India and China Thaw Tense Relationship Amid US-Led Economic Pressure: A Look at the Future of India-China Relations

Five years after a deadly clash in the Himalayas, relations between India and China seem to be thawing under the pressure of U.S. economic policies. This week, Indian Prime Minister Narendra Modi will visit China for a summit hosted by Chinese leader Xi Jinping, marking the first time since 2018 that the two leaders have met amidst ongoing tension between New Delhi and the White House over potential 50% tariffs on Indian goods.

The upcoming Shanghai Cooperation Organization (SCO) summit in Beijing will see attendance from world leaders including Russia, Pakistan, Iran, and Central Asia, with India’s presence signaling a strengthening of ties between the two Asian powers. This developing alignment poses a threat to years-long efforts by successive U.S. administrations to cultivate India as a counterweight against a rising China.

While a thaw in India-China relations was already underway, Trump’s “America First” policies have reportedly prompted the leaders, both known for their nationalist political platforms, to explore a necessary partnership. The threatened U.S. tariffs on Indian purchases of Russian oil have been particularly difficult for Prime Minister Modi, who previously enjoyed a close relationship with President Trump.

Manoj Kewalramani, head of Indo-Pacific studies at the Takshashila Institution research center in Bengaluru, suggests that these tariff threats have added urgency to India’s efforts to stabilize its relationship with Beijing. However, he stresses that it is not the sole driver of the reset, as both countries are seeking to secure their national interests through a more stable partnership.

Over the past few years, the U.S. has worked to strengthen strategic ties with India through technology transfers and joint military exercises, collaborating with the world’s largest democracy to counter China’s growing influence in the Indo-Pacific region. Losing India would be detrimental for the U.S., according to analysts.

Recent improvements in India-China relations were acknowledged during a meeting between Chinese Foreign Minister Wang Yi and Prime Minister Modi in New Delhi last week. Modi stated that steady progress had been made in their relationship, with stable, predictable, constructive ties between the two countries contributing significantly to regional and global peace and prosperity.

The SCO summit is unlikely to result in a fundamental realignment but rather signals a shift toward greater cooperation. While the U.S. remains India’s most important partner, China is its largest neighbor, necessitating diplomatic engagement. The trajectory of India-China relations has evolved from post-colonial brotherhood to modern-day strategic rivalry, with ongoing border disputes and military tensions serving as obstacles to a more stable relationship.

The deadly clashes in the Galwan Valley in 2020 upended the balance between the two countries, but there have been signs of normalization since their meeting at the BRICS summit in Russia last October. Direct flights cancelled due to the COVID-19 pandemic have been reinstated, and tourist visas are once again being issued for both countries’ citizens.

India’s strategy is one of strategic autonomy, prioritizing national interests over rigid bloc allegiance. This approach will be on display at the SCO summit, where Modi will engage with leaders from traditional adversary Pakistan and traditional partner Russia, as well as China. This engagement with a China-dominated bloc stands in contrast to India’s deepening ties with the Quad – a security grouping that includes the U.S., Japan, and Australia – often seen as a democratic counterweight to China’s influence in the Indian Ocean.

As tensions persist at the disputed Himalayan border, India is working to insulate its diplomatic and economic interests from the security conflict with China. Both sides understand that a further deterioration of their relationship would not be beneficial for either party. This strategic recalibration toward China is driven more by economic necessity than a softening security posture, as China remains India’s second-largest trading partner after the U.S., with bilateral trade reaching $118 billion in 2021. India depends on China not only for finished goods like electronics but also for essential intermediate products and raw materials that fuel its own industries.

However, this economic interdependence exists under the shadow of a tense military reality. Any talks between Modi and Xi would need to address the ongoing border dispute and work towards maintaining peace and tranquility, as agreed upon during their recent discussions. The future of India-China relations will be defined by their ability to manage this delicate dance, potentially leading to a more stable relationship where competition does not necessarily result in conflict.