Trade is growing, diplomacy is returning, and BRICS offers common ground. But the unresolved Himalayan boundary, China’s partnership with Pakistan and a $112 billion trade deficit still stand between cooperation and strategic trust.
By Mitin Sheth (Shanilohit)
Freelance Senior Columnist |
Author | Geopolitical Analyst
Published: September 17, 2026
Estimated Reading Time: 11–12 minutes
Executive Summary
When Prime Minister Narendra Modi and Chinese
President Xi Jinping met in New Delhi on September 12, on the sidelines of the
BRICS Summit, the message was encouraging. Both leaders spoke about taking a
long-term view of relations. They agreed that differences should not become
disputes. They also discussed trade, business links, mobility and the need to
keep peace along the border.
That was important. India and China cannot afford
permanent confrontation.
But one meeting cannot erase more than six decades of
mistrust.
Behind the New Delhi handshake lies an unresolved
Himalayan boundary, the memory of the 1962 war and the 2020 Galwan clash,
China’s claims over Arunachal Pradesh, India’s claim over Aksai Chin, and
another territorial issue involving Pakistan and the Shaksgam Valley.
Only days after Modi and Xi met, India objected to a
new Pakistan–China Boundary Joint Commission and again rejected the 1963
China–Pakistan Boundary Agreement. That development brought an old question
back into focus.
China wants better relations and more trade with
India. India also has strong reasons to keep the relationship stable. But can
the two countries build strategic trust while their maps remain different and
China continues its deep strategic partnership with Pakistan?
That may be the real test of the latest India–China
reset.
***
A New Handshake, an Old Question
The Modi–Xi
meeting in New Delhi was significant for more than its optics. It was Xi’s
first visit to India in seven years, and it came after one of the most
difficult periods in India–China relations in decades.
The official
Indian account of the meeting was positive but carefully worded. Modi and Xi
welcomed the progress made since their previous meeting in Tianjin in August
2025. They agreed that relations should be viewed from a strategic and
long-term perspective and that differences should not be allowed to become
disputes.
But Modi also
made an important point: peace and tranquillity along the border remain an
essential basis for the continued development of India–China relations. Both leaders
again committed themselves to seeking a “fair, reasonable and mutually
acceptable” solution to the boundary question.
Those words
reveal both the opportunity and the problem.
India and China
clearly have reasons to cooperate. They are two of Asia’s largest economies.
They are nuclear powers. They share a long border. They sit together in BRICS
and the Shanghai Cooperation Organisation. Both want greater influence for
developing countries in global institutions.
Yet cooperation
is not the same as trust.
For India, the
question has always been whether agreements reached at the negotiating table will be matched by behaviour on the ground.
The Long Shadow
of 1962
India–China
relations did not begin with hostility. The early years after Indian
independence and the Chinese revolution were marked by considerable optimism.
Panchsheel and the popular phrase Hindi-Chini Bhai-Bhai reflected the
hope that two old Asian civilisations could build a new relationship.
The boundary
dispute changed that.
Tensions over
Tibet, competing interpretations of the frontier and the deterioration of
political trust eventually led to the 1962 war. Its impact on Indian strategic
thinking has never completely disappeared.
Relations
eventually recovered. The clashes at Nathu La and Cho La in 1967 showed that
the military balance on the frontier was no longer the same as in 1962. Rajiv
Gandhi’s visit to China in 1988 opened another period of engagement. Agreements
in 1993 and 1996 created mechanisms intended to preserve peace along the Line of
Actual Control, or LAC.
Trade then grew
at extraordinary speed.
For a time, it
appeared that India and China had found a workable formula: manage the border
dispute while expanding the rest of the relationship.
Doklam in 2017
exposed the weakness of that assumption. Galwan in June 2020 damaged it far
more seriously. Twenty Indian soldiers were killed in the clash; China later
acknowledged four deaths on its side. Relations entered a deep freeze, troops
were deployed in large numbers and India imposed restrictions in several areas
of economic engagement.
The situation
has improved since then. Disengagement arrangements and renewed political
contact have reduced immediate tensions. But the dispute itself has not
disappeared.
The Map Behind
the Handshake
Geography matters because several territorial questions are often mixed
together.
In the western
sector, India’s official position is that China occupies approximately 38,000
square kilometres of Indian territory in Ladakh, including Aksai Chin.
In the eastern
sector, China claims approximately 90,000 square kilometres of territory
that India administers as Arunachal Pradesh. India rejects that claim and
considers Arunachal Pradesh an integral part of the country.
