India’s Strategic Diplomacy: Balancing Relations With China & the World

For New Delhi, the relationship with Beijing is a study in contrasts: deep economic interdependence and shared regional responsibilities on the one hand, and persistent strategic rivalry on the other. Since the shock of the 1962 border war and the more recent spike of violence in 2020, India’s foreign policy has had to thread a narrow needle—maintaining commercial ties and regional engagement while safeguarding national security and preserving strategic autonomy. This explainer traces the historical background, the drivers of current tensions, how New Delhi has adapted diplomatically, what this means for ordinary people, and plausible pathways ahead.

Historical backdrop: from 1962 to Galwan and beyond

Relations between India and China have been strained at intermittent moments since their 20th-century encounters. The 1962 border war cast a long shadow, hardening Indian strategic thinking about its northern frontier and shaping military posture for decades. More recently, an essentially dormant frontier dispute was jolted into acute crisis with the deadly Galwan Valley clashes of 2020—the first fatalities along the Line of Actual Control in decades—which marked a significant decline in the rules of engagement that had previously allowed both sides to manage tensions without wide escalation. That rupture forced policymakers in New Delhi to recalibrate their assumptions about China’s behaviour and intentions.

Why tensions persist: causes and fault lines

A handful of structural and proximate causes explain why India–China ties are difficult to normalise fully.

First, geography and unresolved borders matter. The lack of a mutually agreed, demarcated boundary across large stretches of the Himalayas leaves frequent room for patrol friction, local standoffs, and competing infrastructure projects that are interpreted as strategic posturing.

Second, strategic competition and great-power rivalry shape choices. China’s expanding military capabilities, growing presence in the Indian Ocean region, Belt and Road infrastructure outreach, and its own alliances make New Delhi wary—particularly when combined with Beijing’s propensity to translate political objectives into economic coercion in other theatres.

Third, economic interdependence creates an ambiguous mix of incentives. Bilateral trade is substantial and diversified, yet New Delhi is acutely aware of trade deficits, supply-chain vulnerabilities, and the political backlash that follows perceptions of one-way commercial dependency. That economic relationship therefore encourages engagement even while it generates pressure to “de-risk” critical sectors.

Fourth, multilateral and regional alignments complicate the picture. India’s deeper security cooperation with democracies—seen in formats such as the Quad and growing defence ties with the United States and Japan—has been read by Beijing as part of a containment strategy, even as New Delhi frames its engagements as issue-based partnerships rather than formal blocs.

India’s diplomatic toolkit: strategic autonomy, multi-alignment and calibrated balancing

New Delhi’s response has not been binary. Instead of fully aligning with a single great power, India has doubled down on what policymakers and commentators call “strategic autonomy” or “multi-alignment”: keeping options open, pursuing partnerships across different blocs, and tailoring cooperation to specific interests.

On the one hand, India has strengthened ties with like-minded democracies in defence, intelligence sharing, and technology—moves that enhance deterrence and operational interoperability. On the other, New Delhi continues to engage China at the leadership and ministerial levels, seeking to manage tensions and preserve trade and people-to-people links where feasible. High-level summits and diplomatic channels have recently signalled a cautious reset in ties, with leaders emphasizing development cooperation and the need to keep disputes from spiralling into larger confrontations. Official interactions in 2025 and moves such as the resumption of direct commercial flights are concrete expressions of this pragmatic engagement.

India also invests in “soft balancing”: cultivating alternative institutions and partnerships—BRICS, the Shanghai Cooperation Organisation (SCO), and selective minilateral groupings—to blunt one-sided pressure, diversify its diplomatic options, and retain influence in Asia’s evolving institutional architecture. Meanwhile, New Delhi pursues economic resilience strategies—diversifying manufacturing, bidirectional investment screening, and selective tariffs or restrictions—to reduce strategic exposure in critical technologies.

Finally, New Delhi leverages issue-specific cooperation with China on global topics that require joint leadership, such as climate change, multilateral trade architecture, and counter-terrorism. These overlaps reduce the totality of competition, even if they do not eliminate core friction.

Immediate impacts: what this means for people and businesses

The India–China relationship is not just an abstract strategic puzzle; it shapes lives and livelihoods in tangible ways.

