 "India-China thaw: Are the Dragon and Elephant set to tango again?")
As Prime Minister Narendra Modi gears up to visit China, Chinese Foreign Minister Wang Yi is in New Delhi between August 18 and 19. Are the two “Asian Giants” actively working to mend their strained bilateral relations, signalling a push towards normalising ties and fostering greater stability between the two?
A series of high-level bilateral engagements have been unfolding. Rebuilding bilateral relations which came under a major strain following the Galwan Valley clashes in June 2020.
PM Modi is scheduled to attend the Shanghai Cooperation Organisation (SCO) Summit from August 31 to September 1, 2025, in Tianjin. He will also have a bilateral with Chinese President Xi Jinping. It will be PM Modi’s sixth visit to China.
Wang Yi is holding border talks with National Security Advisor (NSA) Ajit Doval. Both are the designated Special Representatives (SR) for the boundary talks between the two countries. This is the 24th round of the SR-level talks. Doval travelled to China in December last year and held the SR talks with Wang Yi.
The two had last met in June during the 20th Meeting of the SCO Security Council Secretaries, and had underscored the need to promote overall India-China bilateral relations, including by fostering greater people-to-people ties. Wang will also hold talks with External Affairs Minister S Jaishankar.
Impact Shorts
More ShortsDuring the recent Operation Sindoor, India had accused China of providing real-time intelligence and substantial military support to Pakistan. But more recently, there has been a thaw. It started with the Modi-Xi bilateral meeting on the margins of the 16th Brics Summit in Kazan, Russia, in October 2024. Soon, the two sides had reached agreement on patrolling arrangements along the Line of Actual Control (LAC) in Depsang and Demchok, clearing the last of the post-Galwan friction points. Defence Minister Rajnath Singh and Jaishankar visited China in the last two months to attend the SCO meetings.
Other positives have been, Beijing allowing resumption of the Kailash Mansarovar Yatra, and New Delhi restarting the issuance of tourist visas to Chinese nationals. China confirmed close communication with India to resume direct flights, potentially ending a five-year suspension. The resumption of border trade after a five-year freeze, through designated trade points at Lipulekh Pass in Uttarakhand, Shipki La Pass in Himachal Pradesh, and Nathu La Pass in Sikkim.
Trump’s strong statements and discriminatory tariffs may have unwittingly achieved what once seemed improbable, a thaw in India-China relations, or at least the first signs of one.
Historical Issues and Showdowns
India and China have shared millennia of civilisational contact, linked by Buddhism and the Silk Road. Yet since the mid-20th century, the relationship has been dominated by territorial disputes and security concerns.
The turning point came with China’s annexation of Tibet in 1950, which created a disputed frontier. The 1962 Sino-Indian War left deep scars, followed by clashes at Nathu La and Cho La in 1967 and the Sumdorong Chu standoff in 1987. More recently, the Doklam standoff in 2017 and the Galwan Valley clash in 2020 underscored the fragility of peace along the 3,488-kilometre Line of Actual Control (LAC).
China’s close strategic alignment with Pakistan remains a key irritant for India, particularly the China-Pakistan Economic Corridor (CPEC), which passes through Pakistan-occupied Kashmir (POK). Beijing’s links with insurgent groups in India’s Northeast and its assertiveness in the South China Sea add to mistrust. For China, Indian hospitality to the Tibetan exile community and growing participation in the Quad raise concerns.
Despite recurring tensions, the two countries have sought economic cooperation. The relationship thus oscillates between confrontation and cautious engagement — a pattern often described as “managed rivalry.”
Modi-Xi Engagements
The personal diplomacy between Modi and Xi has shaped the arc of ties over the past decade. Their first significant interaction was in Ahmedabad in 2014, when Modi hosted Xi in his hometown. A year later, Xi received Modi in Xi’an, marking a rare gesture of honour.
The relationship soon faced headwinds. By 2016, China had vetoed India’s attempts to list Jaish-e-Mohammad chief Masood Azhar as a global terrorist and blocked India’s entry into the Nuclear Suppliers Group (NSG). Modi, in turn, raised India’s objections to CPEC passing through POK.
Tensions peaked during the Doklam standoff of 2017, but the impasse ended diplomatically and paved the way for a reset. The Xiamen BRICS Summit later that year and the Wuhan “informal summit” in 2018 re-established a personal rapport. At Wuhan, Modi and Xi directed their militaries to improve communication and avoid escalation — a step that temporarily stabilised the border.