There is also
the Pakistan dimension. Under the China–Pakistan Boundary Agreement of 1963,
Pakistan transferred approximately 5,180 square kilometres in the
Shaksgam Valley, also known as the Trans-Karakoram Tract, to China. India does
not recognise the agreement and maintains that Pakistan had no legal right to
transfer territory claimed by India. These figures reflect the Indian
government's stated position.
Aksai Chin and
Shaksgam should not be confused. Pakistan did not transfer Aksai Chin to China
in 1963. They are separate territorial questions.
But together
they show why the India–China boundary problem cannot be separated completely
from the China–Pakistan relationship.
And events
immediately after the BRICS Summit have made that connection relevant again.
The Pakistan
Question Returns
Only days after
the Modi–Xi meeting, India objected to the Pakistan–China Boundary Joint
Commission after its first meeting in Islamabad.
New Delhi said
the commission had no legal basis where India-claimed territories were
concerned. It again rejected the 1963 China–Pakistan Boundary Agreement and
reiterated its position that Jammu and Kashmir and Ladakh are integral parts of
India. India also continues to oppose the China–Pakistan Economic Corridor, or
CPEC, because parts of the project run through territory India claims in
Pakistan-administered Kashmir.
The timing
creates an uncomfortable contrast.
On September
12, Modi and Xi talked about mutual respect, mutual sensitivity, and a
mutually acceptable boundary settlement.
Within days,
India was again objecting to Chinese dealings with Pakistan involving territory
at the centre of India’s sovereignty claims.
This does not
mean China must choose India or Pakistan.
That would be
too simple.
China’s
relationship with Pakistan has developed over decades. It includes defence
ties, infrastructure, economic investment, diplomatic cooperation and strategic
geography. Pakistan gives China a close partner in South Asia and access to
important connectivity projects. CPEC has added another layer to that
relationship.
At the same
time, India offers something entirely different: a much larger market, growing
economic power, an important position in the Global South, influence in the
Indian Ocean and an independent voice in an increasingly divided international
system.
Beijing
therefore has strong reasons to seek better relations with New Delhi without
weakening its relationship with Islamabad.
The harder
question is whether those two Chinese objectives can remain compatible when
they meet on disputed territory.
That is where
the latest India–China reset faces one of its most difficult tests.
A $112 Billion
Warning Inside a $151 Billion Relationship
The economic
relationship presents another paradox.
India–China
goods trade reached $151.10 billion in FY2025–26. India exported $19.47
billion to China while importing $131.63 billion. This resulted in a $112.16
billion trade deficit for India. These are figures published by the Embassy
of India in Beijing using Indian trade data.
Those numbers
show why simply describing China as either a friend or an enemy is inadequate.
China is one of
India’s most important sources of goods and industrial inputs. Indian companies
depend on Chinese supplies, from electronics and machinery to
components used in manufacturing.
The economic
relationship therefore creates both opportunity and dependence.
This is why
trade featured prominently in the Modi–Xi talks. Both sides acknowledged
concerns over structural trade imbalances, supply chains and market access.
For India, the
question is not whether all trade with China should stop. That is neither the
issue the two governments are discussing nor an easy economic proposition.
The more
relevant question is how India manages a relationship in which trade is
valuable, but dependence in critical sectors can create strategic risk.
The answer will matter far beyond bilateral trade statistics.
BRICS:
Partners, Competitors or Both?
The New Delhi
BRICS Summit showed how India and China can cooperate even while important
disagreements remain unresolved.
Both countries
want changes in global governance. Both want developing countries to have a
greater voice. Both speak about a more multipolar international order.
But they do not
necessarily imagine that future in exactly the same way.
At the New
Delhi summit, Xi proposed deeper BRICS cooperation in trade, artificial
intelligence, finance and other areas. China will chair BRICS in 2027. The
expanded grouping therefore gives Beijing another platform to
increase its influence among emerging economies.
India also
benefits from BRICS. It gives New Delhi a platform to represent its views on
global governance, development and the Global South without entering a formal
alliance system. The 2026 New Delhi Declaration reaffirmed BRICS support for a
more representative and reformed international system.
This creates a
fascinating question.
China may
welcome an India that supports a multipolar world and resists pressure to
choose permanently between rival blocs.
But would
Beijing be equally comfortable with an India powerful enough to become an
independent Asian pole in that multipolar world?
Summit declarations alone cannot answer that question.
It will be
answered over time through Chinese behaviour—on the border, in the Indian
Ocean, in South Asia, in global institutions and in its economic relationship
with India.
The Larger
Contest With America
Another dimension cannot be ignored: the strategic competition between
China and the United States.
