Introduction

Though India and China are two of the world's largest countries in terms of population and age,
they have a complicated, multi-layered relationship impacted by historical, geopolitical and
economic factors. The bilateral evolution of their ties, though, has been one of cooperation and
competition, with the shared border disputes, regional aspirations, and global governance roles
interlaced. The input of China as an economic as well as military superpower and the rise of India
as a major voice of developing nations have redrawn their interactions in terms of new global
power configurations. Despite working together in multilateral regimes, BRICS, SCO and G20,
there is a strategic rivalry brewing in trade imbalances, border tensions and reaching into the
Indo-Pacific and the South Asian regions. To assess the impact of dynamics between India and
China on regional stability and the broader international system, we should understand
them well. Their relationship is a key lens through which we can analyse how the future trajectory
of global power shifts.

Historical Overview

India-China Relations History date back to the 2nd century B.C.

Impact of Buddhism: The contact at the level of people through commerce got a fillip with the
advent of Buddhism into China from India in the first century A.D.

Role of Travellers: Chinese travellers like Fa Xian and Xuan Zang, and Indian travellers like
Bodhidharma, helped in information and cultural exchange between both nations.

Period of Independence Struggle: The period of British Rule saw increased camaraderie between
both nations, which saw events like Kang Youwei's stay in India (1890s), Rabindranath Tagore's
visit to China (1924), sending of the Aid China Medical Mission, which included Dr Dwarakanath
Kotnis, by the Indian National Congress (1938), etc.

Ties after Independence: The period of the 1950s saw the Hindi-Chini Bhai Bhai phase, which led to
the strengthening of ties.

India-China Relations Timeline

India-China relations have evolved with time and witnessed several ebbs and flows. The
chronology of key events is mentioned below:

1950: Establishment of diplomatic relations between China and India.

1954: Signing of the “Panchsheel” Five Principles of Peaceful Coexistence
1962: Brief border war between India and China
It was fought over disputed territory in the Aksai Chin region and Arunachal Pradesh.
1976: Restoration of full diplomatic ties after 15 years
1984: Signing of the Most Favoured Nation trade agreement.
1986: China's condemnation of India's move to make Arunachal Pradesh a full-fledged state.
1998: India conducts nuclear tests, which receive Chinese criticism.
2005: Chinese Premier Wen Jiabao's support for India's U.N. Security Council bid.
2006: Reopening of Nathu La pass for trade
2017 - 2022: Chinese incursions in Doklam, Galwan Valley, and Tawang.

India-China Border Disputes

India-China relations have witnessed several border disputes. The Sino-Indian border dispute
revolves around the sovereignty of key territories like Aksai Chin and Arunachal Pradesh,
complicated by historical colonial influences. The dispute stems from unclear historical boundary
demarcations made during British colonial rule and the McMahon Line agreement, which China
repudiates. The several border disputes between India and China are discussed below:

Boundary Line dispute: India acknowledges the McMahon Line as the 'Actual Line of Control
(LAC)' between India and China, while China does not recognize it.

Sino-Indian War: The 1962 Sino-Indian War stemmed from the border dispute in Akshai Chin and
Arunachal Pradesh.

Nathu La Clashes: The Nathu La clashes occurred in 1967 when the People's Liberation Army
(PLA) attacked Indian posts in Sikkim, resulting in a decisive tactical advantage for India, which
successfully drove back Chinese forces and destroyed PLA fortifications.

Doklam issue: The 2017 China-India border standoff, also known as the Doklam standoff, was a
73-day military conflict between India and China over the construction of a road by Chinese
troops in the disputed Doklam region. The standoff began on June 16, 2017, with Chinese troops
extending a road, prompting India to launch Operation Juniper on June 18, supporting Bhutan.
The standoff lasted over two months, and on August 28, 2017, both nations withdrew their troops.

Galwan Clashes: Chinese troops invaded Indian territory in the Galwan River valley in 2020,
causing objections to Indian road construction. It became the first fatal confrontation between the
two sides since 1975.

Yangtse Clash (2022): The Yangtse clash occurred in Arunachal Pradesh, involving Indian and
Chinese troops. Around 300 Chinese troops advanced on Indian outposts near Chumi Gyatse
Falls, resulting in an hour-long hand-to-hand combat and serious injuries on both sides.
India-China Political Relations

India-China relations were established in 1950 when India became the first non-socialist bloc
country to establish diplomatic relations with China.

1. Panchsheel, the Five Principles of Peaceful Coexistence, were formally outlined in the 1954
India-China Agreement on Tibet. They include:

-​ Mutual respect for territorial integrity and sovereignty

-​ Mutual non-aggression
-​ Mutual non-interference
-​ Equality and mutual benefit
-​ Peaceful coexistence

2. High-Level Visits: Despite differences, both countries engaged at a high level regularly. For
instance, Prime Minister Modi and President Xi held their first and second informal summits in
Wuhan (2018) and Chennai (2019), respectively.

3. Dialogue Mechanisms: Over thirty dialogue mechanisms exist between India and China,
covering political, economic, cultural, people-to-people, consular matters, and regional and global
issues.

India-China Multilateral Relations

BRICS: BRICS, which stands for Brazil, Russia, India, China, and South Africa, is an informal
grouping of emerging economies with India and China among its founding members.

SCO: Shanghai Cooperation Organization (SCO) is an intergovernmental organization established

in 2001 with founding members Russia and China.
India joined the grouping in 2017 and, since then, remained an important contributor.

