India-China Relations: Modi Signals Hope for Stability Amid Past Tensions

In a recent interview, Indian Prime Minister Narendra Modi spoke optimistically about relations with China, emphasizing that the situation along their disputed border had stabilized. He also expressed a desire for stronger bilateral ties.

Modi’s remarks are significant, considering the tensions that have persisted since the violent border confrontation in Ladakh in 2020—the most serious since the 1962 war. In response, Chinese Foreign Ministry spokesperson Mao Ning welcomed his statements, affirming that both nations should work as partners to support each other's growth.

While Modi’s push for closer cooperation may seem ambitious, it aligns with recent positive developments in India-China relations. However, significant challenges remain, both in bilateral ties and in the broader geopolitical landscape, before any meaningful rapprochement can take place.

Despite past hostilities, the India-China relationship has several strengths. Trade between the two countries remains strong, with China continuing to be India’s largest trading partner even after the Ladakh clash. They also collaborate in global forums such as BRICS and the Asian Infrastructure Investment Bank, sharing common interests in economic policy, counterterrorism efforts, and pushing back against Western ideological influence.

Even at the peak of tensions, both nations maintained military-level talks, leading to an agreement in October to restart border patrols. Additionally, Modi and Chinese President Xi Jinping met at a BRICS summit in Russia, where they committed to further cooperation. A further step toward normalization came in January when both countries decided to resume direct flights.

While recent developments indicate progress, the long history of strategic mistrust suggests that fully restoring relations will require sustained efforts from both sides.

Strategic Rivalries and Roadblocks in India-China Relations

Despite areas of cooperation, India-China relations remain complicated by deep-rooted strategic tensions. Each country maintains strong security partnerships with the other's main rival—India aligns closely with the United States, while China has a longstanding alliance with Pakistan.

China's stance on Kashmir has been a persistent point of contention, as Beijing opposes India's policies in the disputed region. Additionally, China has actively hindered India's global aspirations, blocking its entry into key international forums such as the Nuclear Suppliers Group and preventing its bid for a permanent seat on the United Nations Security Council.

India also views China’s expanding influence in its strategic domain with concern. China maintains a significant naval presence in the Indian Ocean, including its only overseas military base in Djibouti, effectively placing it within India’s maritime sphere of interest.

Further complicating ties is China's Belt and Road Initiative (BRI), a massive infrastructure project that extends into India's neighboring countries. Delhi firmly opposes the BRI, particularly because a key segment passes through territory India claims as its own, reinforcing geopolitical frictions between the two powers.

India-China Relations: Key Tensions and Future Prospects

While India and China share economic and strategic interests, deep-seated geopolitical tensions continue to shape their relationship. India has been strengthening ties with Taiwan, a move that Beijing strongly opposes, viewing the island as a breakaway province. Additionally, India provides refuge to the Dalai Lama, whom China considers a separatist threat.

New Delhi is also advancing its defense partnerships in Southeast Asia, negotiating sales of supersonic missiles to regional nations wary of Chinese assertiveness in the South China Sea. Meanwhile, Beijing remains cautious about India’s role in global alliances such as the Indo-Pacific Quad and the Middle East-Europe Economic Corridor, perceiving them as efforts to contain its influence.

Looking ahead, several key developments will determine the trajectory of India-China relations.

1. Border Negotiations

A significant portion of the 2,100-mile (3,380 km) border—an area roughly the size of Greece—remains contested. The Ladakh clash severely damaged trust, but last year’s agreement to resume border patrols was a step toward stability. Further confidence-building measures would signal progress in diplomatic ties.

2. High-Level Diplomacy

Personal diplomacy has played a crucial role in past India-China engagements. If Prime Minister Modi and President Xi meet this year, it could strengthen ongoing efforts to mend relations. Opportunities for such interactions will arise at major summits, including BRICS in July, the G20 in November, and the Shanghai Cooperation Organization (SCO) later in the year.

3. Chinese Investment in India

Despite political tensions, China remains a vital economic partner. Increased Chinese investment in Indian industries—ranging from manufacturing to renewable energy—could help reduce India’s $85 billion trade deficit with China. Greater economic cooperation would create mutual incentives to maintain stability and prevent further deterioration in relations.

As both nations navigate these challenges, their ability to balance competition with collaboration will define the future of this complex and consequential relationship.

India-China Relations: Regional Shifts and External Influences

The evolving political landscape in South Asia and global geopolitical shifts continue to shape India-China relations. Recently, leadership changes in four of India’s neighbors—Bangladesh, the Maldives, Nepal, and Sri Lanka—have resulted in governments with a more pro-China stance. However, these countries have so far pursued a balanced approach, maintaining strong ties with both Beijing and Delhi rather than aligning exclusively with China. If this trend continues, India’s concerns over China’s growing influence in the region could ease.

Another potential factor in India-China relations is Beijing’s evolving ties with Russia. China has deepened its partnership with Moscow due to the Ukraine war, but if the conflict ends, Beijing may scale back its engagement. Given India’s longstanding friendship with Russia, a shift in China’s approach could create new opportunities for cooperation between Delhi and Beijing.

The Trump Factor

The possibility of Donald Trump returning to the White House also adds uncertainty to the equation. While his administration previously imposed tariffs on China, Trump has expressed interest in easing tensions with Beijing. If he follows through, India may reconsider its reliance on U.S. support against China and seek to improve its own ties with Beijing.

Additionally, Trump’s proposed reciprocal tariff policies could negatively impact India, especially given the existing 10% average tariff disparity between the two countries. If U.S. trade policies become more protectionist under a Trump administration, India might have a stronger incentive to enhance its commercial ties with China to counterbalance economic losses.

Competition and Stability

As Asia’s two largest nations, India and China are natural competitors, each viewing itself as a proud civilization-state. However, recent diplomatic progress and the potential for further breakthroughs could bring greater stability to their relationship. If these trends continue, Modi’s conciliatory remarks may signal a genuine shift toward improved ties rather than mere political rhetoric.

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