- The article addresses the complexities of India-China relations post the 19 January 2025.
- Highlights the disengagement agreement October 2024 , need for India to navigate internal reforms, global partnerships, and supply chain diversification to counterbalance China’s influence.
Key Areas of Convergence
Trade and Economic Ties
- Bilateral Trade: FY24 trade reached US$ 118.40 billion; India exported US$ 16.65 billion and imported US$ 101.74 billion.
- Mutual dependencies: India relies on Chinese machinery, electronics, and chemicals; China imports Indian raw materials and software services.
Infrastructure Financing
- Collaboration through Asian Infrastructure Investment Bank (AIIB) and New Development Bank (NDB) for regional development.
- Recent initiatives like the China Calcutta Service (CCS) aim to enhance trade connectivity.
Climate Change and Renewable Energy
- Both nations focus on renewable energy and sustainability under frameworks like the Paris Agreement.
- China is the top solar energy producer, while India targets 500 GW renewable energy capacity by 2030.
Health and Pharmaceutical Cooperation
- Strengthening supply chains for Active Pharmaceutical Ingredients (APIs); China supplies 70% of APIs for Indian pharmaceuticals.
People-to-People Exchanges
- Cultural exchanges and tourism have increased, notably around shared heritage and educational collaborations.
Science and Technology Cooperation
- Cooperation in AI, space research, and telecommunications; both countries are leaders in these sectors.
Regional Stability and Counterterrorism
- Joint efforts in counterterrorism within the SCO framework, despite geopolitical tensions.
Key Areas of Friction
Border Disputes
- Ongoing tensions over the Line of Actual Control (LAC); incidents like the Galwan Valley clash have eroded trust.
Trade Imbalance
- India faces a significant trade deficit of US$ 85 billion with China, leading to concerns over market access and domestic industry impact.
Infrastructure Development
- China’s infrastructure projects along the LAC raise strategic concerns for India.
China-Pakistan Relations
- China’s support for Pakistan, particularly concerning Kashmir, complicates bilateral relations.
Opposition to India’s Global Aspirations
- China blocks India’s bids for a permanent UNSC seat and membership in the Nuclear Suppliers Group (NSG).
Belt and Road Initiative (BRI)
- India rejects the BRI due to sovereignty concerns and debt-trap diplomacy.
Water Disputes
- China’s dam projects on the Brahmaputra raise water security issues for India.
Geopolitical Rivalry
- Strategic competition in the Indo-Pacific; India opposes China’s claims in the South China Sea.
Strategies for India to Counterbalance China
Strengthening Manufacturing
- Promote domestic production while maintaining selective trade ties.
Green Energy Collaboration
- Engage in multilateral climate efforts, while diversifying renewable energy sources.
Joint Ventures
- Encourage non-sensitive collaborations with Chinese firms, particularly in EV manufacturing.
Border Development
- Enhance border infrastructure while maintaining diplomatic channels.
Multilateral Cooperation
- Use platforms like AIIB and engage in partnerships such as Quad to counterbalance China’s influence.
Technology Collaboration
- Focus on indigenous innovation in critical tech sectors while collaborating in less sensitive areas.
Diversifying Trade
- Reduce dependency on Chinese imports by enhancing trade with ASEAN and African nations.
Strategic Infrastructure Development
- Develop dual-use infrastructure in sensitive regions to enhance regional stability.
Strategic Stockpiling
- Create reserves of critical imports to buffer against disruptions caused by reliance on China.
Reviving Traditional Industries
- Revitalize local industries to reduce dependence on Chinese imports, enhancing the MSME ecosystem.
The India-China relationship requires a nuanced approach balancing cooperation and caution. India must focus on self-reliance, supply chain diversification, and strengthening alliances to safeguard its interests while promoting regional stability.