Ahead of last month’s BRICS summit, observers were speculating that a meeting on its sidelines between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping could chart a path forward for the neighboring nations’ ties.
This followed the two nations inking a pact on military disengagement along their disputed border, with the Indian foreign secretary saying it opened the “pathway to more normal ties.” A key reason for the de-escalation, per observers, was an enabling geopolitical environment; Beijing is currently facing strategic and economic pressure from the U.S., while India wishes to avoid another border escalation that risks its economic progress.
The steps toward a tentative peace followed years of animosity. India accused China of violating previous bilateral agreements regarding their disputed border. Its hardline stance was supported by a lack of consensus on the ideal extent of economic ties with China, though some experts believe an improvement in bilateral relations would prove beneficial for Indian labor, manufacturing, and exports. Delhi is also keen to take a page from China’s playbook, linking any Chinese investment to joint ventures with a local company, i.e. take its expertise and components and then eventually take its markets.
Working to resolve their differences through economic ties would be a return to form for India and China. Between 2008 and 2021, Beijing was Delhi’s largest trading partner. The two countries were also expanding their strategic and military relations. However, conflict of interest led to hostility, with India lamenting over the large trade deficit favoring China. India also remains wary of China’s strong strategic ties with Pakistan, while China has expressed concerns about Indian military and economic activities in the disputed South China Sea, as well as its hosting of anti-China activity from Tibetan exiles. Regardless of how the latest issues pan out, South Asia today is in the midst of an intensified power-play between two emerging powers: China and India.