Can India and China Overcome Old Disputes for Practical Cooperation?

In his Mandala Theory of foreign policy, the renowned ancient Indian philosopher Kautilya establishes that “the immediate neighbor state is most likely to be an enemy.” This thesis holds equal relevance in modern nation-state relations. India and China are a pronounced example.
India and China are major regional powers in Asia and among the fastest-growing economies of the 21st century. Despite being neighbors, a stark contrast exists between their domestic policies, political systems, foreign policies, market economies, ideologies etc. Before acknowledging their present disputes, it is necessary to consider their initial relationship and ambitions.
India was under British colonial rule for nearly two centuries, declaring independence on August 15, 1947. It constructed a democratic political structure influenced by the Western states. Conversely, China faced a two-decade-long civil war between Kuomintang and the Chinese Communist Party (CCP) from 1927 to 1949. The CCP gained complete control of mainland China and proclaimed the resulting People’s Republic of China would be based on Marxist ideology.
India was among the first non-communist countries to recognize the legitimacy of the new Chinese state. These two new states set in motion a favorable bilateral relationship. This era of brotherhood was publicly endorsed by the slogan, “Hindi Chini bhai bhai” (“Indians and Chinese are brothers”). However, this positive relationship would not last long.
As early as the 1950s, suspicion and distrust grew between the nations surrounding China’s interest in Tibet, a buffer land between India and China. In 1951, China annexed Tibet. Indian Prime Minister Jawaharlal Nehru and Chinese Premier Zhou Enlai attempted to ease tensions by signing the Panchsheel Pact in 1954. Then in 1959, the Chinese government denounced the McMahon line, the border between India and Tibet (China). China started claiming the Indian territory of the Aksai Chin Plateau, and the India–China relationship further deteriorated when India discovered a Chinese road in the region. 
Border disputes arose between the nations, leading to the 1962 Sino–Indian War. The conflict ended with India’s defeat and China capturing areas of the Assam plains in northeast Aksai Chin and Demchok in northwest India. Relations worsened still when India gave refuge to the Dalai Lama, a spiritual and temporal head of Tibet, and China aided Pakistan’s war efforts against India. Historians can trace periods of skirmish and negotiation alike to the 1960s.
In 2017, a major confrontation took place in Doklam, Bhutan. This area is claimed by both China and Bhutan and is an important juncture for all three nations, including India. While India accused China of building an illegal road in Bhutan’s territory, which caused security concerns for both India and Bhutan, China accused India of intrusion in its territory.
What started as a border dispute soon spilled over into foreign policy, dictating bilateral and multilateral relations as well as forming alliances. Asia, specifically South Asia and Eastern Asia, has become a testbed for both India and China to flex their power and influence. The pro-Chinese governments of India’s neighbors — Pakistan, the Maldives and now even Bangladesh — pressure India to change its 1984-esque “Big Brother” attitude. Similarly, China is surrounded by pro-Indian governments — Japan, Taiwan and the Philippines — which cooperate with India militarily.
China has undertaken its Belt and Road Initiative and invested extensively in building sea routes to foster infrastructure development in other nations. The goal is to increase trade and trade relations with Asia. Meanwhile, India collaborates with the United States, Australia and Japan in the Quadrilateral Security Dialogue (or Quad) to counter China’s presence in the Indian Ocean. The Quad’s goal is to unify a multilateral coalition to resist Chinese influence, which could embolden other nations to join and counterbalance China’s dominance.
China has made many such advances to keep India under check. With this rise of Chinese dominance in market and international politics, India has become a major element to balance Chinese regional power.
International relations in the 20th century evolved with the start of new alliances and multilateral engagements. To make these intertwined relations more prominent, globalization connected national economies, forcing even the socialist nations to open their markets for trade. In the 21st century, any action taken by states unilaterally impacts other international players as well. As major regional powers, the fastest-developing economies and two of the most populous countries in the world, India and China have undeniably become crucial international forces.
