7 Drivers of Indo-Chinese Rapprochement
Introduction
The recent rapprochement between India and China focused on reducing tensions by mutually withdrawing troops to their June 2020 positions and initiating joint patrolling along the disputed border, marks a significant diplomatic milestone for two of Asia’s major powers. Regional stability in South Asia is critical for the economic growth of its developing economies, which depend on peaceful conditions to promote trade. Rising tensions between Pakistan and India, as well as the instability in Afghanistan, have added to regional volatility. Both India and China recognize that a stable South Asia is in their mutual interest, providing a foundation for economic cooperation, trade, and diplomatic stability that can benefit the entire region.
Historical Background of the Indo-Chinese Border Dispute
The roots of the Indo-Chinese border dispute lie in early 20th-century colonial decisions. In 1914, the British administration in India sought to demarcate its northern boundary through the McMahon Line as part of the Simla Convention with Tibet, intending it to be the boundary between British India and Tibet. However, the Chinese government, which claimed Tibet as its territory, did not recognize the McMahon Line, laying the foundation for future disputes.
Following Indian independence in 1947 and the establishment of the People’s Republic of China in 1949, the unresolved boundary emerged as a contentious issue. India asserted the McMahon Line as its eastern boundary, while China claimed Aksai Chin in the west as part of its territory. This dispute simmered until it escalated into open conflict in the early 1960s.
The 1962 War and India’s Forward Policy
Tensions reached a peak in 1962 when India adopted a “Forward Policy,” establishing military outposts in contested areas to reinforce its territorial claims. China perceived these actions as aggressive, prompting it to launch a military campaign that swiftly led to significant Indian territorial losses in the Aksai Chin region. This defeat left a lasting impact on India’s strategic approach to China and fostered mutual distrust that lingered for decades, with occasional skirmishes and standoffs along the Line of Actual Control (LAC).
The 2020 Border Crisis and Its Fallout
In June 2020, violent clashes erupted in the Galwan Valley, resulting in casualties on both sides. India accused China of crossing the LAC, while China claimed that India’s infrastructure development was a provocation. In response, India imposed strict economic measures, including restricting Chinese investments, halting flights, and strengthening defence along the border. This crisis also pushed India to deepen its alignment with the United States, particularly through the Quadrilateral Security Dialogue (Quad), which includes Japan and Australia and is seen as part of a broader Indo-Pacific strategy aimed at containing China.
However, this close alignment with the U.S. heightened concerns in Beijing and added strain to Indo-Chinese relations. Recognizing the risks of prolonged confrontation, both countries have recently signalled a willingness to return to dialogue and de-escalate tensions.
Seven Key Drivers of the Recent Indo-Chinese Rapprochement
Some of the key drivers of this recent Indo-Chima rapprochement are
1. China’s Good Neighbourly Policy and Focus on Its Global Initiatives
China’s “Good Neighbourly Policy” has become a central component of its foreign policy, aimed at resolving border disputes peacefully with neighbouring countries. This approach has allowed China to establish stable relationships along most of its borders, creating a secure environment for its major global initiatives, such as the Belt and Road Initiative (BRI), Global Development Initiative (GDI), and Global Security Initiative (GSI). For example, in the 1960s, China ceded the Shaksgam Valley in disputed Jammu and Kashmir to Pakistan, prioritizing strategic ties over territorial claims, thus solidifying an important regional alliance.
Similarly, China reached agreements with Russia, Central Asian countries, Vietnam, and Mongolia, often foregoing significant territorial claims to foster long-term cooperation and trust. These efforts have not only reduced the likelihood of conflict but have also allowed China to focus on economic and infrastructure partnerships crucial to its vision of global influence.
The policy of resolving border disputes has directly supported China’s large-scale projects like the BRI, which aims to build trade corridors linking Asia, Africa, and Europe. Without border tensions, China can freely engage neighbouring countries in these projects, securing trade routes and deepening economic partnerships. Additionally, a stable regional environment supports the Global Development Initiative by allowing China to invest in developmental projects in low- and middle-income countries, thereby expanding its influence and goodwill.
