INDIA – CHINA RELATIONS

Group Member – Aryan Arora, Ayush Gupta, Aditya Kumar, Adarsh Chaudhary, Latika Makhijani
 INTRODUCTION TO INDIA-CHINA RELATIONS

Overview:
India and China, two of the largest and fastest-growing
economies in the world, share a deep and complex
relationship that spans centuries. Historically, their ties were
rooted in cultural exchanges and trade, especially through the
Silk Road. However, over the past few decades, the
relationship has evolved significantly in response to both
economic opportunities and geopolitical challenges.
Significance:
• India and China are major players in the global economy, with
both countries having a large impact on world trade,
investment, and international policy.
• Their relationship is critical not only for South Asia but also
for global peace, security, and economic stability.
 KEY THEMES - ECONOMY AND TRADE

Economic Interdependence:
• China is India’s largest trading partner, with bilateral trade growing
exponentially in recent decades.
• Despite trade imbalances, economic ties remain robust, especially
in sectors like manufacturing, technology, and pharmaceuticals.
• Both countries are increasingly interdependent, particularly in the
context of global supply chains and infrastructure development.
Challenges in Trade Relations:
• Trade deficits have been a major point of contention for India, as
China continues to have a significant edge.
• Non-tariff barriers, intellectual property issues, and regulatory
concerns remain points of friction.
 GEOPOLITICS, STRATEGIC INTERESTS & FUTURE OUTLOOK

Geopolitical Dynamics:
• Border disputes, especially in areas like Aksai Chin and Arunachal Pradesh,
have led to military confrontations, most notably the 1962 war and
ongoing tensions.
• Both nations are engaged in regional and global rivalries, with India part
of alliances like the Quad, and China pursuing its Belt and Road Initiative
(BRI).
Future Outlook:
• The relationship is expected to be a mix of competition and cooperation,
with both countries focusing on regional influence and global leadership.
• Key issues for the future include cybersecurity, trade diversification, and
balancing strategic interests in multilateral platforms (BRICS, SCO, UN).
 EARLY TIES & PANCHSHEEL AGREEMENT

•Early Relations:
•India and China shared cultural, historical, and civilizational ties
dating back to ancient times. Early contacts were mainly through
trade and Buddhism.
•Diplomatic relations were formalized post-1947, with India
being one of the first countries to recognize the People's
Republic of China (PRC).

•Panchsheel Agreement (1954):

•India and China signed the Panchsheel Agreement on
peaceful coexistence.
•The agreement outlined mutual respect for sovereignty, non-
interference in internal affairs, equality, and peaceful coexistence.
•It aimed to foster bilateral cooperation, especially in the fields of
trade and infrastructure.
IMPACT OF THE 1962 WAR & DIPLOMATIC SHIFTS POST-1962

•1962 India-China War:

•The 1962 Sino-Indian War was a defining moment, arising primarily due to
border disputes in the Aksai Chin region and the North-East Frontier
Agency (NEFA).
•The war ended in a Chinese victory, leading to a long-lasting impact on the
diplomatic relationship.
•Political Strain: Post-war, India-China relations were marked by mistrust,
diplomatic isolation, and military preparedness on both sides.
•Diplomatic Shifts Post-1962:
•After the war, India shifted its foreign policy to align more with the West (USA
and Soviet Union) for strategic security support.
•China moved closer to Pakistan and other regional powers.
•Diplomatic relations remained tense throughout the Cold War, with minimal
high-level engagement.
•Border Talks Resumed: Despite the strained relations, India and China
began border talks in the 1980s, though it took decades to normalize
interactions fully.
TRADE AND INVESTMENT

•Bilateral Trade Volume: In the fiscal year 2024, India-

China bilateral trade reached $118.4 billion, with imports
from China at $101.7 billion and exports to China at $16.67
billion.
•Trade Deficit: This trade dynamic resulted in a significant
trade deficit for India, highlighting concerns over economic
dependence.
•Key Sectors:
•Imports from China: Electrical and electronic equipment,
machinery, organic chemicals, and plastics.
•Exports to China: Primarily raw materials, including minerals
and agricultural products.
 DEPENDENCE AND CHALLENGES

