India could do well with a large dose of Chinese Foreign Direct Investment (FDI) as well as trade in key commodities, such as fertilisers and rare earth
External Affairs Minister S Jaishankar and Chinese Foreign Minister Wang Yi, New Delhi, August 19, 2025
BY ALL ACCOUNTS, the visit of China’s Foreign Minister Wang Yi to India went off well. ‘Well’—given the state of India-China relations—is a subjective assessment. What is palpable is a sense of forward movement in stabilising the border situation, something that has remained volatile since the Doklam standoff in 2017. The clash between the armies of the two countries at Galwan (2020) threatened to take them to war. Five years later, there is a thaw in bilateral relations.
Before anyone gets carried away—say, by reading Wang’s visit as somehow India’s ‘signalling’ to the US—a dose of realism is necessary. Sixty-seven years after Indian and Chinese troops clashed at Khurnak in Ladakh, the two countries are nowhere close to resolving the border dispute. The claims and counterclaims are so divergent that any hope for a quick resolution is highly unlikely. What is now considered a ‘big achievement’ is the stabilisation of the border situation and not the actual resolution of the dispute that has poisoned relations between the two Asian giants.
Wang’s visit, which builds on another set of military and diplomatic agreements in 2024, follows the meeting between Prime Minister Narendra Modi and China’s President Xi Jinping in Kazan, Russia, later last year. Now, the two countries have set in motion a number of “working groups” under the Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC). Modi will be travelling to Tianjin, China, later this month for the Shanghai Cooperation Organisation (SCO) summit where he will meet Xi.
It should be remembered that on paper India and China have multiple agreements and mechanisms to ensure that the border conflict does not flare up into open hostility at the military level. Some of these go back to 1988 when the Joint Working Group (JWG) on the Boundary Issue was created. To no avail and by 2020, China had violated all the agreements and trust between India and China evaporated.
The US’ original motivation for building a ‘strategic partnership’ with India was based on ‘propping up’ India as a counterweight to China. But at no point did India let this turn into a military alliance against China
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If one doesn’t lose sight of this difficult and sometimes inexplicable history of events, any improvement in the border situation should be welcomed. That will allow India to focus on more pressing issues elsewhere, for example, on the near-destruction of its relationship with the US.
Many commentators tend to link the two sets of bilateral relations and view them jointly. This is especially so given the current situation. That is too tactical a reading of the situation. Although one has to admit, many strategists view it from that perspective. The US’ original motivation for building a “strategic partnership” with India was based on ‘propping up’ India as a counterweight to China. But at no point did India let this turn into a military alliance against China. American frustration with the Quad and BRICS is symptomatic of its approach towards international relations. It is another matter that its attempts—especially under Donald Trump—to arrive at a deal with China, the contours of which remain opaque, has undermined Quad severely. Its spat with India is likely to render the group comatose. American efforts at creating a military alliance against China in Asia— the AUKUS group—are also going nowhere. The US does not share crucial defence technology even with its closest partners and is a wholly unreliable power.
India’s relations with China have a different focus. China remains an important partner for economic development. The gigantic trade surplus that China enjoys and its continuing military engagements at the borders forced India to rethink its approach to China. With the border situation being stabilised, for now, perhaps the time has come to focus on the economic axis of the relationship. India could do well with a large dose of Chinese Foreign Direct Investment (FDI) as well as trade in key commodities, such as fertilisers and rare earth.
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