Blitz Bureau
NEW DELHI: In recent years, India has adopted a strategic and measured approach in dealing with China, particularly in light of ongoing tensions along the Line of Actual Control (LAC) in eastern Ladakh. The 2020 Galwan Valley clash, which resulted in casualties on both sides, marked a pivotal moment in India-China relations and pushed border disputes to the forefront of India’s national security agenda. Since then, India has pursued a dual strategy: defending its territorial integrity while maintaining open channels for dialogue with its powerful neighbor, all while navigating the economic implications of this complex relationship.
Military vigilance amid border tensions
The standoff in Ladakh has been a test of India’s military preparedness and strategic resilience. Following the Galwan clash, the Indian Army has bolstered its presence along the LAC, reinforcing positions and improving infrastructure in the region. India’s military has remained on high alert, ready to counter any further provocations, while also seeking to avoid a full-blown conflict. This approach highlights India’s commitment to defending its territory while still pursuing a peaceful resolution.
Under the leadership of National Security Advisor Ajit Doval and External Affairs Minister S. Jaishankar, India has deftly balanced military vigilance with sustained diplomatic engagement. The border tensions have led to numerous high-level military talks between the two nations, including several rounds of Corps Commander-level discussions aimed at resolving issues at key friction points along the LAC. Simultaneously, diplomatic talks through the Working Mechanism for Consultation and Coordination (WMCC) have facilitated the exchange of concerns and potential resolutions.
Diplomatic channels
India’s diplomatic strategy has been defined by resilience and a commitment to finding a peaceful resolution to the border dispute. This approach was reaffirmed during the 31st round of talks held in August 2024, when both countries agreed to maintain open lines of communication and continue working toward disengagement at critical points along the LAC. Despite the protracted nature of the standoff, India has remained steadfast in its stance: any long-term solution to the border issue must be based on restoring the status quo and respecting previously signed agreements.
External Affairs Minister Jaishankar has repeatedly emphasized the importance of peace and stability at the border as a precondition for broader progress in India-China relations. During a speech at the Asia Society in September 2024, Jaishankar underscored the need for de-escalation, warning that without a resolution to the border tensions, it would be impossible to restore normalcy in the overall bilateral relationship.
The impact on business and trade
The border tensions between India and China have not only tested their military and diplomatic strategies but have also had significant economic repercussions. China is one of India’s largest trading partners, with bilateral trade exceeding $135 billion in 2022. However, the border dispute has introduced strain into this economic relationship, complicating trade dynamics and casting a shadow over business ties.
In the immediate aftermath of the Galwan clash, the Indian Government imposed a series of measures targeting Chinese companies and imports. These included banning over 200 Chinese mobile apps, such as TikTok, citing concerns over data security and sovereignty, and increased scrutiny of Chinese investments in Indian companies, particularly in sensitive sectors such as technology and telecommunications. India also took steps to reduce its reliance on Chinese goods by promoting the Aatmanirbhar Bharat (self-reliant India) initiative, aimed at boosting domestic manufacturing.
At the same time, India has continued to recognize the economic reality that China is a key player in its supply chain for industries such as electronics, pharmaceuticals, and telecommunications. The challenge for India has been finding a balance between addressing its strategic and security concerns while mitigating any disruptions to its economic growth.
While bilateral trade has not completely collapsed, it has certainly faced disruptions. Imports from China, which account for a significant share of India’s electronics and pharmaceutical raw materials, have been affected by the tensions. Indian industries dependent on Chinese imports have been forced to explore alternative sources, albeit at higher costs. Simultaneously, Chinese companies have also faced difficulties operating in India, with delays in project approvals and heightened scrutiny of contracts.
However, despite the border tensions, India has not sought a full decoupling from China. The Indian government has maintained that it seeks a calibrated approach, aimed at reducing overdependence on Chinese goods without completely severing economic ties. This pragmatic stance reflects India’s recognition that while the border dispute is a major issue, the economic relationship with China remains crucial to India’s growth trajectory.
Strategic patience and economic realities
One of the defining aspects of India’s approach to the China border issue has been its strategic patience, combining military readiness with a long-term diplomatic and economic vision. India has been careful to avoid any actions that might escalate the situation into a broader conflict, while at the same time ensuring that its military forces remain fully capable of defending its territory.
India’s patience is evident in the incremental progress made through the WMCC and Corps Commander-level talks. The August 2024 round of negotiations reaffirmed both sides’ commitment to dialogue, showing that despite the difficulties, there remains a mutual interest in de-escalation. However, India has been clear that normalization of ties with China will require more than just talk—it will require concrete actions from China to demonstrate its commitment to restoring peace at the border.
At the same time, the economic relationship between the two countries continues to evolve. While border tensions remain a significant hurdle, India’s strategic goal has been to reduce its dependency on China over time, without completely severing ties. This nuanced approach reflects India’s broader economic strategy: promoting self-reliance while staying integrated within global supply chains, including those that involve China.
India’s diplomatic and strategic approach toward China over the past few years has been one of resilience, pragmatism, and economic realism. By combining military preparedness with sustained diplomatic efforts, India has managed to protect its territorial integrity while keeping avenues for dialogue open. Although the ongoing border tensions present a significant challenge, India’s ability to navigate both security concerns and economic realities reflects its maturity as a key regional and global power.