The rift between India and China that started with border disputes and ideological differences is now a matter of international concern, with both equilibrating one another. Border issues are in themselves complicated problems faced by majority nations, solutions to which are never secure for both parties. Given the current international arena, ambitions and geopolitical nature of the power struggle, even if the border crisis were solved, a permanent settlement between India and China is infeasible for the foreseeable future.
Rup Narayan Das, author of the book, India-China Defence Cooperation and Military Engagement, describes India and China’s defence cooperation as a “complex mix of conflict and cooperation.” Having no mutually delineated Line of Actual Control (LAC) and differences in perceptions of the LAC, alternative periods of skirmishes and negotiations are common. But to bring stability in the border regions and foster understanding, India and China signed a Border Defence Cooperation Agreement on October 23, 2013. Under this agreement, neither side can use military strength to attack the other, and both sides must share information about their weapons and combat operations, among other things.
The 2020 Galwan Valley confrontation, which killed 20 Indian soldiers and an undisclosed number of Chinese soldiers, revealed the persisting atmosphere of distrust between the armies. Fortunately, communications through diplomatic and military channels have made steady progress to solve the Western border issue, said Senior Colonel Wu Qian. In light of the recent exchanges, External Affairs Minister Subrahmanyam Jaishankar said that about 75% of the “disengagement problems” with China have been sorted out. Likewise, Qian said that the troops have “disengaged on the ground at multiple locations in Eastern Ladakh,” including the Galwan Valley.
India and China are also part of different international groups that quintessentially demand collaboration: BRICS, the Shanghai Cooperation Organisation (SCO), G21 and the United Nations. As BRICS continues to grow and challenge Western economic dominance, especially the hegemonic position of the US dollar, a faltering of India–China cooperation would be detrimental to BRICS’s development. India initially contributed to the SCO and helped it increase its international reputation; but as it sees the organization being China-dominated, India has been decreasing its participation.
With increasing globalization and the common concerns of mankind, India and China have emphasized the need to shift from traditional technologies to green technologies, electric vehicles, low-carbon urbanization and adaptation. Many regard the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol agreement as most appropriate for international cooperation. While these organizations provide a forum for dialogue and cooperation, they also lead to discontent and competition. One long-standing issue is the matter of getting India a permanent seat in the UN Security Council, as well as China’s objections to this goal. China has caused delays and indecisiveness in the UN by skipping summits, opposing proposals and disagreeing.
Economic cooperation is one of the most important areas for India and China to agree upon. After all, the trade relationship is expanding; it amounted to $113.83 billion in bilateral trade in the 2023 fiscal year.
“We feel that the economic relationship with China has been very unfair and very unbalanced. We don’t have the same market access there, while they have much better market access in India,” Jaishankar said at the Global Centre for Security Policy in Geneva.
Notwithstanding the colored balance of payment (BOP), India and China’s economic relationship complements the other nation. Where China excels in cost-effective manufacturing, India specializes in cost-effective design and development. India offers China a populous market for its many products, and China has emerged as India’s largest trade partner in recent years. Although both countries have become investment destinations, bilateral investment has yet to grow.
In May 2014, China invited India to join the Asian Infrastructure Investment Bank (AIIB). As of August 14, 2024, 48 projects (25 sovereign and 11 non-sovereign) have been approved for $10.45 billion financing. The New Development Bank (NDB), which established its office in Shanghai, opened its India Regional Office in Gujarat International Finance Tec-City in June 2022. India is the biggest borrower in NDB, with 19 projects approved with a commitment of $6.92 billion as of August 31, 2022. With an increasingly integrated economy and a symmetrical BOP, India and China’s relations can prosper and negotiations can be more effective.
In contemporary international relations, cooperation and fallouts are an inevitable phenomenon. India and China are no exceptions. The commendable aspect of the India–China relationship is their mutual respect for communications and negotiations. Despite the antithesis between their prevalent ideologies and their role in the balance of power, the two have mostly maintained stable bilateral relations with short periods of squabble. They must now maintain the status quo in international politics. While alliance or friendship are not possible options in the international arena, stability and collaboration are expected and attainable.
[Lee Thompson-Kolar edited this piece.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.