Strategic Forecast India China Relations – September 2025
- rkbhonsle
- Aug 23, 2025
- 10 min read
Updated: Aug 24, 2025
To sustain the positive momentum generated by measures agreed upon during Wang Yi visit, multiple adverse vectors and some fundamentals need to be reset, requiring hard political decisions.
India and China are seeing a new phase in relations with exchange of ministerial visits, attempts for expanding people-to-people relations through reinstatement of tourist visas and improving climate for investments by Chinese companies. China has assured easing export controls on critical elements including fertilisers.
A decision to undertake first of the 3 Ds to resolve the boundary dispute – delimitation in the Eastern Sector has been taken.
Prime Minister Modi is now expected to visit Tianjin, China, for the Shanghai Cooperation Organisation (SCO) summit from August 31 to September 1 and there is a possibility of a bilateral summit with President Xi Jinping.
This comes as Mr Wang Yi, Member of the Politburo of the Communist Party and Foreign Minister of China has received the top billing having met Prime Minister Narendra Modi and held bilateral discussions with Foreign Minister Dr S Jaishanker and the National Security Advisor Ajit Doval on full spectrum of issues including the Special Representatives [SR] talks with the latter.
Here is a comprehensive discussion of the drivers that can generate positive momentum in India China relations in the short to medium term-
High Level Summit. Breakthroughs in India China relations as is a general norm occur in high level summits. The present reset of ties was result of a summit between Prime Minister Narendra Modi and President Xi Jinping in October last year at Kazan, Russia. Now the two are set to meet in Taijun China as the Indian Ministry of External Affairs announced in a Press Release stating, “at the invitation of the President of China, H.E. Xi Jinping, Prime Minister will travel to China from 31 August to 1 September 2025 to attend the Shanghai Cooperation Organisation (SCO) Summit in Tianjin. On the sidelines of the Summit, Prime Minister is expected to hold bilateral meetings with several leaders attending the Summit,” the most important would be that with the Chinese President. What emerges thereof thus remains to be seen. One low hanging marker will be whether there is a joint statement or both sides issue a separate one post the Summit.
Geopolitical Developments. A sudden cleft in India US relations due to exceptional tariffs including penalty by President Donald Trump on India which are expected to kick in on August 27th is possibly the geopolitical development that baiters of India US relations were awaiting. Manoj Kewalramani, head of Indo-Pacific studies at the Takshashila Institution in Bangalore, India has commented that, “A breakdown of political trust between New Delhi and Washington works in Beijing’s favor.”
China has been irked with issues such as the Quad, which brings together four democracies — India, the United States, Japan and Australia — to counter its rise. While Japan and Australia are U.S. treaty allies including India in this club has been a major concern for China. In the past Beijing may have used border intrusions to signal annoyance with proximate Indo US relations be it in 2017 in Doklam or Galwan in 2020.
The trends in August seem to be positive though. During the Wang Yi visit, China and India expressed a commitment to, “to uphold multilateralism, enhance communication major international and regional issues, maintain a rules-based multilateral trading system with WTO at its core, and promote a multipolar world, that safeguards the interest of developing countries.” All these factors are particularly relevant given the United States attempts to create a unilateral America focused trade and geopolitical system.
Wang said that “currently, the profound changes unseen in a century are accelerating their evolution, unilateral bullying practices are rampant, free trade and the international order face severe challenges. On the occasion of the 80th anniversary of the founding of the United Nations, human society has come to a critical crossroads of deciding the future direction. China and India, as the two largest developing countries with a combined population of over 2.8 billion, should demonstrate a global vision and demonstrate a sense of global responsibility, act as major powers, set an example for developing countries in pursuit of strength through unity, and contribute to promoting world multipolarisation and democratization of international relations”.
Wang Yi also referred to India a “major state,” including Delhi for the first time in the exclusive club to include US, Russia and Europe. This will be a bait to the United States as well as Mr Trump, the President believes that major geopolitical decisions need to be taken by the U.S. Russia and China not even including Europe.
The Chinese ambassador to India Xu Feihong supported India on the tariffs issue and stated on August 21, that “China fully opposes it.” He added that such measures were disrupting the global economic system. “US has imposed tariffs of up to 50% on India and even threatened for more. China firmly opposes it. Silence only emboldens the bully. China will firmly stand with India,” news agency ANI quoted Feihong as saying.
