India’s competitive coexistence with China

If China’s President Xi Jinping travels to New Delhi for the BRICS Summit next month (Opens in new window), it will mark his first visit to India since 2019 and his first since the Galwan Valley clash fundamentally transformed bilateral relations. Reports suggest that it will be the next step of diplomatic engagement, following Prime Minister Narendra Modi’s visit to China (Opens in new window) for the Shanghai Cooperation Organisation summit last year, External Affairs Minister S. Jaishankar’s meeting with his Chinese counterpart Wang Yi in Manila (Opens in new window) recently, where both sides welcomed the gradual normalisation of practical exchanges, and Foreign Secretary Vikram Misri’s visit to Beijing (Opens in new window) last week.

These developments have fuelled speculation that Asia’s two largest powers are not only moving towards a diplomatic reset but are also entering a fundamentally new phase (Opens in new window) in their relationship. A better reading is that India is not seeking to restore its pre-Galwan relationship with China, but it is trying to build a framework for managing a rivalry it sees as permanent.

For nearly three decades after the 1993 Agreement (Opens in new window) on the Maintenance of Peace and Tranquility along the Line of Actual Control, India and China operated under an implicit bargain. Their boundary dispute remained unresolved, but both governments sought to prevent it from disrupting cooperation elsewhere.

The Galwan clash of 2020 fundamentally altered (Opens in new window) how Indian policymakers viewed China. It made it far harder to sustain the long-standing practice of managing the boundary dispute while expanding cooperation elsewhere.

Chinese investment came under greater scrutiny, India’s cooperation with the Quad intensified (Opens in new window), and its Indo-Pacific strategy grew more security-focused. None of these factors have changed (Opens in new window) in the last couple of years. India has not reduced its concerns about China’s expanding maritime presence or reversed efforts to diversify supply chains and strengthen domestic manufacturing. The lessons of Galwan remain firmly embedded in Indian policy.

So why the apparent thaw? Because New Delhi appears to have concluded that there is a difference between normalising engagement and normalising relations. Restoring diplomatic dialogue and practical cooperation does not require restoring trust. India appears to be embracing a form of competitive coexistence, accepting China as a long-term rival while maintaining enough engagement to prevent competition from hardening into perpetual confrontation.

India’s external environment has also become more uncertain. Trade frictions with Washington (Opens in new window), including the latest tariff measures and renewed disagreements over economic policy, have reminded New Delhi that partnerships do not eliminate divergent interests.

Recent diplomacy suggests that India’s China policy is entering a more nuanced phase. During his meeting with Chinese Foreign Minister Wang Yi in Manila, Jaishankar discussed restoring practical cooperation, including greater supply-chain predictability and the resumption of institutional mechanisms. But he also reiterated (Opens in new window) that “peace and tranquillity in the border areas is obviously the prerequisite for normal ties”. This contrast sums up India’s emerging strategy of expanding engagement without restoring trust.

China has signalled a willingness to stabilise bilateral ties ahead of the BRICS summit. It is already visible in a series of practical confidence-building measures, including the resumption of border trade (Opens in new window) through Nathu La, Lipulekh and Shipki La, alongside discussions on direct flights, visas, and institutional exchanges.

China views BRICS as a vehicle for expanding its influence (Opens in new window) within global governance, whereas India supports a more representative international order, remaining committed to its autonomy. So, if Xi arrives in New Delhi, the most important signal will not be that India and China have reconciled. It will be that New Delhi has accepted a more durable reality: China is a rival that cannot be ignored, isolated or transformed. For India, it is recognition that a fragmented international environment requires keeping multiple diplomatic options open. As BRICS chair (Opens in new window) this year, New Delhi has an added incentive to ensure that competition with Beijing does not derail multilateral cooperation.

China remains India’s largest neighbour, a major trading partner (Opens in new window) and an indispensable actor in every major question shaping Asia’s future. Climate change, regional stability, and multilateral institutions all require engagement with Beijing (Opens in new window). If that is true, then engagement cannot wait for a comprehensive political settlement. It has to occur despite the absence of one. This amounts to a strategy of managed rivalry. India will continue to strengthen deterrence along the border and to restore selected channels of diplomatic engagement.

India’s objective is not to choose between engagement and balancing, or between cooperation and confrontation. It is to preserve the flexibility to do all of these as circumstances require. In that regard, many will interpret India’s renewed engagement with China as another example of hedging between Washington and Beijing. That misses the point. If India is hedging, it is hedging against uncertainty about China’s future behaviour rather than against competition between great powers.