India rekindling ties with China amid US trade tensions Rapprochement or realpolitik?

In a striking shift in South Asian geopolitics, India is cautiously recalibrating its relationship with China amid rising tensions with the United States, underscoring the complex balancing act New Delhi must perform between two global superpowers. A recent Foreign Policy article captures this nuanced dynamic, revealing that India’s recent outreach to Beijing is less about strategic weakness and more about pragmatic adaptation to evolving economic and geopolitical realities.

The backdrop to this diplomatic pivot is a fraught triangular relationship among the U.S., China, and India. On July 30, U.S. President Donald Trump announced a 25 percent tariff on Indian imports, escalating a trade dispute that coincides with India’s renewed efforts to thaw relations with China. While Washington’s policies under Trump have at times signaled a tilt closer to Beijing, India has responded by seeking economic benefits from China without compromising its core security interests.

Since the 2020 violent border clashes in Galwan and a subsequent military standoff, India’s economic and diplomatic ties with China froze sharply. India retaliated with bans on over 300 Chinese apps, blocked Chinese telecom firms from participating in 5G rollout, and imposed stringent investment restrictions on companies from bordering countries, primarily targeting China. Yet by October 2024, the two nations took tentative steps to de-escalate tensions during the BRICS summit, resulting in restored patrol rights along contested border areas, renewed pilgrimages, and the gradual resumption of people-to-people and civil exchanges.

India’s domestic economic concerns have been a significant driver behind this rapprochement. Indian corporations, especially in electronics manufacturing, have faced considerable losses due to restrictive policies on Chinese suppliers. The Finance Minister and the economic think tank NITI Aayog have voiced support for easing capital restrictions and allowing Chinese investment stakes up to 24 percent in Indian firms. This pragmatic approach acknowledges China’s dominant role in global electronics manufacturing and the practical challenges India faces in fully substituting Chinese supply chains.

Beyond economics, New Delhi’s strategic calculus reflects concerns about shifting U.S. policies, especially Washington’s growing engagement with Pakistan and apparent warming toward China. The Trump administration’s hosting of Pakistan’s military chief and the awarding of honors to U.S. Central Command’s head signal a nuanced U.S. approach to South Asia, possibly aimed at peeling Islamabad away from Beijing’s orbit. Indian strategists see their own engagement with China as a way to hedge risks associated with these evolving alliances and exploit fissures in the China-Pakistan partnership.

Moreover, there is growing Indian apprehension that the U.S. might be softening its stance on China. The approval of high-tech chip sales to Beijing and a tariff truce after multiple negotiation rounds illustrate a potential U.S. accommodation with China, despite past efforts to contain its technological and military rise. Incidents such as the White House denying Taiwanese President Lai Ching-te a stopover in New York, reportedly due to Beijing’s objections, add to fears of a strategic shift by Washington.

Nevertheless, India’s rapprochement with China remains firmly circumscribed by security imperatives. New Delhi has publicly resisted joint statements from the Shanghai Cooperation Organisation (SCO) that sideline terrorism concerns, maintains a robust military posture along the border, and has conducted major counterterrorism operations against Pakistan-based militants. This dual-track approach—economic engagement coupled with uncompromising defense—reflects India’s determination to safeguard its core interests while adapting to geopolitical complexities.

By Vugar Khalilov