The crisis in India-China relations



India-China relations remain in crisis at the end of 2021. The entire Line of Actual Control (LAC) is live, over 100,000 troops from both countries will spend another winter at inhospitable heights along the Himalayan border, and the relationship is marked by distrust as deep as in the sixties.

Today, the factors causing stress in India-China relations outweigh the common interests and understandings that could introduce an element of predictability in the relationship. What are these factors and is there a way to minimize the unproductive effort and risks of conflict that they induce?

The proximate cause of the present situation, of the heightened risk of conflict and an uncertain future, is the Chinese PLA’s attempt since spring 2020 to change the ground situation along the LAC, thus calling into question the legally binding commitments that China made in the 1993 Border Peace and Tranquility Agreement and thereafter, to maintain the status quo on the border.

The deaths in the Galwan valley in June 2020 of 20 Indian troops and at least four Chinese soldiers were the first on the border in 45 years. Indian troops have been prevented from patrolling where they did before for many years, and satellite pictures show the changed situation created by the Chinese build-up of troops, infrastructure, and villages on Indian territory. This is particularly worrying in sensitive areas like the Depsang plains but is not confined to one or two areas or sectors, extending to the Arunachal Pradesh border as well. Both sides have, since spring 2020, built up permanent infrastructure to support troops and operations all along the line.

PLA actions in 2020 were the culmination of a series of escalating incidents and face-offs along the border in the last decade. In 2013 PLA troops intruded in Depsang and setup camp but Indian actions led them to vacate the area after two and a half weeks. In September 2014, while President Xi Jinping was visiting India, Chinese troops intruded in large numbers in Chumar. And in 2017, the PLA attempted to build a road on Bhutanese territory in the Doklam plateau, leading to a stand-off with Indian troops that lasted for 72 days. The series of incidents, escalating in size and nature, culminated in the deaths in the Galwan valley in 2020.

There is no indication that a way out of the present military stand-off is imminent or likely. The Government of India seeks the restoration of the status quo and is ambiguous on accepting a new border management arrangement involving buffer zones and separation of forces as a first step. China, however, has indicated no flexibility, and expects withdrawals to be from the new reality that she has created. This would amount to China keeping what she has gained by stealth and force. An arrangement was negotiated and implemented in February 2021 around the Pangong Tso, where India had riposted to Chinese moves forward north of the lake by occupying heights in the Kailash Range south of the lake. Since these dominated Chinese concentrations and positions, a mutual withdrawal was negotiated, creating a buffer zone of sorts, but not quite restoring the status quo. But along most of the border the stand-off continues.



The operational problem on the border is that if one is to defend every inch of that long border, one must be stronger than the adversary at every possible point of ingress. The attacker, on the other hand, only has to be stronger where he chooses to take the initiative. The defender is therefore forced by the logic of this circumstance to a strategy of ripostes, of taking territory elsewhere when the adversary moves in one area. There is thus a built-in logic of escalation in this situation, unless there is a rough and effective balance of forces along the border to deter adventurism. Clearly, that deterrence broke down in spring 2020 and needs to be restored.

Besides, China is signalling a steady hardening of its stance on the border. After eight months of official silence, (though the ‘Global Times’ and Chinese netizens had a field day commenting on the clashes) the Chinese state is now releasing video and commentary to buttress its version of events and glorify the PLA, arousing nationalist sentiment, and publicizing all that it is doing to strengthen its control of the Himalayan borderland. By passing a new land border law in late 2021, China has made it harder to negotiate a settlement of these issues, since they are now framed as sovereignty questions, which are sacred and inviolable. This is in contrast to the past when China spoke of the boundary as a dispute left over from history, therefore something that could be settled by give and take through negotiation. The newly stepped-up nationalism of Xi Jinping’s China has made territory and sovereignty non-negotiable, and this now has official sanction in Chinese law and official propaganda.


This brings us to a second source of stress in India-China relations – China’s internal politics and trajectory. It is difficult to believe that the Chinese decision to change the status quo all along the line and to flout existing agreements and protocols for border management was purely a military one, taken for tactical or local military considerations. It has to have been a decision taken at the top of the Chinese system, for political, strategic, and other considerations.

The move was undertaken just after the Covid pandemic first became known, when the Chinese regime was under pressure at home and abroad for having first suppressed information about Covid, and when its competence was in doubt. There were several signs at the time that the regime was under internal pressure and divided. External diversions such as tension on the Indian border, the crackdown on dissent in Hong Kong, and stepped-up anti-US rhetoric were probably useful to a leadership under siege.

By the end of April, however, the CCP leadership seems to have united in the face of public and foreign criticism and pressure and agreed on a changed direction in China’s domestic politics, that is now becoming evident in a stress on an increasingly self-reliant ‘dual circulation’ economy, on ‘Common Prosperity’ addressing inequalities, and in stronger CCP control of all sectors including the hitherto booming giant tech firms. All in all, we are dealing with a China where regime legitimacy is increasingly tied to nationalism, indeed to a form of hyper-nationalism.

