Context

• As India and China commemorate 75 years of diplomatic relations, the occasion marks more than a ceremonial milestone; it represents a pivotal inflection point in both Asian and global geopolitics.
• The bilateral relationship, once nurtured by idealistic visions of pan-Asian solidarity, has evolved into a strategic balancing act shaped by contested borders, economic interdependence, and geopolitical rivalry.
• Yet, despite the deep mistrust, the India-China equation remains layered with opportunities for cooperation, demanding a nuanced and forward-looking policy framework.

Indian Foreign Policy Challenges with Respect to China

• The China Lens: A Structural Challenge
  • China has emerged as the most consequential external factor shaping Indian foreign policy.
  • Nearly every strategic decision, ranging from border security to trade diversification, is influenced by what is termed the China lens.
  • This relationship is defined by a duality: the need to deter aggression while preserving diplomatic channels; safeguarding sovereignty while acknowledging economic entanglements; and navigating competition while maintaining coexistence.
  • The legacy of the 1962 war, compounded by the deadly 2020 Galwan Valley clash, has left deep scars and recalibrated India’s China policy.
  • Today, the Line of Actual Control (LAC) remains tense and heavily militarised, with more than 60,000 troops stationed in Eastern Ladakh.
  • Infrastructure buildup on both sides reflects a long-term military posture, underscoring that engagement cannot obscure the reality of persistent strategic divergence.
• Economic Paradox: Deterrence Meets Dependence
  • Even amid geopolitical strain, economic interdependence continues.
  • China remains one of India’s largest trading partners, with a trade imbalance nearing $100 billion in 2024–25.
  • While India has implemented measures such as banning Chinese apps and curtailing certain investments, it remains reliant on Chinese components, particularly in critical sectors like pharmaceuticals and electronics.
  • This paradox, military deterrence coupled with marketplace dependence—renders full economic decoupling unrealistic in the short term.
  • Consequently, India’s evolving strategy is best described as one of “competitive coexistence.”
  • India competes with China in regional infrastructure, defence, and influence, while maintaining diplomatic engagements through platforms like BRICS and the Shanghai Cooperation Organisation (SCO).
  • Simultaneously, India collaborates with democracies in the Quad to uphold a free and open Indo-Pacific.
  • The challenge lies in maintaining strategic agency while managing adversarial flashpoints.

Regional Influence, the Battle of Narratives, and the US Factor

• Regional Influence and the Battle of Narratives
  • Nowhere is the India-China competition more evident than in South Asia.
  • China’s expanding influence, manifested in projects like the Hambantota Port in Sri Lanka, the Pokhara Airport in Nepal, and infrastructure investments in the Maldives, has challenged India’s traditional dominance.
  • In response, India has ramped up development aid, defence partnerships, and crisis response mechanisms.
  • However, reactive diplomacy must now give way to proactive, long-term strategies aimed at winning hearts and establishing lasting regional leadership.
  • Diplomatic nuances, such as recent remarks by Bangladesh’s interim leader about India’s northeast being landlocked, underscore the power of narratives.
  • Though geographically accurate, such statements, especially made in Beijing, reinforce China’s strategic framing.
  • India must close infrastructure gaps and shape regional discourse through trust-building and connectivity.
• The U.S. Factor and Strategic Autonomy
  • Complicating India’s China calculus is the return of Donald Trump to the U.S. presidency.
  • His renewed unilateralism and intensified U.S.-China rivalry may pressure India to align more closely with Washington, particularly in defence and Indo-Pacific matters.
  • However, India must balance this partnership with the principle of strategic autonomy.
  • Prime Minister Narendra Modi’s remarks on the Lex Fridman podcast in March 2025 highlighted a recalibrated narrative.
  • By referencing historical India-China synergy and advocating for healthy competition, Modi conveyed multiple signals: openness to dialogue with China, independence from U.S. pressure, and assurance of stability to domestic audiences.

A Tentative Thaw: Symbolism and Substantive Signals

• China’s positive response to Modi’s overtures, resuming verification patrols along the LAC, reopening dialogues on hydrological data-sharing, and restarting discussions on religious tourism, indicates a cautious willingness for rapprochement.
• These symbolic gestures may not resolve underlying tensions, but they suggest a mutual interest in de-escalation, or what might be termed a thaw without illusions.
• Nonetheless, core challenges persist. China’s proposed dam on the Yarlung Tsangpo near Arunachal Pradesh has reignited fears of water weaponisation.
• With no water-sharing treaty in place and limited transparency, the potential for ecological and strategic mismanagement looms large.

The Way Forward

• Towards a Coherent China Policy
  • Military Readiness – Ensuring deterrence along contested borders without provoking escalation.
  • Economic Diversification – Reducing critical dependencies while maintaining trade where beneficial.
  • Diplomatic Engagement – Sustaining dialogue through multilateral platforms and bilateral mechanisms.
  • Narrative Control – Shaping regional and global perceptions through strategic communication.
  • This approach requires institutional agility, faster implementation of regional projects, and a mindset geared towards long-term strategic planning.
  • As Foreign Secretary Vikram Misri has articulated, the path forward must be guided by the “three mutuals”—mutual respect, sensitivity, and interest.
• A Moment for Strategy, Not Sentiment
  • As India and China mark 75 years of bilateral ties, nostalgia must give way to strategic clarity.
  • China will remain a structural challenge, but it also functions as a mirror, reflecting India’s aspirations, capabilities, and constraints.
  • India’s objective must be to carve out an autonomous, influential role in a world defined by flux and rivalry.

Conclusion

• In managing its relationship with China, India must not see itself hemmed in by competition but empowered by it.
• The framework of ‘competitive coexistence’ offers a realistic and responsible roadmap, one that acknowledges rivalry while working to prevent friction from igniting conflict.
• In that delicate balance lies the opportunity for India to lead, not just react, in a reshaped global order.