India and China appear to be testing the waters of rapprochement after years of border hostilities and political distrust. Chinese Foreign Minister Wang Yi’s early August visit to New Delhi marked the first high-level trip since the Galwan clashes in 2020. Soon after, in his first visit to China since 2018, Prime Minister Narendra Modi traveled to Tianjin for the Shanghai Cooperation Organization (SCO) summit, signaling that both countries were looking to re-engage diplomatically.
So far, some border passes have been reopened for trade, air travel has been restored, and hydrological data-sharing has resumed. These gestures indicate normalization, but whether that will lead to a durable détente or merely a tactical pause remains to be seen.
Tariffs and the Limits of U.S. Reliability
More than anything else, India’s recalibration has been shaped by the Trump administration’s tariff escalations. First, in July 2025, Washington decided to impose 25 percent base tariffs on Indian goods. Then, in August, they increased the tariff rate to 50 percent, applicable till New Delhi agrees to stop purchasing Russian oil. This step – treating India more harshly than China, even though China imports more Russian energy – has left Indian policymakers doubting the dependability of the United States as a strategic partner.
The problems began earlier, when U.S. President Donald Trump made unverified claims about having successfully mediated a ceasefire during the 2025 India-Pakistan conflict, a claim that New Delhi denies. Further, Pakistan’s Army Chief Asim Munir was invited to the White House while U.S. rhetoric toward India sharpened, reviving old doubts about Washington’s historic tilt toward Pakistan.
India’s response has been to revive and reinforce its “multialignment” strategy, which had been neglected in favor of closer U.S. ties after the clashes with China in Galwan Valley. The renewed focus on the Russia-India-China platform, evident during the SCO summit, underscores New Delhi’s preference for options beyond Washington. This reflects a consistent feature of Indian diplomacy: using multilateral forums to expand room for maneuver and avoid dependence on any single power.
For Beijing, the calculus is largely opportunistic too. China’s economy has shown signs of slowing down, while escalating frictions with Washington, ranging from tariff battles to semiconductor export controls and restrictions on critical technologies, have been affecting Beijing’s maneuverability. Against this backdrop, limited engagement with India offers both symbolic and practical relief. India, now the world’s fifth-largest economy, presents opportunities for trade diversification and a chance to complicate U.S. attempts at coalition-building in Asia. Xi Jinping’s statement at the SCO summit that “border disputes should not define bilateral relations” reflects less a change of heart than a tactical effort to compartmentalize tensions and reframe priorities.
Cycles of Confrontation and Fragile Thaws
Bilateral relations between India and China have followed a cyclical pattern where sporadic escalations give way to limited accommodation, only to relapse when structural disputes resurface. The 1962 border war froze ties for decades. It wasn’t until the 1980s that both sides agreed to normalize relations to maintain peace along the Line of Actual Control (LAC).
More recently, Modi and Xi pledged to improve communication at the 2018 informal Wuhan summit, which followed the 2017 Doklam standoff. Yet this reset crumbled quickly. The 2020 Galwan Valley clashes resulted in the first combat fatalities along the LAC in 45 years and hardened positions in New Delhi, bringing an end to the policy of compartmentalizing border disputes from broader engagement.
Yet these shocks notwithstanding, economic relations remain robust. China is still India’s largest trade partner; bilateral trade in 2023-24 reached $118.4 billion. Moreover, recent events also constitute another example of fragile thaws. The disengagement agreement reached in October 2024 established an expert group and a working group to delineate less contentious border regions. This was a very limited development and yet represented a modest step forward.
Connectivity has started to recover with the reestablishment of direct flights, the reopening of passes for trade as well as the Kailash Manasarovar Yatra pilgrimage, and the resumption of visas.
Diplomacy at the highest levels has also restarted, with Wang Yi’s August 2025 trip to New Delhi involving substantive meetings with External Affairs Minister S. Jaishankar and National Security Advisor Ajit Doval, while the long-dormant dialogue between Special Representatives on boundary management was revived.
Cooperation has even extended to the hydrological data sharing on the Brahmaputra, though this provisional measure is underpinned by Chinese projects upstream that India is wary of.
All of these measures indicate that both sides have an interest in keeping competition under control. But they are only tactical measures and not strategic breakthroughs. Experience teaches us that symbolic gestures can create an opportunity for engagement, but without structural change, every thaw may just be an interregnum before renewed confrontation.
