India and China: Can Competition Become the New Normal?

The 2020 crisis in eastern Ladakh changed the way New Delhi looks at Beijing. What had often been treated as one difficult part of a complicated relationship suddenly became the relationship’s central problem. Thousands of troops were deployed along the Line of Actual Control, trust between the two governments deteriorated and the idea that economic ties could continue to grow separately from security concerns became much harder to sustain. Six years later, the question is not whether India and China will compete. They will. The real question is whether they can learn to compete without allowing that rivalry to become a permanent source of instability.

The border changed everything. For India, the border is not just another issue on the diplomatic agenda. It is the foundation of the relationship. New Delhi has repeatedly made it clear that peace and tranquillity along the border are essential if relations are to return to anything resembling normalcy. This is understandable. It is difficult for two countries to build political trust while their soldiers remain deployed against each other in difficult terrain. The border also changed the political mood in India. China is no longer viewed simply as an important trading partner or a neighbouring power with whom India has unresolved territorial claims. It is increasingly seen as India’s principal strategic competitor in Asia. That perception is unlikely to disappear quickly. But there is another reality that India cannot ignore. China is not going anywhere.

India cannot simply “decouple” from China. It is tempting to think that the answer to India’s China problem is straightforward: reduce dependence and move on. In reality, it is much more complicated. China remains deeply embedded in global manufacturing and supply chains. Indian businesses continue to depend on Chinese machinery, components, electronics and industrial inputs across several sectors. India has responded by encouraging domestic manufacturing and diversifying its supply chains. Initiatives such as Make in India and the Production Linked Incentive schemes are part of this broader effort. But diversification takes time. The objective, therefore, is unlikely to be complete economic separation. It is more realistically about reducing vulnerabilities. India wants to be able to trade with China without becoming dependent on China. That is a very different proposition.

The rivalry is moving into the Indian Ocean. The competition between the two countries is also no longer restricted to the Himalayas. Look south from the Tibetan plateau and another contest becomes visible. China has built extensive economic and strategic relationships across India’s neighbourhood. Ports, infrastructure projects, investments and diplomatic engagement have expanded China’s presence across the Indian Ocean and South Asia. India has responded by strengthening its own relationships across the region. Sri Lanka, Maldives, Mauritius, Seychelles, Bangladesh and countries in Southeast Asia have become increasingly important to India’s regional diplomacy. India’s growing engagement with Australia, Japan and the United States has also strengthened its position in the wider Indo-Pacific. This is where India’s relationship with China becomes particularly interesting. India does not want to be surrounded. But it also does not want to become part of a military bloc whose primary purpose is containing China. That brings us to India’s favourite foreign-policy phrase: strategic autonomy.

India does not want to choose sides. India’s growing relationship with the United States is one of the most important developments in Asian geopolitics. Defence cooperation has expanded. So have partnerships in technology, semiconductors, critical minerals, maritime security and supply-chain resilience. There is little doubt that China is an important factor behind some of this closer cooperation. Yet India continues to maintain relationships with Russia and China as well. This can sometimes look contradictory from the outside. For New Delhi, however, it is the point. India does not want to be forced into choosing between Washington and Beijing, or between the West and the Global South. It wants enough relationships and capabilities to make its own choices. That becomes especially visible in forums such as BRICS. India and China may disagree sharply on regional security, but they still sit at the same table when discussing the future of the international order. Cooperation and competition can exist at the same time.

The uncomfortable truth about India-China relations. Perhaps the biggest mistake would be to assume that India-China relations have to end in either friendship or confrontation. International politics rarely works that neatly. India and China have too much geography, history, trade and shared regional interests to completely ignore each other. At the same time, their ambitions are increasingly difficult to reconcile. Both want a greater role in shaping Asia. Both want greater influence in the Global South. Both want a stronger voice in international institutions. And both are watching the other closely. There is therefore little reason to expect a dramatic transformation of the relationship. What is possible, however, is something much less glamorous but perhaps more important: stability.

Learning to live with competition. A stable India-China relationship does not require the two countries to trust each other completely. It requires them to understand each other’s limits. The first step is maintaining peace along the border. The second is keeping military and diplomatic channels open so that incidents do not spiral into larger crises. The third is accepting that competition in the Indo-Pacific and South Asia will continue, while creating enough space for cooperation where interests overlap. This may sound modest. But in a relationship as complicated as India-China, modesty can be a virtue. India does not need to defeat China for its foreign policy to succeed. Nor does it need to accommodate every Chinese demand. It needs to become strong enough that it can engage China without fear, compete with China without panic and cooperate with China when cooperation serves Indian interests. That is probably what strategic autonomy will mean in practice in the coming decade. The India-China relationship is unlikely to become easy. But it does not have to become permanently hostile either. The future may belong to a different kind of relationship: one where competition is accepted as a permanent feature, confrontation is avoided wherever possible and both sides learn that living with each other is not the same thing as agreeing with each other. For India, that may be the most realistic path forward.