There is a U.S. factor as a trigger in improvement of India China relations, this is largely overplayed as the improvements were happening even before the storm in the New Delhi’s relations with Washington a manifestation of which is the delay in a bilateral trade agreement to settle the tariff issue as well as a stiff 25 % penalty for India drawing oil from Russia and then selling the same for profit in the open market as per American officials.
Regional Developments. While there was anger in India over fused military to military relations demonstrated during Operation Sindoor between the Chinese and the Pakistan armed forces this has not had an impact on overall India China relations with the Indian Defence Minister Mr Rajnath Singh visit to China to attend the Shanghai Cooperation Organisation Defence Minister’s meeting in June.
India did not object as it normally does for a foreign visitor clubbing a visit to the country with that of China, though technically Mr Wang Yi first flew to Kabul on 20 August and then landed in Islamabad partially dehyphenating his tour.
On the other hand Xinhua China’s state news agency has claimed that Indian Foreign minister S. Jaishankar has “reaffirmed that Taiwan is a part of China,” after the meeting between him and his Chinese counterpart, Wang Yi, in Delhi on August 18 even though there was no mention of it from the Indian side.
The Chinese readout of the Wang Yi – Ajit Doval meeting also claims that India expressed commitment to the One China Policy, a statement which knowledgeable analysts claim has not been reiterated by New Delhi for at least a decade and a half. So India appears to be giving in some ways on the regional factors that had restrained India China relations.
Boundary Management. Of immediate concern is de-escalation from the Eastern Sector in particular beginning with the principles and modalities thereof even as India and China have deployed what many open media reports say between 50,000 to 60,000 troops on the Line of Actual Control and McMahon Line. As per Money Control some PLA combined arms brigades have moved 100 km behind the LAC, but many continue to be forward deployed. The concerns essentially are on location of troops post de-escalation.
“The way China has constructed roads, bridges, tunnels and permanent habitats across the LAC, from eastern Ladakh to Arunachal Pradesh over the last five years, their troops can pull back 100–150 km and still reoccupy forward posts within two to three hours,” a senior Army officer was quoted by Money Control. “Our forces cannot do that. This mobilisation gap has to be taken into account in any de-escalation dialogue.” “There is no disruption in coordinated patrolling at the disengaged sites,” another officer was quoted by Money Control said, “but we cannot lower our guard, since the PLA’s preparedness and infrastructure buildup remain intact.”
Restoring India’s patrolling rights in areas where “no-patrol buffer zones” were created after earlier disengagement rounds up to September 2022 is another issue. The zones—ranging from 3 km to 10 km in places like Galwan, the north bank of Pangong Tso, the Kailash Range and parts of Gogra-Hot Springs also need to be resolved for smooth boundary management.
Boundary Resolution. On the resolution of the boundary issue, the developments during the SR talks have been positive and the Chinese Ministry of Foreign Affairs Press Release points on the same are reiterated verbatim as below –
Point 4. Agreed to set up an Expert Group, under the Working Mechanism for Consultation and Coordination on the China-India border affairs (WMCC) framework, to explore Early Harvest of boundary delimitation on appropriate Sectors.
Point 5. Agreed to set up a Working Group, under the WMCC framework, to advance effective border management in order to maintain peace and tranquility in the border areas.
Point 6. Agreed to create General-Level Mechanisms in the Eastern and Middle Sectors, in addition to the existing General-Level Mechanism in the Western Sector, and hold the next round of General-Level Mechanism meeting in the Western Sector at an early date.
[In the eastern sector (Sikkim and Arunachal Pradesh) and middle sector (Uttarakhand and Himachal Pradesh) the meetings will to involve the Lt-General heading the Uttar Bharat Area in Bareilly for the middle sector, and the Lt-Generals commanding either 3 Corps in Dimapur or 4 Corps in Tezpur for the eastern sector].
Point 7. Agreed to use the border management mechanisms at diplomatic and military levels to carry forward the process of border management, and discuss de-escalation, beginning with the principles and modalities thereof.
Commerce and Trade. As India US trade disruptions are occurring, this is an important vector for New Delhi. One area is opening of border trade. “ Point 9 of the Chinese Statement indicated that both sides have agreed to re-open the three traditional border trading markets, namely Renqinggang-Changgu, Pulan-Gunji and Jiuba-Namgya. [namely Lipulekh Pass, Shipki La Pass and Nathu La Pass]
India is now open to relax restrictions on business visas for Chinese professionals, to revive corporate ties thus allowing Chinese companies such as Vivo, Oppo, Xiaomi, BYD, Hisense and Haier senior managers for various positions, including chief executives, country heads and executives in sales, marketing, finance and human resources, according to an Economic Times report to New Delhi. Chinese suppliers account for between 50% and 65% of components used in India’s electronics industry as per the Economic Times. Facilitating visits and placement of senior managers will be thus of mutual benefit.