•Economic Dependence: India's reliance on Chinese imports spans

critical sectors such as electronics, pharmaceuticals, and textiles, raising
concerns about domestic industry competitiveness.
•Challenges:
•Trade Imbalance: The widening trade deficit strains India's foreign
exchange reserves and impacts domestic manufacturing.
•Domestic Industry Pressure: Flooding of Indian markets with Chinese
goods challenges local producers, especially in the electronics and
textile sectors.
•Mitigation Efforts:
•Policy Initiatives: The Indian government is implementing measures such
as the Production-Linked Incentive (PLI) scheme to boost domestic
manufacturing and reduce import dependence.
•Diversification of Trade Partners: Efforts are underway to explore new
markets and reduce over-reliance on China.
 BORDER DISPUTES AND REGIONAL INFLUENCE

• AC Tensions and Military Standoffs:

• 2017 Doklam Standoff: India and China faced military confrontation in the
Doklam plateau over a road construction project by China.
• 2020 Galwan Valley Clash: The border tensions escalated when Indian and
Chinese soldiers clashed in Galwan Valley, resulting in casualties on both
sides.
• Current Status: The situation along the Line of Actual Control (LAC) remains
volatile, with both countries continuing military build-ups and diplomatic
negotiations.
• China's Regional Influence in South Asia:
• China's Belt and Road Initiative (BRI) has been a tool for expanding influence
in South Asia, with projects in Pakistan (China-Pakistan Economic Corridor),
Sri Lanka, and Nepal.
• India sees this growing influence as a direct challenge to its regional
dominance.
 GLOBAL ALLIANCES AND STRATEGIC RESPONSES

•India's Strategic Response:

•Indo-Pacific Strategy: India aims to counter China's growing dominance in the Indo-Pacific through its
strategic alliances like the Quad (comprising the U.S., Japan, and Australia).
•Countering China's Influence: India has become more vocal about its concerns over Chinese actions
in the region and has sought to strengthen its relations with countries in South East Asia, such as
Vietnam, Indonesia, and others.

•Global Alliances:
•Quad: The Quadrilateral Security Dialogue is seen as a response to China’s increasing presence in
the Indo-Pacific region. India plays a central role in fostering collaboration on issues like maritime
security, trade, and infrastructure.
•BRICS: India is a member of the BRICS (Brazil, Russia, India, China, South Africa) forum, aiming to
balance China’s influence in global financial and economic matters.
•India's Indo-Pacific Policies: India’s emphasis on freedom of navigation, rule-based order, and stability
in the region reflects its response to China's assertive presence.
 POLITICAL & DIPLOMATIC ENGAGEMENT

•Key Summits and Agreements:

•Doklam Crisis (2017): Tensions led to diplomatic talks and reaffirmation of the need for peace at the 2017 BRICS
summit, with both nations agreeing to avoid conflict.
•Wuhan Summit (2018) and Mamallapuram Summit (2019): High-level meetings aimed at stabilizing relations, enhancing
bilateral cooperation, and reducing tensions, despite lingering concerns.
•Impact of Strained Relations on Trade & Investments:
•Trade Dynamics:
•Despite border disputes, trade between India and China has grown significantly, making China one of India's largest
trading partners. However, the trade deficit remains a key concern.
•In recent years, India has imposed restrictions on Chinese technology and apps, citing national security concerns,
affecting the economic relationship.
•Investments:
•Chinese investments in India have faced increasing scrutiny, particularly in sectors like technology and
infrastructure, as tensions rise. Some sectors, like telecommunications, have witnessed reduced Chinese
participation.
•Strained diplomatic relations have led to hesitation among businesses regarding cross-border investments,
impacting long-term economic cooperation.
 TECH, CYBERSECURITY & CHINESE INVESTMENTS

•Chinese Investments in Tech:

