India's China Policy: Strategic Framework and Challenges

As India and China commemorate 75 years of diplomatic relations, they find themselves navigating a complex geopolitical landscape marked by contested borders, strategic rivalries, and deep-seated mistrust, while simultaneously recognizing areas for cooperation and shared responsibility in regional stability.

Key Influences and Historical Context

• China is a significant external factor influencing India's foreign policy, with nearly every strategic decision being filtered through a "China lens."
• The 1962 war and the 2020 Galwan Valley clash are pivotal events that have shaped India's approach towards China, emphasizing the need for balancing deterrence with dialogue and economic interdependence with sovereignty.

Current Military and Economic Dynamics

• The Line of Actual Control (LAC) remains highly militarized, with over 60,000 troops permanently deployed in Eastern Ladakh.
• India's trade imbalance with China reached approximately $100 billion in 2024-25, highlighting economic interdependence despite efforts to restrict Chinese investments and ban apps.
• India adopts a strategy of "competitive coexistence," attempting to compete with China in defense and regional influence while maintaining economic engagement.

Regional Strategy and Influence

• China's growing influence in South Asia challenges India's traditional regional dominance, prompting India to engage in proactive, long-term strategies beyond reactive diplomacy.
• Influence is increasingly about narrative control, as demonstrated by diplomatic exchanges such as those involving Bangladesh's interim leader in Beijing.

Global Geopolitical Context

• With the return of Donald Trump to the White House, India faces potential pressure to align more closely with the U.S. amidst heightened U.S.-China rivalry, while maintaining strategic autonomy as a core principle.
• Prime Minister Narendra Modi's recent remarks emphasize dialogue and "healthy competition," signaling a nuanced approach to U.S. and China relations.

Recent Diplomatic Developments

• There have been positive diplomatic signals such as the resumption of verification patrolling along the LAC and discussions on hydrological data-sharing and other bilateral engagements.
• Despite symbolic gestures of rapprochement, significant risks remain, such as those related to China's dam on the Yarlung Tsangpo (Brahmaputra) and the lack of a water-sharing treaty.

Strategic Recommendations

• India's China policy should rest on four pillars: military readiness, economic diversification, diplomatic engagement, and narrative control.
• Strategic communication, timely project execution, and a long-term foreign policy perspective are crucial.
• The "three mutuals" — respect, sensitivity, and interest — should guide India's path forward, aiming for a model of "competitive coexistence."

As India seeks to define its role in a world characterized by flux and shifting alliances, China serves as both a structural challenge and a mirror, reflecting India's capabilities and ambitions.