The intricate relationship between India and China, two of the world’s most populous nations and rising powers, is characterised by a complex interplay of border conflicts, economic conflicts, and geopolitical aspirations. At the heart of these dynamics lies the unresolved border dispute, a tangible manifestation of deeper strategic rivalries that reverberate across the Indo-Pacific and influence global power balances.
The India-China border, stretching over 3,500 kilometres, remains largely undemarcated since India’s independence in 1947, following the British legacy. The McMahon Line, drawn by British administrator Henry McMahon, was intended to define the boundary between British India and Tibet. While India considers this line the legitimate international border, China has consistently rejected its validity, arguing that Tibet was not an independent sovereign entity capable of signing treaties. The contentious areas are the Aksai Chin region in the west and Arunachal Pradesh in the east. The 1962 War cast a long shadow over bilateral relations. This war, triggered by a combination of factors including differing perceptions of the McMahon Line, the Dalai Lama’s asylum in India, China’s road construction in Aksai Chin, and the Gaban border incident, resulted in unresolved conflict between the two countries. These incidents have demonstrated the fragility of peace along the borders.
Both countries have embarked on ambitious infrastructure projects to improve connectivity and logistical support for their forces in the border regions. The India-China dynamic extends far beyond their shared border, influencing regional and global power balances. Both nations are vying for influence in the Indo-Pacific, a region increasingly seen as the geopolitical centre of the 21st century. China’s Belt and Road Initiative (BRI), a massive infrastructure development project spanning Asia, Africa, and Europe, is viewed by India with suspicion, as it perceives the BRI as a strategic encirclement and a challenge to its regional preeminence. India, in turn, has sought to strengthen its partnerships with like-minded countries, notably through the Quadrilateral Security Dialogue (Quad) with the United States, Japan, and Australia, which China views as an attempt to contain its rise. Both India and China are members of BRICS (Brazil, Russia, India, China, South Africa) and the Shanghai Cooperation Organisation (SCO), yet their divergent interests often lead to friction within these groupings.
Furthermore, the India-China relationship has significant implications for global trade and economic stability. Both are major trading partners, but India faces a substantial trade deficit with China, raising concerns about economic dependence and national security. The ongoing trade imbalances and disputes over market access add another layer of complexity to their bilateral relations.
The global balancing acts will continue to shape the India-China dynamic. The rise of a multipolar world, with multiple centres of power, necessitates a nuanced approach to international relations. Cooperation between India and China is pivotal for promoting South-South cooperation, which emphasises collaboration among developing countries. Both nations are key drivers of manufacturing and economic growth in the Global South, and their partnership can help to create a more equitable global economic order. South-South trade—economic exchanges among developing nations—has surged, with China’s trade with the Global South reaching $1.6 trillion in 2024, pivoting away from Western markets. India, as a leading voice in the Global South, stands to benefit immensely from deeper ties with China. The SCO and BRICS are significant forums for this. They allow member countries to address issues of shared concern, such as trade, security, and global governance reform, without the dominant influence of Western powers. South-South cooperation should focus on sectors like agriculture, pharmaceuticals, and renewable energy, where India excels.
The world is now facing the USA’s reciprocal tariffs, which are being used as a punitive measure for countries which have a trade surplus with the USA. A shift in India-China relations was seen recently during the SCO Summit in Tianjin. Cooperation between China-India-Russia is seen as a new political-economic strategy. In navigating this geopolitical crossroad, the wisdom of ancient thinkers offers timeless guidance.
Kautilya, the master strategist behind the Arthashastra, has advocated for a policy of samavāya (strategic alliance) and shatru-mitraviveka (discerning friend from foe), urging India to exploit the fissures in global alignments to its advantage. He would counsel engagement with China not as a gesture of trust, but as a calculated move to balance power and secure economic resilience—echoing his principle that “the enemy of my enemy is my friend.” Confucius, on the other hand, would emphasise harmony (hé) and the virtue of reciprocity in statecraft. He might advise both China and India to pursue cooperation through mutual respect and shared prosperity, while maintaining moral integrity and caution in dealings. Both thinkers would converge on the idea that wise leadership lies in adaptability, foresight, and the pursuit of national interest without compromising ethical foundations. In today’s multipolar world, their philosophies underscore the need for India to act with prudence, strength, and strategic clarity.
In this context, both China and India must recalibrate their economic strategy by diversifying trade partnerships and reducing overdependence on the USA market. A pragmatic pivot toward China—despite historical tensions—could offer India access to manufacturing FDI, technology collaboration, and alternative supply chains. A bilateral talk can also see China making firm commitments of imports from India, which can lead to a reduced balance of trade gap. While both nations acknowledge the need for dialogue and de-escalation along the border, fundamental disagreements persist. The challenge lies in managing these differences without resorting to conflict, while simultaneously pursuing their respective national interests.
One potential pathway to de-escalation involves sustained diplomatic engagement and confidence-building measures. Regular high-level meetings, military-to-military contacts, and joint exercises could help build trust and prevent miscalculations along the LAC. However, any lasting resolution to the border dispute would require a significant shift in political will and a willingness to compromise on both sides, which has historically proven elusive.
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