Prof. Swaran Singh
India-China relations in 2025 are neither in free-fall nor in full recovery. They are in management mode — a state of controlled engagement shaped by shifting global currents.
The India-China relations have once again arrived at an interesting inflection point. After four plus years of frosty equations following the Galwan clashes of June 2020, last eight months have witnessed a series of well calibrated signals of thaw — both in their bilateral interactions as also at various multilateral forums with their leaders having bilateral on the sidelines. This momentum has been accelerated by China this year hosting the Shanghai Cooperation Organisation (SCO) summit that saw India’s National Security Advisor, Defence Minister and Foreign Minister travelling to China and this week China’s Foreign Minister Wang Yi visited New Delhi to create grounds from Prime Minister Modi’s coming month-end visit to China to attend the SCO summit.
So, from resolving various friction points and resuming patrolling on their line of actual control (LAC) to resuming their Special Representatives talks and Kailash-Mansarovar Yatra, restarting direct flights and opening border trade while India relaxes tourist and business visas for Chinese nationals and China resumes exports of tunnel boring machines, fertilisers like Urea and rare earth materials and magnates to prime minister Narendra Modi visiting China after a gap of seven years, New Delhi and Beijing appear to be seriously engaged in testing the waters for their potential rapprochement with game changing geopolitical implications. A likely trilateral Putin-Modi-Xi at Tianjin could actually create an illusion of newfound bonhomie igniting further speculations of India-China ties.
Yet, beneath this surfeit of synergetic gestures lie serious concerns and disjunctions. At the most basic level, their imaginations of what constitutes ‘normalcy’ continue to be very divergent and reveal a complex mosaic of tensions and opportunities. India believes that relations can not be normal until border situation is normalised while China advocates that the entirety of bilateral relations must not be held hostage by any single issue howsoever important it may be.
In the context of their mutual distrust and great power ambitions, these dichotomies will continue to fuel various simmering undercurrents defining this as one of Asia’s most consequential rivalries. But both also realise how managing their differences remains a prerequisite for their centennial goals of becoming developed nations by 2047 and 2049 and this keeps pushing them towards working together.
Trade as the First Sign of Thaw
From the mid-1980s, trade has been the strongest symbol of India-China synergies that has not just survived their occasional periods of tensions but often created atmospherics for easing their irritants. Though from early 2000s, their trade became gradually one-sided, it has continued to grow nevertheless. That is why these numbers speak louder than popular rhetoric that sometimes seem to overshadow their mutual perceptions at least at the street.
In fact it often defies Western experts how India-China trade could continue to grow during these last five years of border crisis with heavy forward military deployments from both sides. These years had hardly any normal interactions other than border talks between their Core Commanders and Working Mechanism for Consultation and Coordinations on border affairs that respectively held 21 and 12 rounds of talks since June 2020. Indeed, the peak of their border tensions had seen their bilateral trade rising from $125 billion in 2021 to $136 billion for 2022 and staying at $132.2 billion for 2023 before sliding to $128 billion for 2024.
Especially, in spite of formidable trade deficit with China which has come to be a matter of concern for New Delhi, India’s imports from China continued to rise from $97 billion for 2021 to $101 billion for 2022, $101.7 billion for 2023 and $113.45 billion for 2024. India’s exports to China, by comparison, had contracted sharply following the pandemic driven supply change disruptions. These had fallen from $22.9 billion for 2021 to $15.3 billion for 2023 and then only marginally improved to $16.65 billion for 2024. So 20% rise in India’s exports to China in last quarter (April-July 2025) should make a small milestone in their changing equations.
Though this does not hold any promise in reducing China’s trade surplus of $99 billion last year yet this new momentum saw, India’s exports and imports from China for this April-July quarter of 2025 rising respectively by 20 and 14 per cent which is an encouraging sign for reversing a two-year trend of sluggish bilateral trade.
New Delhi’s today is exploring joint ventures with Chinese firms. Companies such as BYD (electric vehicles), Hisense and Haier (home appliances), and Oppo, Vivo, Realme, and Xiaomi (consumer electronics) have been invited to deepen their India operations. Likewise, China has also resumed supplies of urea and other fertilisers, rare earth materials, high-grade magnets, and tunnel boring machines — inputs that remain critical to India’s ‘Make in India’ push to strengthen domestic manufacturing.
If trade is the headline, people-to-people connect seems to be the fine print of their calibrated outreach to each other. For much of the post-Galwan period, visas for Chinese nationals were tightly restricted. Over the past year, India first opened up for Chinese technical experts, and in mid-2025 expanded this to include corporate managers. This paves the way for Chinese firms to bring in senior leadership to oversee their projects in India. This signals a pragmatic shift: while strategic mistrust lingers, economic interests are driving India to leverage China’s dominant position in global manufacturing and supply chains.
So both are now talking of achieving an ‘early harvest’ in their border deliberations implying reviving the status quo of post-1988 ‘peace and tranquility’ format and re-opening border trade at Lipulekh, Shipki La and Nathu La. This should ensure better atmospherics for easier border management allowing India and China to focus on their much anticipated role in addressing other regional and global challenges. Indeed, China wishes to keep the focus on the larger global geopolitics to drive faster resolution of bilateral tensions starting with redressing Trump’s tariff tirades which have been partly responsible for accelerating this momentum in exploring India-China economic cooperation.
The Geopolitical Chessboard
Therefore, in spite of this new found enthusiasm, their thaw is hardly linear and, at best, tentative. Beijing’s regional manoeuvres continue to test India’s patience. Its indulgences with India’s immediate neighbours, increasing naval presence in the Indian Ocean region and its recent indulgence with the Chief Advisor in Bangladesh, its arms supplies and live inputs to Islamabad during the India-Pakistan military confrontation early May are bound to make India view China’s regional interactions from national security perspectives.