Likewise, the Global Security Initiative promotes multilateral security frameworks and peaceful conflict resolution, and China’s peaceful border agreements exemplify this commitment. Collectively, these initiatives and diplomatic efforts project China as a cooperative global power focused on stability, development, and security, allowing it to reduce military commitments at its borders and concentrate on strategic global objectives.
2. Counteracting US-Led Containment Efforts: China’s Strategic Need for Indian Neutrality
In recent years, the United States has intensified its efforts to counterbalance China’s growing influence by establishing alliances and partnerships throughout the Indo-Pacific region. This “containment strategy” aims to curb China’s military expansion, economic reach, and strategic dominance across Asia, particularly in maritime regions critical to trade routes and energy supplies. The U.S. has actively supported the “Quad” alliance — comprising the United States, India, Japan, and Australia — as a central component of its Indo-Pacific strategy.
The Quad has been conducting joint military exercises, expanding diplomatic engagements, and deepening cooperation on issues such as supply chain resilience and technological security, all with an implicit goal of checking Chinese influence. Additionally, the U.S. has strengthened partnerships with countries in Southeast Asia, reinforced its alliances with South Korea and Japan, and expanded its military presence through initiatives like the AUKUS pact with Australia and the United Kingdom, which involves sharing nuclear submarine technology with Australia. Through this extensive network of alliances and strategic agreements, the U.S. has effectively created a ring of containment around China, aiming to restrict its manoeuvrability in the region and limit its global ambitions.
India is critical to the U.S.-led containment strategy due to its strategic location, massive population, and growing technological and military capabilities. India’s proximity to China and its influence in the Indian Ocean region make it a powerful counterweight to China’s activities in the region, giving the U.S. a potentially pivotal ally in the event of a regional standoff with China. Furthermore, India shares border disputes with China, creating a natural basis for U.S.-India cooperation on security matters. India’s importance is further underscored by its rapidly growing economy and robust technological sector, which position it as a valuable partner in counteracting China’s technological advancements.
The U.S. has supported India’s rise as a counterbalance to China by expanding defence cooperation, facilitating access to cutting-edge technologies, and endorsing India’s active role in regional organizations like ASEAN. However, China is keenly aware that if it pushes India too far into the U.S. sphere, it could lose a significant regional counterbalance, potentially enabling the U.S. to build a powerful coalition in Asia. By stabilizing its relationship with India, China aims to ensure that India retains its strategic autonomy, preventing it from fully aligning with the U.S. containment strategy and maintaining a balance of power in Asia that favours multipolarity over bloc politics.
3. Economic Interests and the Potential of the Indian Market: A Strategic Imperative for China
India’s enormous and rapidly expanding market represents a significant economic opportunity for China, especially as it seeks to maintain growth and navigate economic challenges. With a population of over 1.4 billion, a growing middle class, and a fast-developing technology sector, India offers substantial demand for goods, infrastructure projects, and technology services — sectors in which Chinese companies excel. Before the 2020 border clashes, Chinese firms were deeply embedded in the Indian economy, with major technology giants like Xiaomi, Huawei, and Alibaba enjoying significant market shares in consumer electronics, telecommunications, and digital services. Additionally, Chinese investments supported India’s infrastructure growth, with major players in sectors like construction, energy, and logistics.
However, after the Galwan Valley clash in 2020, India imposed stringent restrictions on Chinese investments, halted several projects, and banned numerous Chinese apps, directly impacting China’s foothold in this vital market. These restrictions have limited China’s access to what was becoming one of its most profitable overseas markets, stalling investments and reducing opportunities for expansion in a country with vast consumer potential.
For China, the normalization of relations with India is not just a matter of diplomacy but an economic necessity. China’s economy, still recovering from the impacts of COVID-19 and facing headwinds from a global slowdown, sees Indian economic engagement as essential to its strategy for sustained growth. A resumption of stable economic ties with India would open the doors for Chinese firms to regain market share, push forward delayed projects, and foster cooperation in technology and infrastructure.
Additionally, Indian demand could provide a much-needed boost to Chinese manufacturing and tech sectors facing sluggish growth elsewhere. Beyond immediate financial gains, economic interdependence with India could serve as a buffer against growing anti-China sentiment in the West. By fostering strong economic ties with India, China could also indirectly counterbalance the United States’ influence, as a mutually beneficial economic relationship could dissuade India from aligning entirely with U.S.-led containment efforts.
