Border Peace, Strategic Unease: Mapping the India-China Reset

By IndraStra Global Editorial Team

Cover Image Attribute: Indian Union External Affairs Minister S Jaishankar during a meeting with the Chinese Vice President Han Zheng, in Beijing, China. Date: July 14, 2025 / Source: @DrSJaishankar on X via PTI Photo

On July 14, 2025, India’s External Affairs Minister S. Jaishankar sat down with Chinese Vice President Han Zheng in Beijing, his first trip to China since the tragic border clashes of 2020. Jaishankar shared a sense of hope, noting that ties between the two nations have been “steadily warming” since Prime Minister Narendra Modi and Chinese President Xi Jinping held talks in Kazan in October 2024. “Our relationship has been on an upward path since the Kazan meeting between Prime Minister Modi and President Xi,” Jaishankar said, his optimism clear as he expressed confidence that ongoing discussions would keep this “positive momentum” alive. Han Zheng mirrored this sentiment, urging that “China and India should move forward together with practical steps,” stressing mutual respect and care as the cornerstone for progress. Their meeting, held during the Shanghai Cooperation Organisation (SCO) Foreign Ministers’ gathering in Tianjin, showed a shared desire to mend ties, especially after resolving tensions along the Line of Actual Control (LAC).

Still, this optimism is tempered by the memory of the 2020 Galwan Valley clash, a violent turning point that plunged bilateral ties into crisis and triggered a prolonged military standoff. The clash, which claimed the lives of at least 20 Indian and four Chinese soldiers, had cast a dark shadow over India-China relations, pushing them to their lowest point since the 1962 war. The clash, sparked along the poorly defined 3,800 km border, led to a tense military standoff in eastern Ladakh. Since then, both sides have worked hard to ease tensions, with a major breakthrough in October 2024 when troops pulled back from lingering friction points at Demchok and Depsang. In his talks with Chinese Foreign Minister Wang Yi on July 14, 2025, Jaishankar acknowledged “real progress” in mending ties over the past nine months, thanks to the “resolution of border tensions.” He stressed the need to tackle remaining border issues, saying, “We must now focus on other border matters, including de-escalation.” Wang Yi shared this view, expressing China’s readiness to “work with India to keep our relationship on a steady, healthy path,” calling for a “forward-thinking approach” to their ties.

As diplomatic efforts translate into confidence-building measures, both sides are signaling readiness to rebuild trust not only through military disengagement, but also by reopening key cultural and people-to-people links. One heartwarming outcome of these efforts is the restart of the Kailash Mansarovar Yatra, a pilgrimage cherished by millions of Indians. “The return of the Kailash Mansarovar Yatra has touched many hearts in India,” Jaishankar told Han Zheng. Set to resume in June 2025 after a five-year pause, this move feels like a bridge of trust being rebuilt. For countless Indians, this pilgrimage is more than a spiritual journey—it’s a cultural bond, and its return carries deep emotional meaning, signaling a thaw in relations.

Yet, challenges linger beneath the surface. The question of the Dalai Lama’s succession remains a sore spot. On July 13, 2025, the Chinese embassy in New Delhi called it a “thorn” in India-China relations, insisting it’s an “internal matter for China.” Spokesperson Yu Jing sharply criticized Indian analysts and a government minister for backing the Dalai Lama’s stance on his succession. “Those in foreign affairs should understand the sensitivity of Xizang issues,” Yu said, referring to Tibet by its Chinese name. China insists its leaders must approve the Dalai Lama’s successor, while Tibetans hold that their spiritual leader’s soul reincarnates freely, beyond state control. The Dalai Lama, exiled in India since 1959, gives India influence but also stirs tension, as China sees India’s support for him as a challenge to its claim over Tibet. “Xizang issues weigh heavily on India-China relations and burden India,” Yu warned, adding that “playing the Xizang card will backfire.”

Economic ties add another layer of complexity. India’s trade deficit with China hit $99.2 billion in 2024, fueled by soaring imports and shrinking exports. Jaishankar, speaking with Wang Yi, urged avoiding “trade barriers” to ensure cooperation benefits both sides. “We must steer clear of restrictive trade measures to build a partnership that works for both,” he said. This is especially critical for India’s electric vehicle (EV) and renewable energy goals, which rely on Chinese-dominated supplies of critical minerals and rare earths. India is racing to reduce this dependence by boosting domestic resources and finding new suppliers. Global trade shifts, like U.S. tariffs under President Donald Trump, have pushed India to secure its place in global value chains (GVCs). But China’s lead in high-tech manufacturing and mineral supply chains creates a quiet yet fierce economic rivalry.

Geopolitically, India has long been wary of China’s growing clout in South Asia, often viewed as “debt diplomacy.” China’s loans to Bangladesh and Pakistan, through projects like the $62 billion China-Pakistan Economic Corridor (CPEC), have raised concerns in New Delhi. In Bangladesh, Chinese funding has increasingly focused on defense and connectivity, deepening ties that unsettle India. Pakistan, India’s long-time rival, benefits from Chinese investments in ports, highways, and energy infrastructure. Reports also point to an emerging anti-India axis involving China, Pakistan, and Turkey. India’s Army Deputy Chief, Lieutenant General Rakesh Kapoor, revealed that China shared “live data on Indian assets” with Pakistan, while Turkey supplied drones during a covert Indian operation called “Operation Sindoor,” aimed at countering terrorist attacks. This intelligence-sharing has further deepened India’s distrust of China’s regional moves.

China’s delicate balancing act between India and Pakistan complicates matters further. Both are SCO members, and China has voiced support for peace talks between them. “We welcome the ongoing India-Pakistan peace talks and are committed to regional stability,” Yu Jing said on July 8, 2025. But India remains cautious, suspecting China’s mediation may serve its own interests, especially in countering U.S. influence. The SCO offers a stage for dialogue, but it also pits India and China in a careful dance of cooperation and rivalry, as both seek sway in the Global South.

The broader global context, including U.S. tariffs and the BRICS coalition, shapes India-China ties. Trump’s 30-35% tariffs on Canada, Mexico, and possibly Brazil worry India, a BRICS member. Bloomberg notes India and the U.S. are working on a deal to lower tariffs on Indian goods below 20%, showing India’s efforts to navigate a changing trade landscape. Meanwhile, China’s Xi Jinping, on July 7, 2025, called for BRICS unity, urging a “partnership between India and China for shared success” and a “dragon-elephant tango” to align their goals. The portrayal of two global powers moving in tandem reflects hopes for harmony, yet highlights the struggle to reconcile conflicting national agendas.

The latest meetings in Beijing show that both nations understand a strong, steady relationship isn’t just good for them—it’s good for the world. Jaishankar emphasized mutual respect, while Wang Yi noted the need to tread carefully around sensitive issues. For ordinary people, this matters: in India, the trade gap with China affects jobs—especially in manufacturing—and border tensions along the LAC disrupt life for locals dealing with military patrols and restricted access. Though the return of the Kailash Mansarovar Yatra is a positive development, the Dalai Lama’s presence and questions around his succession continue to significantly impact India-China relations. Despite these tensions, people in China view India’s rise with a mix of awe and caution, recognizing both business opportunities and strategic concerns. As 2025 marks 75 years of diplomatic ties, unresolved issues—such as economic imbalances and China’s relations with Pakistan and Bangladesh—serve as reminders that real trust between these two ancient neighbors will take time and effort to build.

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