as they remain strategic competitors.
Diplomatic Momentum: A Phased Engagement
Recent diplomatic activity in New Delhi, vis-à-vis Beijing, highlights a significant and coordinated shift in how China & India are approaching their relationship. It is worth highlighting that the objectives of both nations in achieving a degree of peaceful coexistence may be at variance. While China would want to leverage the relatively adverse stance of the US against India and bring India back within its sphere of influence, for New Delhi, Beijing sybmolises a nation on which it has critical trade dependencies both for its consumers and exporters. Additionally, the recent faceoff with Pakistan would have forced the China hawks in South Block to sober up and reassess India’s strategic priorities.
A Tiered Approach
The meetings of NSA Ajit Doval with Wang Yi, served as a critical component in this diplomatic reconfiguration. It was the highest-level in-person exchange since the standoff, and Doval’s public statement that the “borders have been quiet” was a crucial signal. His role was to test the waters and formally acknowledge the de-escalation on the ground, hence setting precedence for further higher-level dialogue.
The diplomatic engagement also saw EAM Jaishankar shaking hands with President Xi which was reciprocated with Wang Yi’s meeting with Prime Minister Modi. This was a clear indication that both sides are serious about moving past the stalemate. Both nations sense an opportunity to address their national interests through tactical cooperation as the West remains embroiled in a state of confusion.
These meetings reveal a deliberate and serious effort to restore relative normalcy. The message seems clear; while competition and strategic differences shall persist, both nations are committed to ensuring that they are managed through structured, high-level dialogue rather than military confrontation.
India’s Asks vs The Practical Reality
What could India ideally seek from this thaw, and what can it realistically achieve, given China’s opportunistic approach? India’s top priority shall remain a permanent and clearly demarcated border settlement to put an end to recurrent tensions. New Delhi shall also seek to close the massive trade deficit by increasing its exports to Beijing and gaining better market access. While India would prefer that China eases its “string of pearls” strategy, which involves developing ports and infrastructure in neighboring countries like Pakistan, Sri Lanka and Myanmar, it would settle for a shared hegemonic relation with China when it comes to South Asia as seen in the early decades of independence.
While India may have such legitimate aspirations, the realistic outcome of the recent reproachment may be a little more sobering. A full border settlement shall remain an enigma as it has been since the McMohan Line was drawn. New Delhi will likely have to be content with continued de-escalation and the management of friction points. On the economic front, while dialogue on trade may continue, China, as an opportunistic player, is unlikely to sacrifice its economic superiority for understandable reasons. While India might achieve some minor gains, such as selective market access for specific products, the overall trade deficit is likely to persist unless Indian manufacturers create significant competitive advantages for themselves through cutting-edge innovation. Finally, like all nation-states, China’s foreign policy is driven by its own strategic goals. It is unlikely to halt its activities in the Indian Ocean Region (IOR). India’s best bet would be to ensure that it is able to offer value to its neighbours while enhancing its influence over the Sea Lines of Communication in the IOR.
The path ahead is complex, balancing economic necessities with competitive interests. The goal is to ensure differences do not escalate into disputes, and competition does not devolve into conflict, while ensuring long-term strategic interests are not abandoned. It’s a delicate dance, and the world is watching.
The writer is Former Director General of Police, HoPF, Assam and General Secretary, Society to Harmosinse Aspirations for Responsible Engagement (SHARE)