Consequently, China is increasingly eager to revive and strengthen its economic engagement with India, as losing access to this vast market could have long-term repercussions on its global economic ambitions.
4. India’s Aspiration for Strategic Autonomy: A Balancing Act in Global Affairs
India is striving to establish itself as a rising global power by adopting an independent stance on major international issues, emphasizing strategic autonomy as a cornerstone of its foreign policy. This approach is evident in India’s response to the Russia-Ukraine conflict, where it has refrained from taking sides despite considerable Western pressure to condemn Russia. Instead, India has focused on advocating for dialogue and peace, while maintaining its longstanding defence and energy ties with Russia, which remain crucial for its national security.
India’s neutrality has not only preserved its strategic relationship with Russia but has also allowed it to leverage its position as a mediator, signalling its growing role as a key diplomatic player. This pragmatic approach to foreign policy underscores India’s commitment to non-alignment and to shaping a distinct identity on the world stage, independent of superpower pressures. By positioning itself as “with everyone but aligned with none,” India is asserting that it has its own national interests and policy priorities, reinforcing its image as a sovereign power that can stand on equal footing with other global giants.
This approach extends to other complex geopolitical issues, such as the tensions in the Middle East, where India has built strong relationships with countries on both sides of regional conflicts. For instance, India has strengthened ties with Israel for defence and technological cooperation, while also maintaining a deep partnership with countries in the Gulf, which are essential for its energy security and economic investments. This balanced approach allows India to avoid entanglement in regional conflicts and project itself as a stabilizing force, capable of maintaining positive relations across diverse, sometimes opposing, factions.
The pursuit of strategic autonomy has become central to India’s bid to emerge as a global power, showing its ability to chart an independent course even amidst pressures from superpowers like the United States and China. Stabilizing relations with China further supports India’s goal of strategic autonomy, as it allows India to avoid alignment in an anti-China bloc, reinforcing its non-aligned stance and bolstering its image as a self-sufficient power capable of independent global leadership.
5. Russia’s Desire to Regain Global Influence and Maintain a Stronghold in South Asia
Under President Vladimir Putin, Russia has pursued a strategy to reclaim the global power and prestige it held during the Soviet era, aiming to reassert its influence across various strategic regions, including South Asia. India, as a long-time ally of Russia, has historically been central to Moscow’s sphere of influence in the region, with ties that date back to the Cold War when the Soviet Union supported India militarily, diplomatically, and economically. Russia has continued this legacy, providing India with advanced military equipment, nuclear technology, and diplomatic support, making India one of its most important partners outside of the post-Soviet sphere.
For Moscow, retaining influence in India is essential not only for its standing in Asia but also for its broader global strategy. Russia sees India as a counterweight to Western influence, particularly to the United States, which has sought to expand its alliances in Asia as part of its Indo-Pacific strategy. Losing its influence over India would weaken Russia’s role in the region, erode its strategic depth, and challenge its ambition to be a global power broker.
In light of India’s growing alignment with the United States, Russia has taken steps to support a more balanced approach that includes fostering better ties between India and China. Russia views the Indo-Chinese rapprochement as a strategic necessity to reduce U.S. influence in South Asia and prevent India from becoming fully aligned with Western interests. By encouraging regional stability and dialogue between India and China, Russia hopes to curb Washington’s ability to rally India against its closest ally, China, while also ensuring that India maintains a degree of independence in its foreign policy.
Moscow’s active engagement in facilitating Indo-Chinese cooperation signals its desire to shape a multipolar world order in which it, alongside India and China, can counterbalance U.S. hegemony. In doing so, Russia aims to keep South Asia as a cooperative, non-aligned region where it can continue to wield considerable influence, reinforcing its global stature as a power capable of shaping geopolitical dynamics across multiple continents.
