India-China After Modi-Xi: Learning to Compete Without Crashing Into Crisis

India’s assessment of China is different today from what it was before Galwan. Beijing, too, has had to account for India’s growing economic weight, expanding external partnerships and greater geopolitical confidence. The wider competition for influence across Asia has also become sharper.

The Modi-Xi meeting matters not because India and China suddenly agree, but because both have learned how expensive their disagreements can become.

When Prime Minister Narendra Modi met Chinese President Xi Jinping in New Delhi on September 12, the significance of the encounter lay less in diplomatic symbolism than in what it represented after years of mistrust.

Xi’s return to India after seven years, during the 18th BRICS Summit, came after the deepest rupture in bilateral relations in decades. The Galwan clash of June 2020 had transformed the relationship almost overnight, leaving 20 Indian soldiers dead, including Colonel B. Santosh Babu, while China later acknowledged four deaths on its side.

The memory still hangs over every conversation between New Delhi and Beijing. The return of dialogue, therefore, should not be mistaken for the return of trust. What appears to be emerging instead is something more practical and perhaps more sustainable: a cautious equilibrium in which competition continues, differences remain, but neither side allows every disagreement to push the entire relationship back towards crisis.

The Border Still Holds the Key

For India, the most important question after the Modi-Xi meeting is not whether the diplomatic atmosphere feels warmer. It is whether the Line of Actual Control remains peaceful and predictable.

The two leaders agreed that their relationship should be approached from a long-term and tactical perspective and that differences should not become disputes. Modi also reiterated the Indian position that mutual respect, mutual sensitivity and mutual interest must guide the relationship, while existing agreements and understandings on the boundary need to be respected.

That distinction is important. Beijing has long argued that the boundary question and broader bilateral relations can be addressed in parallel. New Delhi has been more cautious because the condition of the border directly determines the political space available for everything else.

The difference has not disappeared. What has changed is the apparent willingness to manage it through sustained engagement rather than allowing it to freeze the entire relationship.

The Galwan episode made the point brutally clear. The border is no longer an issue that can be compartmentalised within India’s China policy. It is the foundation on which political confidence, economic engagement and even people-to-people contact now rest.

A final boundary settlement may remain distant. The immediate objective is more modest and more urgent: prevent escalation, preserve peace and ensure that military friction does not once again overwhelm the wider relationship.

From Rivalry to Rules of Competition

India and China are unlikely to become strategic partners in the conventional sense. Their territorial dispute remains unresolved, their economic interests often collide, and their approaches to regional security frequently diverge.

China’s relationship with Pakistan remains a concern for New Delhi. India’s growing partnerships with the United States, Japan, Europe and other Indo-Pacific powers are viewed carefully in Beijing. Neither side is likely to abandon its calculations simply because political dialogue has resumed.

The more realistic possibility is managed competition. India needs enough engagement to prevent rivalry from becoming conflict, enough preparedness to ensure that dialogue is never mistaken for weakness, and enough economic resilience to prevent commercial dependence from becoming geopolitical vulnerability.

The old vocabulary of civilisational contact is no longer sufficient for this relationship. The future will require a harder language of rules, reciprocity and restraint. This is also why the current opening matters for India. A permanently hostile relationship with China would consume military resources along the Himalayan frontier, complicate economic planning and narrow New Delhi’s diplomatic room for manoeuvre.

India is simultaneously working with Washington, Moscow, European capitals, Tokyo, Southeast Asia, West Asia and the wider Global South. Its foreign policy cannot be built around permanent confrontation with one major power. Engagement with Beijing requires strategic autonomy.

India should be able to cooperate with China where interests overlap and resist Chinese positions where they conflict with Indian interests. That flexibility is not inconsistency. It is one of New Delhi’s most valuable diplomatic assets.

Trade With China, Without Becoming Vulnerable to China

Economic engagement presents an even more complicated calculation. India and China remain important trading partners despite political tensions, yet the relationship carries a substantial trade imbalance, concerns over market access and vulnerabilities in critical supply chains. Restoring commercial activity therefore cannot simply mean returning to the pre-2020 model.

Complete economic separation would be neither practical nor desirable. Unrestricted dependence would be equally unwise. India needs greater and more balanced trade while continuing to diversify supply chains and strengthen domestic capacity in strategically sensitive sectors. Indian companies need access to the Chinese market, but New Delhi must also ensure that economic links do not create vulnerabilities that can later be exploited for political pressure.