Interestingly India’s merchandise exports to China have recorded a double-digit monthly growth thus far in 2025-26, cumulatively growing by 20% to $5.76 billion in the first four months of the financial year compared to $4.80 billion in the same period in 2024-25, driven by energy, electronics, and agricultural products, and raising hopes that this could help offset some of the losses arising from US tariffs. Indian petroleum products, agricultural goods and marine items have immense potential in the world’s second biggest market after the US
River Waters Management. After Chinese launch of the Medog Dam project on the Yarlung Tsangpo mention at Point 8 of exchange of views “on trans-border rivers cooperation and agreed to give full play to the role of the China-India Expert Level Mechanism on Trans-border Rivers and keep communication on the renewal of relevant MoUs. The Chinese side agreed to share hydrological information during emergency situations based on humanitarian considerations’ assumes importance.
People to People Relations. India and China have also agreed to restore direct flights, allow tourist travel. Resumption of direct flight connectivity between Chinese mainland and India and finalizing an updated Air Services Agreement is thus planned. Facilitation of visas to tourists, businesses, media and other visitors in both directions is another positive. Upscaling Indian pilgrimage to Mt. Kailash/ Gang Renpoche and Lake Manasarovar / Mapam Yun Tso in Tibet Autonomous Region of China starting 2026 is also agreed upon.
On the diplomatic front some of the actionable issues include holding the Third Meeting of the India-China High-level Mechanism on People-to-People Exchanges in India in 2026 and holding events in 2025 to commemorate the 75th anniversary of the establishment of diplomatic relations between India and China.
Overall Review
In the past 10 months after the Modi Xi Summit in October 2024 in Kazan Russia, India China relations have attained a positive trajectory ironically even as the US and India relations have fallen off the cliff so to say. How far the two are linked remains to be seen though the connections cannot be denied. India’s growing partnership with the United States has been a major factor in China’s engagement with New Delhi. This could also be linked to the Chinese widespread intrusion on the line of actual control in2020. On the other hand, with India US relations at a new low, is there a momentum for closer engagement by China or for New Delhi for that matter with Beijing? For China this could be seen as an opportunity whereas for India this has become a necessity. Thus apart from the boundary issue, Indian tone has been greatly softened.
The dependence on China for economic and technical issues by India could also be a factor in New Delhi going in for a rapprochement.
Will the determination expressed by both sides during the SR talks of taking concrete action to resolve the boundary issue permanently a factor of India overcoming past objections of delinking the boundary dispute from overall relations is another factor. Is this only a temporary ploy by China as the process of delimitation, delineation and demarcation of the boundaries could take years if not decades particularly as this may involve reneging rights over sovereign territory such as Aksai Chin requiring parliamentary approval in Delhi.
Yet there are multiple issues that may set back this forward movement including Tibet and succession of HH Dalai Lama, Taiwan amongst others. Vijay Gokhale, a former Indian ambassador to Beijing, said in an opinion piece in The Times of India that China and India still had many diverging interests.
But he wrote that China provided India and other developing countries a crucial counterbalance to “Trumpian disorder” as a source of capital and technology and as a partner in fighting climate change. “China is beginning to look better than at any time in the previous five years,” Gokhale wrote.
Efforts will be on in China to continue to expand differences between US and India, how far these will succeed remains to be seen?
The US tariffs spat is resulting in an adversarial reaction from India however India’s response to U.S. tariffs—especially those linked to Russian oil—shouldn’t trigger a headlong pivot toward China and Russia. There is much at stake for India in ironing out differences with the United States and also preventing strategic overdependence on any major power including Russia. India cannot afford secondary sanctions by the United States or to upset the U.S.–India defense cooperation. Indian policy makers are aware that China is a complex partner with a different political system than India with territorial sovereignty issues and a massive trade surplus. A two track policy of multilateralism and genuine strategic autonomy by expanding indigenous capacities remaisn the way ahead.
And what would be China’s approach in case of reset of relations between India and the United States. Despite all these imponderables celebrating the uptick in India China relations and tangible fruits of the same in expanding economic, trade and people to people engagement along with border de-escalation may be the way ahead.