•China has made substantial investments in India’s tech industry,
especially in startups, e-commerce, and telecommunications.
•Key Chinese companies, like Alibaba,Tencent, and Huawei, have
played a pivotal role in India’s digital economy, although this has led
to strategic concerns.
•However, increasing geopolitical tensions and security concerns
have led to calls for reducing dependence on Chinese technology.
•Bans on Apps & Security Concerns:
•India banned over 200 Chinese mobile apps, including TikTok and
WeChat, in response to national security concerns and data
privacy risks amid border tensions.
•These bans have sparked debates about digital sovereignty and the
need for stronger cybersecurity frameworks in both countries.
•India’s cybersecurity concerns are linked to potential threats
posed by Chinese technology, especially in areas of data security,
espionage, and surveillance.
 AC ADEMIC, TOURISM & CULTURAL EXCHANGES

•Academic Exchanges:
•Despite political strains, India and China have maintained academic collaborations, with
Chinese students enrolling in Indian universities, particularly in areas like engineering,
management, and medical sciences. Joint research initiatives have continued in areas like
climate change, environmental sciences, and public health.
•However, growing political tensions and restrictions have impacted student exchanges and
academic collaborations in recent years.
•Tourism & Cultural Exchanges:
•Cultural diplomacy has been an important aspect of India-China relations, with the Indian
Cultural Centre in Beijing and the Chinese Cultural Centre in Delhi promoting exchanges in
arts, language, and philosophy.
•Tourism, once a strong avenue for people-to-people ties, has been adversely affected by the
pandemic and political strains, although it remains an essential part of fostering mutual
understanding.
•Initiatives like the Visit India campaign for Chinese tourists and the Chinese Cultural Festival
have helped bridge cultural gaps. However, restrictions and visa challenges have curtailed their
growth.
 FUTURE OUTLOOK – COOPERATION VS. COMPETITION

•Cooperation Opportunities:
•Despite geopolitical tensions, both India and China share common interests, including
regional stability, economic growth, and addressing global challenges like climate change,
terrorism, and pandemics.
•Trade and investment ties remain substantial, with opportunities to enhance
cooperation in sectors like technology, renewable energy, infrastructure, and
manufacturing.
•Both countries could benefit from greater collaboration on global issues, such as
reforming multilateral institutions and navigating challenges posed by the evolving global
order.
•Competition Factors:
•Strategic rivalry in Asia remains a significant factor, particularly regarding influence in
South Asia, the Indian Ocean, and the Indo-Pacific region.
•Growing competition in the digital and technological space, including 5G networks,
artificial intelligence, and space exploration, will continue to shape the future trajectory
of relations.
•Military stand-offs along the Line of Actual Control (LAC) and regional dominance will
be ongoing sources of tension, requiring careful diplomatic management.
 BALANCING ECONOMIC GROWTH & NATIONAL SECURITY

•Economic Growth & Interdependence:

•India and China have become crucial economic partners, and continued growth in bilateral trade offers
opportunities for both countries.
•India can benefit from Chinese investments in infrastructure, manufacturing, and technology, while China can
tap into India’s vast consumer market and skilled workforce.
•However, balancing economic cooperation with national security concerns is essential to mitigate risks
associated with strategic competition and technological dependence.

•National Security & Strategic Autonomy:

•As both nations prioritize national security, India must ensure its sovereignty is safeguarded in the face of
Chinese influence, particularly in areas like technology, defense, and regional alliances.
•Enhancing cyber defense capabilities, diversifying supply chains, and strengthening alliances such as Quad and
BRICS will be essential for India’s strategic autonomy.
•A balanced approach that maintains a secure and stable environment for economic growth, while addressing
security concerns, is crucial for a sustainable future.
 THANKYOU

•Final Thoughts & Recommendations:

•India and China must work toward minimizing tensions
through dialogue, conflict resolution, and fostering cooperation
in areas of mutual interest.
•Diplomatic efforts should focus on strengthening trade
relations, improving cybersecurity measures, and ensuring
stability in the border regions.
•India should continue strengthening its global alliances and
ensure that its economic interests do not compromise its
security and sovereignty.