Third, there were imbalances and opportunity for China built into the India-China relationship that encouraged Chinese risk taking on the border in 2020. Previous agreements and protocols to preserve the status quo had worked for almost thirty years, keeping the peace and the border roughly as it was and where it was. But in that time, the relative balance of power between India and China changed. From a rough equivalence in the eighties in the size of their economies, their technological levels, and their integration into the global economy, today the Chinese economy is four times larger than India’s, is technologically more advanced, and is much more integrated into global markets and supply chains, most of which pass through China. The economic rise of China has fuelled a signifiant military build-up by the PLA in the last thirty years. The imbalances these created could have tempted China to change the ground situation on the border when she could, when India was preoccupied with responding to the Covid pandemic, and when the world was distracted.



One consequence of the growing economic gap between the two countries has been the creation of Indian economic dependencies on China. There have been calls for economic decoupling from China after the border clashes, but that seems neither possible nor in our interest. China is now India’s largest trading partner, having overtaken the USA in 2020, the year of the clashes. And India-China trade in 2021 has set new records, crossing US$ 100 billion by October. India’s export production has become more dependent on China in the last two decades. China’s percentage share of value added in Indian exports has risen from 6.2% in 2000 to 25.8% in 2018, according to UNCTAD. By 2019 dependence on China had grown considerably in important sectors such as pharmaceuticals (68% of APIs), auto parts, electronics, telecom gear and power equipment.

Decoupling does not, therefore, seem a viable alternative in any reasonable time frame such as, say, less than ten years. Instead, India might limit dependence on China, first turning elsewhere rather than inward; build Indian manufacturing through self-reliance not autarchy; and use such leverage as we have in the relationship, particularly in Chinese project exports. India contributes 16% of China’s overall trade surplus. Between 2000 and 2018 the Chinese trade surplus with India grew 291 times! This should constitute leverage, as should access to the Indian data market. While we cannot turn our back on China now when China is the major source of growth in the world economy, we can certainly rebalance the economic relationship. But that would also mean a much more active economic integration of the Indian economy with that of the region and the rest of the world, and in global value chains, not walking away from RCEP and raising tariffs as we have done recently.



The international situation has also contributed to instability in India-China relations, in two respects – worsening China-US relations and China’s rising stakes in the subcontinent. For some years Chinese scholars and officials have questioned whether India is still non-aligned or neutral – a code for saying that India has chosen to align with the US against China. At a time when China is facing much stronger US pushback to her assertive policies under both Presidents Trump and Biden, this conclusion would have removed any restraining Chinese concern about pushing India into a closer alignment with the US. Besides, the worse China-US relations became, the higher the incentive for China to try to pacify or control her periphery and neutralize US influence in it.

The Indian subcontinent, like Korea, is one of the few parts of her periphery where China cannot be confident of getting her way and faces a strong local power with its own ideas and interests. The subcontinent has become much more important to China over time. Pakistan may have initially been important to China as a check on India. Today, Pakistan hosts the flagship BRI project, the China-Pakistan Economic Corridor, Gwadar offers the PLA Navy a base at the mouth of the Persian Gulf from where her oil supplies flow, Pakistan is critical to managing international Muslim reactions to China’s actions against the Uighurs in Xinjiang, and Pakistan’s links with the Taliban offer hope of preventing Uighur separatists from finding bases and training in Afghanistan.



South Asia as a whole has also become increasingly important to China: Nepal for Tibet at a time when China has stepped up attempts to assimilate Tibetans into Han culture; Bhutan as a potential crack in India’s Himalayan wall; Sri Lanka and the Maldives for their strategic positions astride the Indian Ocean sea-lanes, and Bangladesh for its proximity to India and Myanmar, China’s other corridor to the sea apart from Pakistan.

The result is China’s stepped-up commitment to Pakistan, her raising Kashmir at the UN Security Council in 2020, for the first time in over forty years, after we read down Article 370, and her active pursuit of a strategic foothold in the ports, economies and politics of the subcontinent and the Indian Ocean region in the last decade. And these relationships in the subcontinent, to which China has committed over US$ 100 billion in BRI projects and funds, serve to limit India’s influence and ability to create outcomes in its own periphery. China’s moves on the border with India could well also be an attempt to show our neighbours that they cannot rely on India for their security, since India has its hands full taking care of itself, and that not very successfully.



With China itself, it seems likely that the relationship will continue to exhibit a combination of engagement and competition, though the balance between them may continue to shift. However, since the border clashes in 2020, none of the stress factors in the relationship have been mitigated. Nor have they mutated into a more benign form. What might India do to respond to these challenges and to improve the situation?