The 2019 Chennai informal summit saw the two leaders engage in a civilisational dialogue at Mahabalipuram, highlighting cultural connectivity. But Galwan in 2020 brought a major rupture, leading to a long freeze in high-level political contact.
Only in October 2024 did the two leaders meet again in Kazan, Russia, on the margins of the BRICS Summit. That meeting produced agreement on disengagement at remaining flashpoints and a commitment to resume SR-level boundary talks. Modi’s upcoming Tianjin visit thus builds on that fragile renewal.
Confidence Building Measures
Over the decades, India and China have negotiated several CBMs to manage tensions along the LAC. These agreements limit the size and proximity of military exercises near the border, mandate prior notification of significant troop movements, and establish flag-meetings and hotline links between commanders.
They also cover cooperation against cross-border smuggling and provisions to address airspace violations or accidental incursions. Such mechanisms are designed to prevent misperceptions from spiralling into conflict.
Yet CBMs are not infallible. Both sides have occasionally violated or interpreted them differently, leading to standoffs. Still, they provide an essential buffer in the absence of a final boundary settlement and remain the best available tools for reducing risk.
Trade Deficit and Economic Ties
Economics remains a paradoxical pillar of the relationship. In 2024-25, bilateral trade reached $127.7 billion, with India’s exports at just $14.9 billion against imports of $127 billion — leaving a record trade deficit of $99.2 billion.
India primarily exports raw materials such as petroleum products and iron ore, while importing large volumes of manufactured goods — especially electronics, telecom equipment, computer hardware, batteries, and solar modules. This imbalance underlines India’s dependence on Chinese supply chains.
Efforts are underway to diversify trade. Talks include expanded pharmaceutical exports from India to China, cooperation on rare earth magnets critical for high-tech industries, and renewed fertilizer exports, particularly urea. For India, reducing the deficit is not only an economic goal but also a strategic imperative tied to self-reliance campaigns such as Aatmanirbhar Bharat.
The Dragon-Elephant Tango
The idea of a “Dragon-Elephant tango” captures the potential of cooperative relations between the two Asian giants. Stable ties could allow both countries to redirect resources from military build-ups toward development.
Economically, complementarities are obvious: China dominates rare-earth production, APIs, and solar technology, while India offers a vast consumer market and a growing technology and pharmaceutical base. Collaboration could sustain growth in both economies.
On the global stage, India and China together wield considerable weight in forums like BRICS, SCO, G20, and the Asian Infrastructure Investment Bank. Coordinated positions could shape reforms in global trade and financial governance, reducing Western dominance.
For such a tango to succeed, both sides must respect each other’s strategic sensitivities: India’s concerns over CPEC and China’s anxieties about the Quad.
Challenges Ahead
Despite the thaw, challenges remain formidable. The boundary dispute is unresolved, with the LAC often contested. The Doklam and Galwan episodes reveal how quickly local incidents can escalate. The durability of CBMs is uncertain without a comprehensive settlement.
hina’s “all-weather” partnership with Pakistan complicates India’s security calculus, especially with CPEC’s passage through POK. India, meanwhile, is strengthening its partnerships through the Quad and Act East policy, signalling caution towards Chinese assertiveness in the Indo-Pacific.
Water security is another concern, with China constructing dams on the upper reaches of the Brahmaputra. Though India receives most of the river’s flow within its territory, Beijing’s upstream projects are viewed as potential leverage.
Economically, India must address its trade deficit and reduce over-dependence on Chinese imports. “Vocal for Local” and diversification through forums such as BIMSTEC and deeper ties with ASEAN, Japan, Australia, and Europe are steps in this direction. Smaller South Asian neighbours, wary of Chinese debt-driven projects, are also open to closer ties with India.
The broader rivalry is unlikely to disappear. But managing it effectively — through caution, diversification, and calibrated engagement — is essential.
Way Forward
India and China need to maintain open channels of communication through bilateral or regional cooperation like in Brics, SCO, etc. They need to rebuild the relations based on a threefold formula of mutual respect, mutual sensitivity and mutual interest. India must balance strategic caution with engagement, maintaining sovereignty while avoiding unnecessary escalation.
In his book, The India Way: Strategies for an Uncertain World, Jaishankar argues that managing China is about realism, agility, and strategic clarity. In this context, it would be prudent for India to pursue a steady course of balancing engagement with deterrence, leveraging global partnerships, and asserting its interests without becoming a proxy in larger power rivalries.
The writer is former Director General, Centre for Air Power Studies. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.
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