Trade and prices. China is a major supplier of intermediate goods, electronics components, and manufactured goods consumed across Indian markets. Periodic policy shifts—sudden tariffs, import curbs, or heightened scrutiny—can disrupt supply chains and push up costs for producers and consumers alike. That reality has encouraged Indian industry to look for “friendlier” or nearer sourcing alternatives, but transition takes time and investment.

Border communities. In the high Himalayas, skirmishes and troop deployments mean disrupted lives for frontier communities, altered grazing and movement patterns, and periodic restrictions on local economies. Families in these regions often bear the immediate human cost of strategic competition—displacement, uncertainty, and a heavier military footprint in daily life.

Students and people-to-people ties. Educational exchange, tourism, and business travel became limited after 2020; recommencing flights and cultural ties helps ease those barriers, but mistrust can linger. When governments normalize flights or visa policies, it not only restores commercial aviation links but also signals a willingness to rebuild interpersonal connections that support long-term diplomacy.

Political economy. Domestic politics in India treats China warily; incidents along the border are amplified in public debate and used by political actors to press for tougher postures. That shapes procurement choices, regulatory scrutiny of Chinese apps and investments, and the broader industrial policy push to make India a more self-reliant manufacturing base.

Global economic reverberations. Because India is a large market and China a central node in global supply chains, intermittent tensions between the two can create ripple effects in commodity markets, regional trade flows, and investor sentiment—factors that affect employment, inflation, and growth prospects in India and beyond.

The diplomatic tightrope: risks and limits of current strategy

India’s attempt to preserve autonomy while hedging against threat carries trade-offs. Closer security cooperation with the U.S. and Quad partners enhances deterrence but risks alienating countries in India’s immediate neighborhood that have different alignments. Robust de-risking of critical sectors makes longer-term supply chains more resilient but can raise prices or reduce competitiveness in the short term. And while diplomatic resets ease friction, structural differences—mistrust on the border, divergent global visions, and asymmetric military capacities—mean that any calm can be fragile.

Moreover, global geopolitics can upend New Delhi’s calculations. Shifts in U.S. policy, renewed great-power competition, or regional crises could force India into harder choices than its preferred multi-alignment strategy envisages.

Outlook: scenarios for the next decade

Several plausible pathways could shape India–China relations going forward:

1. Managed competition and pragmatic coexistence. This is the baseline the Indian foreign policy establishment prefers: fierce competition on strategic and military fronts, pragmatic cooperation on commerce and global governance, and robust crisis-management channels to prevent escalation. Recent summits and restored flights suggest movement in this direction.

2. Entrenchment of rivalry. If border incidents recur, or if either side perceives the other’s strategic moves as existential, the relationship could harden into sustained hostility, with accelerated decoupling in key sectors, alliance-style security architectures in Asia, and economic volatility.

3. Incremental détente enabled by mutual interests. Shared concerns—global economic stability, climate cooperation, and connectivity in Eurasia—could produce gradual confidence-building measures and limited institutional cooperation, reducing the likelihood of major confrontations but stopping short of full trust.

4. External shock-driven realignment. A major geopolitical shock—another great-power crisis or regional war—could force India either closer to Western security frameworks or push it toward more transactional ties with Beijing, depending on how external actors behave and how domestic politics frame national interest.

Across scenarios, India’s choices will likely emphasize strengthening domestic capacities (defence modernization, critical industries), deepening diversified partnerships (U.S., Japan, ASEAN, Europe), and shoring up multilateralism to limit unilateral coercion.

What to watch next

Policy watchers should track several indicators: border disengagement protocols and troop levels; the tempo and substance of high-level visits; progress on trade measures and flight/visa corridors; defence cooperation and joint exercises with non-Chinese partners; and economic metrics such as trade balances and foreign direct investment patterns. Equally important are domestic political signals that could constrain or enable Government choices, and third-party alignments across South Asia and the Indo-Pacific.

Conclusion

India’s diplomacy toward China is a balancing act between engagement and deterrence. New Delhi seeks to preserve strategic autonomy by diversifying partners, investing in resilience, and keeping diplomatic channels open—while ensuring that security and territorial integrity remain uncompromised. The balance is delicate and will be tested repeatedly: the outcome matters not only to the two Asian giants but to the wider region and global order. How India walks this tightrope—carefully calibrating confrontation and cooperation—will shape Asia’s geopolitics for years to come.