India’s first reactions to the spring 2020 Chinese actions were naturally to stabilize the military situation on the border, strengthening troop deployments, hasten infra-structure build up, and, in August-September 2020, to occupy heights in the Kailash Range south of Pangong Tso. Public opinion in India turned strongly against China, convinced that China had once again betrayed India, as in 1962, and there were calls for a boycott of Chinese goods. The government imposed a prior approval requirement on Chinese investments in India, limited Chinese participation in government procurement and the bidding for India’s transition to 5G, and banned several Chinese apps.

Government of India’s public statements on the relationship with China and the need for China to restore the status quo have become stiffer with time. Externally, government of India opened a back-channel with Pakistan and both countries recommitted to the ceasefire of November 2003, which had not been observed for almost a decade, thus seeking to limit the possibility of a two-front collusive conflict with both China and Pakistan at the same time. Since then, the situation on India’s borders with both China and Pakistan has settled into an armed confrontational stalemate that raises uncertainty and the risk of armed conflict escalating by miscalculation or design.



A way ahead must begin by addressing the causes of stress to stabilize India-China relations. Immediately making the relationship more predictable and less accident prone by working out crisis management measures would be a useful beginning to the larger process of addressing the China challenge. Much of what is needed is long-term, and some is not in India’s hands. But there is still much to be done.

To begin with, self-strengthening is essential. In my experience, China operates on her perception of the relative balance of power or correlation of forces. Military reform in India, which has begun but needs to be continued and carried through, strengthening our manufacturing capabilities and economic weight in the world, and internal cohesion are the essential bases without which no amount of clever diplomacy or active politics will meet the multiple challenges that China poses to India today.

While the long-term goal must be to eliminate power imbalances in the relationship, in the short term we might seek to reduce economic dependencies on China and build a more balanced economic relationship, using such leverage as is available to us.

With China itself, if the relationship is to recover from the present crisis and find a new equilibrium where it is both stable and predictable, a sustained strategic dialogue at authoritative levels would be necessary to establish each side’s core interests, where they are in conflict and how to settle or manage them. Prime Minister Modi and President Xi Jinping met 18 times before the clashes, but not since then. A new strategic dialogue could prepare for the leaders to meet again and attach their prestige to any new strategic framework for the relationship. Should the dialogue not result in a new understanding of the way forward for the relationship, or China be reluctant to enter into such a dialogue, that in itself would be useful to know. We would then draw the appropriate conclusions and act accordingly. A way forward should also seek to shape the environment so as to influence Chinese behaviour.



It is important that India step up its contribution to our neighbours’ prosperity and security, ensuring that we are a factor of stability in the subcontinent and the Indian Ocean region. This requires a closer integration of economies, connectivity in various forms, and building on the affinities that history, geography, and a common culture have given us. It does not require India to imitate China or to do what they do best, but to concentrate on the considerable comparative advantages that we enjoy in our immediate neighbourhood. To do so would be in our own self-interest, for without a peaceful periphery our task of developing and transforming India will only get harder.

In the broader Asian neighbourhood, we would continue to work with other powers such as ASEAN, Japan, Indonesia, Singapore, Vietnam, Australia, and others on our critical shared interests, such as maritime security. For instance, the PRC attempt to territorialize the South China Sea could affect freedom of navigation in an international waterway that carries 38% of India’s foreign trade. It is clearly in India’s interest to work with others to keep the South China Sea and maritime Asia in general free, open and safe. The USA is a critical partner in this effort, and also for the transformation of India. Similarly, for our continental interests in Eurasia, we would need to work with Russia, Iran and other partners.

But a policy of active political, security and defence engagement with our Asian neighbours would need to be complemented by active economic engagement with them. We cannot walk on one leg. Our economic integration with them and openness to them will influence the success of our political and defence outreach.



Is it possible to work simultaneously with multifarious partners, such as Russia and the US and Iran and Japan, not all of whom enjoy particularly warm relations with each other? One solution to that problem is issue-based coalitions of the willing, including those partners who are willing and able to contribute in groupings to achieve outcomes on specific issues. Transnational issues, such as maritime security, cyber security, climate change, pandemics, and nuclear risks, for instance, are all beyond the capability of one or a small group of powers to solve and settle. The answer would seem to lie in a variable geometry of coalitions which address these issues, as we found in dealing with and largely eliminating piracy off the Malacca Strait and off the Horn of Africa.

If this sounds like a wide-ranging agenda of tasks, it is because China poses challenges to Indian policy across multiple domains. The response too has therefore to be multifaceted. Reducing the heightened risk of conflict, unpredictability and instability in the relationship is the immediate priority, and that requires a broad effort. Nothing short of a grand strategy, integrating national effort across domains, iterative, flexible and realistic, will do.