The unilateral policies pursued by US President Donald Trump are reshaping the global order, making the emergence of new strategic and economic alliances on the world stage increasingly inevitable. In this shifting landscape, the relationship between India and China assumes particular significance. Both nations are rising Asian powers and are home to two of the world’s fastest-growing economies. China has already emerged as the second-largest economy globally, after the United States. If cooperation between India and China were to deepen—and if Russia, another major global power, were to align with them—it could pave the way for a new world order capable of counterbalancing American neo-economic dominance.
In this context, the evolving role of BRICS (Brazil, Russia, India, China, and South Africa) also holds considerable importance. The manner in which this bloc functions could open new avenues for a more balanced global power structure, especially at a time when President Trump’s efforts to assert unilateral dominance are rendering institutions like the United Nations—established in the aftermath of World War II—progressively less effective. Amid these global shifts, India must remain vigilant in safeguarding its national interests while sustaining the momentum of its growing economy.
A closer look at India–China economic and commercial ties reveals that bilateral trade has expanded substantially since the onset of economic liberalization in both countries. India’s industrial output across several sectors has benefited from access to affordable Chinese technology and inputs. Although the trade balance remains skewed in China’s favor—India imports significantly more than it exports—Indian industries often use Chinese raw materials and components to manufacture finished goods that are then exported to global markets. This trade flow declined after the June 2020 Galwan Valley clash in Ladakh, following which India imposed restrictions on Chinese investments and banned several Chinese companies. Nevertheless, India continues to rely heavily on imports from China, ranging from essential raw materials to finished products, particularly in the electrical and electronics sectors.
It is also important to recall that India–China relations since independence have been marked by turbulence and can broadly be divided into two phases. The first phase, prior to 1962, was characterized by cordial relations and slogans such as “Hindi-Chini Bhai Bhai,” symbolizing friendship and solidarity. This period ended abruptly in 1962, when China launched an unprovoked invasion of India and occupied the Aksai Chin region. During this conflict, Chinese forces advanced as far as Tezpur in Assam, leaving a lasting impact on bilateral relations.
Under international pressure, these forces withdrew, but China seized the Aksai Chin region, which remains under its control to this day. China maintains that it does not accept the McMahon Line, drawn in 1914 between India, China, and Tibet, because the British government at the time considered Tibet an independent country when drawing the line, even though Tibet was, in China’s view, its territory. India’s policy of considering Tibet independent also continued until 2003, but that year, the then-Prime Minister, the late Atal Bihari Vajpayee, head of the ruling NDA government, changed India’s stance by recognizing Tibet as an autonomous part of China. In return, China accepted Sikkim as part of India, which had merged with the Indian Union in 1974. However, China continued to adhere to its own interpretation of the border between the two countries and, after 2003, began to assert its claim over the Indian state of Arunachal Pradesh. This clearly demonstrates that the border issue between the two countries is extremely sensitive. To resolve this, a plan was formulated in 2003, and an agreement was reached to establish a high-level dialogue mechanism. After the change of government in India in 2004 and the establishment of Dr. Manmohan Singh’s government, this dialogue mechanism was established in 2005, involving India’s National Security Advisor and his Chinese counterpart. Since then, more than two dozen meetings of this dialogue mechanism have taken place, but without any concrete results. Therefore, the strengthening of relations between the two countries also depends on how quickly the border dispute is resolved and what China’s attitude is in this matter. As far as economic cooperation between the two countries is concerned, it has been steadily increasing since 1996, although it slowed down after 2020. However, in the changed circumstances, India feels that economic activities with China should be increased, and progress should be made simultaneously towards resolving the border dispute.
The most important aspect of this matter is that India and China are two historically and culturally intertwined neighboring countries, and both their cultures are considered among the world’s oldest. If economic relations between these two countries strengthen, it will pave the way for progress in other developing countries of the world. Therefore, when the then Defence Minister and former President, Bharat Ratna, the late Pranab Mukherjee, stated during his 2006 visit to China, while standing on Beijing soil, that “today’s India is not the India of 1962,” the clear message was that China should recognize the changed regional realities, modify its stance, and move forward in cooperation with India. However, the global situation is no longer what it was in 2006, as the US attitude has brought about a qualitative change. Considering these changes, Mr. Rajiv Gauba, a member of India’s NITI Aayog, stated that there is a need to ease the investment restrictions imposed on Chinese companies, as restrictions on trade and civil activities between the two countries have been lifted recently.