The real question is therefore not whether India should trade with China. It is whether India can trade with China while preserving enough resilience to withstand a future crisis. This distinction will become fairly important as technology, critical minerals, manufacturing inputs and supply chains acquire greater geopolitical significance.

Small Openings Can Matter

The reopening of ordinary channels between the two societies may appear less dramatic than a summit between Modi and Xi, but these are precisely the links that can give a relationship greater resilience.

The Kailash Mansarovar Yatra is a telling example. One of the oldest and most emotionally significant people-to-people connections between India and China was disrupted amid the deterioration in relations and the pandemic. Its eventual resumption carried meaning beyond tourism or pilgrimage. It signalled that some of the ordinary bridges between the two societies could begin to reopen.

Business contacts, academic exchanges, tourism and direct connectivity can create habits of interaction that survive political turbulence. They cannot settle the boundary dispute, but they can reduce the distance and mistrust that accumulate when societies stop encountering one another.

For millions of people far removed from diplomatic tables, the best outcome is not a grand tactical reconciliation. It is something simpler: fewer crises, steadier borders and a relationship that does not repeatedly turn political tension into everyday uncertainty.

These openings should still be approached carefully. Greater contact must be accompanied by sensible safeguards where security sensitivities exist. Engagement is valuable precisely when it strengthens resilience rather than creating new vulnerabilities.

BRICS Gives India Room to Manoeuvre

The setting of the Modi-Xi meeting matters because the encounter took place during the BRICS Summit, allowing India and China to engage within a broader multilateral framework without pretending that their bilateral disagreements had vanished. This creates useful diplomatic space because the two countries do share interests in several global institutions and in giving developing economies a greater voice in international governance.

But cooperation within BRICS should not be confused with alignment. India does not want BRICS to become an anti-Western bloc, just as it does not want engagement with China to weaken its partnerships with the United States, Europe, Japan or other countries. New Delhi can work with Beijing in one forum while competing with it in another.

That is precisely what strategic autonomy is supposed to enable. For India, the Global South is particularly important in this regard. Cooperation with China on issues where interests converge can strengthen India’s influence without requiring it to accept Beijing’s wider preferences.

Normalisation Is Not Trust

A summit can reopen communication. It cannot manufacture confidence.

China’s willingness to improve relations is welcome, but the credibility of the current thaw will ultimately be determined by behaviour on the ground. India cannot allow renewed dialogue, trade or connectivity to create the impression that the lessons of 2020 have been forgotten.

Military preparedness along the frontier must continue. Existing border agreements must remain central. Economic engagement should not generate fresh dependencies, and diplomatic optimism should always be tested against actual conduct. The relationship has also changed in ways that cannot simply be reversed.

India’s assessment of China is different today from what it was before Galwan. Beijing, too, has had to account for India’s growing economic weight, expanding external partnerships and greater geopolitical confidence. The wider competition for influence across Asia has also become sharper.

The old relationship is therefore gone. Trying to recreate it would be a mistake. The objective should instead be a more mature relationship in which competition and cooperation coexist within clear limits. That requires diplomatic engagement, military preparedness, selective economic cooperation and unmistakable red lines.

A durable stabilisation will depend on sustained peace along the border, respect for existing understandings and a more balanced economic relationship that does not create fresh vulnerabilities. The reopening of people-to-people links must survive political fluctuations, while cooperation in multilateral institutions should continue even as competition persists elsewhere. If these conditions hold, the present moment can mark the beginning of a more predictable India-China relationship rather than another temporary pause in a recurring cycle of tensions.

India therefore has little reason for either euphoria or permanent hostility. Geography makes engagement unavoidable. Economics makes selective cooperation useful. The lessons of Galwan make vigilance indispensable. The Modi-Xi meeting has created diplomatic space. New Delhi now has to use that space carefully, without confusing conversation with confidence or normalisation with trust.

The future of India-China relations will not depend on the two countries agreeing on every issue. It will depend on whether they can manage their differences without allowing them to repeatedly slide into crisis.

This is the real significance of the cautious equilibrium now taking shape. India and China can pursue dialogue without illusions, cooperation without dependence and engagement without compromising vigilance. The measure of progress will be whether this balance can hold when the next disagreement inevitably arrives.