China must accept India is looking after itself

The evolving dynamics between China and India, the world’s most populous nations and rising economic powers, are at a critical juncture. Recent developments have shown encouraging signs in bilateral relations, with both sides expressing a willingness to re-engage constructively. Foreign Minister Wang Yi recently visited New Delhi, where he met Prime Minister Narendra Modi, External Affairs Minister Subrahmanyam Jaishankar and National Security Adviser Ajit Doval. This has renewed the momentum of high-level exchanges and paved the way for Modi’s visit to China for the Shanghai Cooperation Organisation (SCO) summit at the end of August. The shifting geopolitical environment has given the two countries a major strategic opportunity to achieve common understandings and reset bilateral relations. To do so, however, requires Beijing to adopt a pragmatic approach and view New Delhi as a partner in the reform of the regional and global order. Restarting talks on India’s participation in the Regional Comprehensive Economic Partnership (RCEP) can be a crucial step towards constructive collaboration in the longer term. Notably, after President Xi Jinping and Modi met at the Brics summit in Kazan, Russia, last October, both countries have initiated discussions to restart direct air services, which had been suspended since 2020. This was followed by their agreement to lift travel bans on each other’s citizens. In July, Niti Aayog, a government think tank in India, proposed relaxing investment ownership restrictions on Chinese entities. These overtures are particularly significant against the backdrop of global economic and political uncertainties. While US Vice-President J.D. Vance’s visit to India in April had raised expectations of a deepening strategic partnership against China at the time, President Donald Trump’s decision to raise tariffs on India to 50 per cent has encouraged Delhi’s pivot towards Beijing. For far too long, China and India have viewed each other primarily through the lens of rivalry. This competitive dynamic is rooted in their shared self-perception as ancient civilisations with aspirations for regional and global leadership. The tension has been exacerbated by long-standing and unresolved territorial disputes, most notably the Galwan Valley clash in June 2020, which resulted in casualties on both sides and a significant deterioration in relations. The aftermath saw India ban more than 200 Chinese apps and tighten scrutiny of Chinese investments, further straining economic ties. The agreement to resume dialogue on territorial disputes following Wang’s visit is an important first step to rebuilding trust, ensuring that differing views on border demarcation will not have negative spillover effects on the overall relationship. China’s perception of India as a potential ally of other superpowers – historically Russia, and more recently the United States – has also fuelled strategic mistrust. However, Beijing must come to terms with the reality that India’s policy of strategic autonomy and non-alignment means it seeks to secure its independent national interests, not simply align with one bloc against another. Despite political and security tensions, economic relations between China and India remain robust. In 2024, China overtook the US to become India’s largest trading partner, with bilateral trade reaching US$118.4 billion. India is heavily dependent on Chinese raw materials and products, especially in sectors such as electronics, pharmaceuticals and renewables. Although the Modi government launched the “Make in India” initiative in 2014 and the Production Linked Incentive in 2020 to boost domestic manufacturing capacity and reduce dependence on Chinese imports, the results have been mixed. While there has been some success in sectors such as electronics and pharmaceuticals, the overall impact has been limited, with only 37 per cent of production targets met by October 2024. This downstream success but upstream failure in achieving manufacturing independence underscores the strategic interest for India in exploring a closer, complementary economic relationship with its neighbours, particularly in areas where supply chain integration is critical. What China can offer is not just critical materials, manufacturing products or machinery but the know-how in reforming the domestic market and upgrading its industries. Among various multilateral frameworks, RCEP represents low-hanging fruit of mutual benefit that both China and India could lead. India withdrew from RCEP negotiations in 2019 over concerns about trade deficits, particularly with China, and the potential negative impact on domestic industries. However, the agreement remains open for India’s future participation. Several RCEP members, including China, have appeared willing to address India’s concerns, including trade imbalances, by offering greater market access for Indian goods and services, reducing non-tariff barriers and engaging New Delhi in multilateral platforms such as Brics, the SCO and the Asian Infrastructure Investment Bank to build trust and align economic interests. India’s partnership with the US and its participation in the Quadrilateral Security Dialogue are Delhi’s response to its complex relationship with China. A potential US-India trade deal would provide Delhi with greater leverage vis-a-vis Beijing, potentially addressing some of the imbalances in the bilateral economic relationship. Nonetheless, however the US-India tariffs dispute pans out, India’s policy of strategic autonomy means it will continue to balance ties with all the major powers, seeking to maximise its own interests without becoming a pawn in other countries’ rivalries. As two of the most important voices of the Global South, China and India have a shared responsibility to instil greater certainty in global governance. Their interactions within multilateral frameworks such as Brics, the SCO and potentially RCEP will significantly influence the future of multilateralism in a world mired by uncertainty.

China must accept India is looking after itself

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}New Delhi’s strategic autonomy means it will balance ties with all major powers, maximising its own interests without becoming a pawn

New Delhi’s strategic autonomy means it will balance ties with all major powers, maximising its own interests without becoming a pawn