Chinese Foreign Minister Wang Yi’s recent visit to New Delhi taking him to Pakistan and Afghanistan are therefore bound to ignite some anxieties about China’s strategic use of South Asian peripheries to keep emerging India tied down to its immediate neighbours. At the same time, Beijing and Moscow are also reviving discussions on the Russia-India-China (RIC) strategic triangle which could draw further aspersions from the Trump team.
This puts an added weight on External Affairs Minister S. Jaishankar’s ongoing visit to Moscow, days after Wang Yi had pitched for renewed trilateralism and a likely month end Putin-Modi-Xi meeting at the SCO summit. For Beijing and Moscow, the context is clear: to leverage India’s discomfort with President Trump’s renewed tariffs and Washington’s unpredictable policy swings.
Russia-India-China also have their divergences. Their aspirations to emerge as leaders of the Global South have influenced their interactions. Wang Yi reiterated this sentiment during his New Delhi visit this week stating, “As important members of the Global South, we have the responsibility to take the lead in opposing hegemonism and power politics.” But India refuses to put China in this basket. New Delhi’s Voice of Global South Summits, hosted since January 2023, have consistently excluded Beijing.
For India, China is no longer a post-colonial nation but a great power. Normalcy, therefore, can have only a limited meaning in terms of restoring tranquillity on the LAC and not in global realignment as partners. In other words, while China wants to insulate the broader relationship from border disputes, India insists that border normalisation is a precondition for any broader bonhomie.
But here again these divergences have not dented their continued cooperation at various multilateral forums. At the BRICS+ Summit in Kazan (June 2025), both sides endorsed calls for reforming global financial institutions. Even during border tensions of last five years Prime Minister Modi and President Xi had held meetings in Bali G20 summit of July 2023 and BRICS Johannesburg summit of October 2024. Within the Shanghai Cooperation Organisation (SCO), they have jointly supported counter-terrorism initiatives, even as India remains wary of China’s growing alignment with Pakistan. In the World Trade Organization (WTO) also, both countries have coordinated on resisting Trump-era tariffs and defending the rights of developing economies.
Such issue-based cooperation illustrates the paradox of India-China relations: rivalry does not preclude selective partnership. Beijing’s strategic logic seems to be one of drawing India away from Washington. This structural concern driven outreach of China reckons India’s deepening ties with the United States a their major challenge. Since the 2017 Doklam standoff, Beijing has viewed the Quad (India, US, Japan, Australia) as a platform for Washington to ‘contain’ China with India’s help. Beijing’s resumption of economic supplies, cultural ties, and trilateral diplomacy must thus be read as attempts to wean New Delhi away from that American fold.
For Beijing, therefore, India-China boundary disputes are only tactical while global geopolitics is strategic. This explains Wang Yi’s warning during his New Delhi visit this week saying, “We should never allow bilateral relations to be defined by the boundary question or specific differences to affect the overall picture of our ties.” India’s strategic logic, on the other hand, privileges border first, development always framework. New Delhi, by contrast, sees unresolved borders as the single largest obstacle to normalcy. Without peace and tranquillity on the LAC, no amount of trade or cultural exchange can rebuild public trust. This insistence flows from both political necessity and developmental urgency.
Thaw or Tactical Pause?
Prime Minister Modi has repeatedly linked India’s ‘Viksit Bharat 2047’ vision to a stable periphery. For India, managing China is not just about deterring conflict but also about securing the external environment necessary for sustained economic growth. Trade with China, therefore, is a means to an end — the end being India’s emergence as a developed nation by 2047.
Therefore, all signals of last eight months — trade revival, resumed yatra, business visas, trilateral diplomacy — are real and encouraging yet in-the-making and fragile. No doubt, India and China appear to be edging back to a working relationship, but the foundational mistrust remains. The two sides continue to define normalcy differently, interpret the Global South differently, and envision Asia’s future differently.
History shows that India-China relations have often swung between confrontation and cooperation in cycles: from the “Hindi-Chini Bhai Bhai” phase of the 1950s to the freeze after 1962, from ‘Hindi-Chini buy-buy from early 1980s to the Rajiv Gandhi–Deng Xiaoping handshake of 1988 initiating their chapter of ‘peace and tranquility’ and then Modi and Xi creating their innovative Informal Summits of 2018–19, and then the deep freeze after 2020. The current thaw must be recognised in this historical rhythm of their complex relationship where coordination, cooperation, competition, contestation, confrontation can co-exit together with one of these defining its primary flavour at a given point in time.
Lesson therefore lies on managing the manageable first and using their leverages while responding to their internal and external stimuli that can help them build their developmental partnerships. From this framework of mosaic, India-China relations in 2025 are neither in free-fall nor in full recovery. They are in management mode — a state of controlled engagement shaped by shifting global currents.
As global power competition intensifies — especially under the Trump’s tariff wars — the India-China equation will remain both indispensable and intractable. Whether today’s tentative thaw matures into sustained rapprochement or fizzles into another cycle of confrontation will depend not just on New Delhi and Beijing, but on the evolving dynamics of the global order itself in which both of them are seeing their synergies expanding their combined leverages.
Prof. Swaran Singh is professor of diplomacy and disarmament, Centre for International Politics, Organisation and Disarmament (CIPOD), School of International Studies, Jawaharlal Nehru Univesity, New Delhi.ch
The article was published in International Affairs Review as India-China Relations: Thaw or Tactical Pause in a Shifting Global Order? on 22,August,2025.
Disclaimer: All views expressed in the article belong to the author and not necessarily to the organisation.
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Acknowledgment : This article was posted by Aashvee Prisha , a Visiting Researcher at IMPRI.