G20: Group of Twenty (G20) is an intergovernmental forum for international economic

cooperation. India and China have cooperated in the progress of the G20.

AIIB: Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that
provides financing for infrastructure in Asia and beyond. India and China are included among its
founding members.

India-China Economic Relations

Trade Deficit: India's trade deficit with China has grown exponentially, reaching USD 85.1 billion in
the fiscal year 2024. The deficit is attributed to a narrow basket of commodities exported to China
and market access barriers for agricultural products and competitive sectors like pharmaceuticals
and IT.

Bilateral Investments: Mutual investments between India and China have not kept pace with the
growing trade volumes. The Ministry of Commerce of China reported a 68.3% decrease in
Chinese investments in India in 2021, with a cumulative total of USD 5.4 billion. Meanwhile,
Indian investment in China declined by 47.4% in 2021, with a total investment of USD 943.96
million.

Dialogue Mechanisms: India and China have several dialogue mechanisms for shaping economic
relations which include the Joint Group on Economic Relations, Science and Technology (JEG),
Strategic Economic Dialogue (SED), etc.

India-China Cultural Relations

Religious sites: India constructed a Buddhist temple in Luoyang, Henan Province, in honor of the
Indian monks Kashyapa Matanga and Dharmaratna in 2010.

Diaspora: As of 2024, the Indian diaspora in China is relatively small, with a population estimated
at around 56,000 individuals, primarily consisting of medical students and business professionals

Bollywood Movies and Yoga: The popularity of Indian Bollywood movies like Dangal and Yoga in
China has improved India’s cultural relations with China.

Education: In 2006, India and China signed the Education Exchange Programme (EEP), an umbrella
agreement that governs educational cooperation between the two countries.

India-China Military Relations

Peace Agreement: India and China signed an Agreement on the Maintenance of Peace and
Tranquillity in 1993, which promoted the peaceful resolution of boundary disputes.

Military Exercises: India and China also conduct a “Hand in Hand” exercise which aims to enhance
interoperability between the two armies, particularly in counter-terrorism operations.

India-China Recent developments

Reduction in Border tensions: India and China have agreed to disengage and resume patrolling in
the Depsang Plains and Demchok areas along the Line of Actual Control, as before the May 2020
tensions.
Resumption of Kailash Mansarovar: India and China have agreed to resume the Kailash
Mansarovar Yatra and increase flights between the two nations.

Normalization of Ties: India-China Relations are entering a phase of recovery, with both nations
moving ahead to celebrate the 75th anniversary of the establishment of diplomatic ties in 2025.

India-China Relations Challenges

Territorial Dispute: India-China Relations faced several territorial disputes in Ladakh, Doklam,
Arunachal Pradesh, etc., mainly due to the Five Finger Policy and Salami Slicing Strategy (policies
used incrementally by Beijing to improve its foreign policy position) of China.

Five Finger Policy: It regards Tibet as China's right-hand palm, with five fingers on its periphery:
Ladakh, Nepal, Sikkim, Bhutan, and the North-East Frontier Agency (now known as Arunachal
Pradesh), which China considers its responsibility to "liberate".

Huge Trade Imbalance: India has the largest trade deficit with China. India's trade deficit with
China has been increasing, reaching $85.1 billion in the fiscal year of 2024.

String of Pearls: It is a Chinese strategy to encircle India through a chain of military and
commercial facilities on land and sea.
Incursion in the Indian Ocean: Chinese Interference in the Indian Ocean and spying on India using
vessels like Yuan Wang 5 has led to security concerns for India.

Water Security: China's plans to build the world's largest dam, the Yarlung Zangbao Dam on the
Brahmaputra (known as Yarlung Zangbao in China), have raised concerns about the flow of water
in lower riparian countries such as India and Bangladesh.

India-China Relations Way Forward

India-China relations have posed serious challenges for India due to Chinese incursions and its
debt trap policy in the Indian Subcontinent.\

Necklace of Diamonds: The Necklace of Diamonds is India's counter-strategy to China's "String of

Pearls" strategy in the Indian Ocean. The strategy involves building naval bases, improving
relations with other countries, and developing air corridors.

Make in India: The trade deficit can be tackled by focusing on the Aatmanirbhar Bharat and Make
in India initiatives by supporting local production and thereby reducing Chinese imports.

Improving Defense capabilities: India needs to boost its defence expenditure to develop sufficient
deterrence against any Chinese incursion.
The induction of Rafale jets and entering into a deal with the US for F-35 fighter jets are steps in
the right direction.

Utilization of Multilateral Forums: India may focus on multilateral forums like QUAD and I2U2,
with the presence of the US to counter increasing Chinese influence in the region. Further, India
should try to reduce Chinese dominance in forums like SCO, BRICS, etc.

Border Infrastructure Development: India needs to expedite its border infrastructure

development to tackle future border disputes. Programs like Project Arunank and Vibrant Village
Program can help in this endeavour.

Tier 3 Diplomacy: India-China Relations can also use Tier 3 Diplomacy i.e. People-to-people ties to
improve their existing relations..

Lead Regional Development: Strengthen initiatives like PM-DevINE, BIMSTEC, and South Asia
Sub-Regional Economic Cooperation (SASEC) to build goodwill in the South Asian periphery.
New infrastructure in Nepal, Bhutan, and Sri Lanka helps counter China’s BRI outreach in the
region.