Shared Interests
If India and China were to formalize this thaw, then the implications would extend well beyond their bilateral relationship.
Both economies sit at crucial nodes in global production networks. India sources more than 60 percent of its solar modules from China and depends on Chinese active pharmaceutical ingredients for its generics industry. Chinese firms, meanwhile, look to India as both a major consumer market and a potential partner in diversifying electronics assembly. Predictability in these flows would not only ease market volatility but also reduce the exposure of smaller Asian economies that are tethered to the same supply chains. The stability dividend is therefore regional as much as bilateral.
India and China both aspire to lead in forums such as BRICS and the New Development Bank, yet their competing agendas often dilute collective bargaining power. A more coherent stance could amplify developing economies’ influence on global finance, trade governance, and climate negotiations. For India, convergence would demonstrate that it has options beyond Western platforms; for China, it would blunt narratives of isolation. This is not about forming an anti-Western bloc but about shaping rulemaking from within, forcing established powers to accommodate a more plural order.
In energy, the convergence is already tangible. India has become Russia’s second-largest buyer of oil, after China, despite Western sanctions. Both countries reject secondary sanctions and emphasize the inconsistency of European states indirectly consuming Russian oil via Indian refiners. If New Delhi and Beijing were to coordinate more closely, they could entrench parallel energy trading arrangements that weaken Western leverage over global markets. For producers like Russia and for consumers across the Global South, such arrangements would offer stability, but for Washington and Brussels, they would raise the prospect of a fragmented energy order.
Yet these potential dividends remain dependent on stability at the border. As long as territorial disputes and military deployments dominate perceptions, the broader economic and political gains will remain hostage to sudden reversals.
Roadblocks to a Durable Détente
The obstacles to a sustainable thaw remain formidable, and in several respects, they are deepening. The border question continues to overshadow the relationship. Despite incremental disengagement in certain sectors, both militaries maintain forward deployments at levels far higher than before 2020. Road construction and infrastructural projects on both sides have increased, and after 24 rounds of the special representatives’ dialogue, there is yet to be any indication of convergence on territorial claims. Without substantial progress there, confidence in anything broader will remain weak.
The Pakistan factor also complicates these dynamics. The May 2025 conflict demonstrated just how deeply embedded the defense partnership is between Beijing and Islamabad. Pakistan’s utilization of Chinese-made J-10 aircrafts, PL-15 missiles, and HQ-9 systems (which were reportedly aided by real-time intelligence from China) shows the extent to which crises on the subcontinent can draw in Beijing. Just as troubling, the extension of the China-Pakistan Economic Corridor through disputed territories and China’s growing placement into trilateral engagements with Pakistan, Bangladesh, and Afghanistan increases the perception of encirclement for India.
Strategic competition is becoming a new domain, too. China is pressing ahead with the world’s largest hydropower project on the Yarlung Tsangpo, despite Indian objections about downstream risks. Its expanding naval presence in Gwadar, Hambantota, and Djibouti reinforces New Delhi’s concerns about maritime encirclement. India has responded by keeping restrictions on Chinese investment and technology firms in place, underscoring how economic and security distrust reinforce one another.
Domestic politics further constrain room for maneuver. In India, public opinion remains sharply skeptical of China. In Beijing, suspicions about India’s participation in the Quad and its outreach to Southeast Asia sustain doubts about whether New Delhi would ever commit to genuine accommodation.
Finally, the Tibet question looms as a potential flashpoint. The 90-year-old Dalai Lama’s recent suggestion that his successor should emerge from a “free” state directly challenges Beijing’s authority claims. For New Delhi, the issue is a latent variable: largely dormant in periods of calm but capable of reigniting tensions regardless of progress elsewhere.
Managed Competition, Not Partnership
India and China’s current engagement seems more about management and not reconciliation. Current realities, from U.S. tariffs to supply chain disruptions, have led to an easing of tensions, but the structural problems that have defined the relationship are not being addressed. History suggests this thaw is another tactical adjustment rather than a lasting shift.
A more stable equilibrium would require institutionalized mechanisms on borders, investment, and crisis communication – steps neither side has taken. Until then, the two powers will continue their cautious dance: cooperating when interests converge, but always close to renewed confrontation and even conflict.