6. Indian Businesses’ Desire to Resume Trade and Investment Relations with China
Indian businesses, particularly in sectors such as technology, pharmaceuticals, and telecommunications, recognize China’s crucial role in their supply chains and are keen to revive trade relations that have suffered due to recent political tensions. Despite border disputes, China has long been a primary supplier of affordable goods, components, and raw materials for Indian industries. For instance, the pharmaceutical sector in India, one of the largest in the world, relies heavily on Active Pharmaceutical Ingredients (APIs) from China to produce medicines at competitive prices.
Similarly, India’s electronics and telecommunications industries depend on Chinese components to meet the high demand for consumer goods in the domestic market. The abrupt halt of Chinese imports following the 2020 border clash disrupted these supply chains, raising production costs and threatening the competitiveness of Indian businesses. For these industries, economic pragmatism outweighs political considerations, driving a strong desire for rapprochement with China to ensure continued access to cost-effective resources and stabilize operations.
Moreover, Indian businesses view China not only as a supplier but also as a valuable export market with immense purchasing power. As India’s economy continues to grow, companies in consumer goods, software, and manufacturing sectors see China as a lucrative destination for expansion. Trade restrictions imposed after the border skirmishes limited these opportunities, creating a sense of urgency among Indian businesses to restore economic ties.
Business leaders recognize that prolonged disruption in trade with China could push their Chinese counterparts to seek other regional partners, potentially leading to the permanent loss of market share and strategic partnerships. Thus, for Indian businesses, resuming stable trade and investment relations with China is essential for maintaining growth, market access, and competitiveness. This desire for economic cooperation aligns with India’s larger diplomatic efforts to stabilize relations with China, as the business community advocates for a practical approach that separates economic interests from political tensions.
7. India’s Desire to Join the Nuclear Suppliers Group (NSG): A Strategic Priority for Global Standing
India has long aspired to become a member of the Nuclear Suppliers Group (NSG), an elite international body that regulates nuclear exports and plays a key role in controlling nuclear proliferation. NSG membership would grant India access to advanced nuclear technology, materials, and international collaboration that could enhance its civil nuclear energy program. Such access is particularly important as India seeks to diversify its energy sources to meet the needs of its growing population and rapidly expanding economy.
Beyond energy security, NSG membership would also mark a major diplomatic victory, strengthening India’s position as a responsible nuclear power and reinforcing its standing on the global stage. Given its considerable investment in non-military nuclear applications, joining the NSG aligns with India’s broader goal of gaining legitimacy and support for its nuclear program. Despite support from other major players like the United States, India’s membership bid has been consistently blocked by China, which cites India’s non-signatory status to the Nuclear Non-Proliferation Treaty (NPT) as grounds for objection.
China’s opposition to India’s NSG membership has also been partly rooted in regional balance, with China insisting that if India is admitted, Pakistan should be given similar consideration. This stance complicates India’s aspirations, as it faces a geopolitical hurdle that extends beyond non-proliferation principles into the realm of strategic rivalry. A potential rapprochement with China could present India with an opportunity to negotiate and potentially alleviate Chinese opposition, either by addressing China’s concerns or by seeking a middle ground in diplomatic terms.
A breakthrough on the NSG issue would not only benefit India’s nuclear ambitions but would also signify a major improvement in Sino-Indian relations. Even a reduction in Chinese resistance could allow India to advance its case for membership and strengthen its global image as a major player in nuclear governance. For India, the NSG membership remains a symbol of its rise as a responsible and independent global power, making it a crucial element in its broader foreign policy goals.
Conclusion
The Indo-Chinese rapprochement reflects a pragmatic acknowledgment by both countries of the benefits of stability over confrontation. While historical grievances and strategic competition continue to shape their relationship, both India and China recognize that prolonged conflict is costly and counterproductive. For China, stability along its borders aligns with its “Good Neighborly Policy” and supports its ambitious international initiatives. For India, rebalancing its foreign policy and regaining economic ties with China help maintain its strategic autonomy and foster economic growth.
The factors driving rapprochement are diverse, encompassing economic interests, regional stability, global strategic ambitions, and diplomatic concessions. This de-escalation effort illustrates the complex interplay of historical legacies, strategic needs, and economic pragmatism in shaping contemporary international relations. If both nations continue to prioritize diplomacy, they stand to benefit not only from reduced tensions but also from new opportunities for cooperation in trade, security, and multilateral engagement.