Michael
Pillsbury’s 2015 book The Hundred-Year Marathon argued that China’s
strategic ambitions should be viewed over decades and that Beijing ultimately
seeks to replace American primacy. It is an influential but contested interpretation;
other China specialists have questioned the evidence behind parts of the
thesis.
One does not
need to accept every part of Pillsbury’s argument to recognise a larger
reality.
China and the
United States are competing across trade, technology, artificial intelligence,
military power and global influence. Their AI rivalry alone has become closely
linked to questions of economic and military advantage.
India matters
to both.
For Washington,
a stronger India can help balance power in Asia so China
does not become overwhelmingly dominant.
For Beijing, an
India that maintains strategic autonomy rather than becoming part of an
American containment strategy has obvious value.
But India has
its own interests.
Its
relationship with the United States does not have to be defined entirely by
China, just as its relationship with China does not have to be defined entirely
by Washington.
That is where
strategic autonomy becomes more than a diplomatic phrase.
India’s
long-term position will depend on whether it can build enough economic,
technological, diplomatic and military strength to protect its freedom of
action in a world increasingly shaped by US–China competition.
Cooperation Is
Possible. Trust Is Harder.
India and China
do not need to agree on everything in order to cooperate.
They can trade.
They can negotiate. They can work together in BRICS. They can cooperate on
selected global issues. They can improve travel and business links. They can
continue military and diplomatic talks aimed at reducing the danger of another
border confrontation.
All of that is
useful.
But trust
requires more.
For India, the
strongest test will remain the border.
If peace holds,
agreements are respected and meaningful progress is made towards a boundary
settlement, the political space for a broader relationship can grow.
If border
tensions return, summit diplomacy will again struggle to carry the weight of
the relationship.
Pakistan makes
the equation still more difficult. Beijing may believe that it can deepen
relations with India while maintaining its strategic partnership with
Islamabad. From China’s perspective, the two relationships need not be mutually
exclusive.
India sees an
additional problem when China–Pakistan cooperation touches territory claimed by
New Delhi.
That difference
cannot be solved through trade alone.
Conclusion: Beyond the Handshake
The Modi–Xi
meeting in New Delhi matters.
After Galwan
and years of mistrust, dialogue is better than confrontation. A stable
relationship between India and China would reduce risks across Asia and create
room for economic and diplomatic cooperation.
But a reset is
not a settlement.
Aksai Chin
remains disputed. China continues to claim Arunachal Pradesh. India continues
to reject the 1963 China–Pakistan Boundary Agreement and the transfer of the
Shaksgam Valley. CPEC remains tied to a sovereignty dispute. And China’s
strategic partnership with Pakistan is unlikely to disappear simply because
Beijing wants better relations with New Delhi.
Perhaps the
wrong question, therefore, is whether China will sacrifice Pakistan for India.
There is little
reason at present to assume that Beijing sees such a choice as necessary.
The more
important question is whether China can deepen its relationship with India
while maintaining policies towards Pakistan and the Himalayan frontier that
India regards as conflicting with its territorial interests.
The answer will
not come from one summit.
Nor will it
come from trade figures or carefully worded declarations.
It will come
from what happens on the ground.
India and China
can cooperate where their interests meet. They can compete where those
interests differ. The difficult task for both countries is preventing
competition from turning into confrontation while continuing to negotiate the
disputes that divide them.
For India, the
China question is therefore larger than trust alone.
It is about
understanding where cooperation is possible, where dependence creates risk,
where deterrence remains necessary and where history still matters.
And beyond
China lies an even larger challenge.
As competition
between Beijing and Washington grows, India will increasingly find itself
important to both.
The real
measure of India’s strategic autonomy will be whether it can remain strong
enough to work with either without allowing either to decide its choices.
About the
Author
Mitin Sheth
(Shanilohit) is an Indian
author, geopolitical analyst and strategic book reviewer who has been
associated with the Janmabhoomi Group of Newspapers as a freelance Senior
Columnist for more than 25 years. He has written extensively on international
affairs, geopolitics and strategic issues. His work also focuses on defence and
military affairs, emerging technologies, global security, and India’s evolving
role in the international order.
Selected References
Prime Minister of India- PM’s Bilateral Meeting With Chinese President Xi Jinping, September 12, 2026.- https://www.pmindia.gov.in/en/news_updates/pms-bilateral-meeting-with-chinese-president-xi-jinping-2/?
Prime Minister
of India — BRICS New
Delhi Declaration, September 12, 2026- https://www.pmindia.gov.in/en/news_updates/pms-bilateral-meeting-with-chinese-president-xi-jinping-2/?
Embassy of
India, Beijing — India–China
Trade and Economic Relations- https://www.pmindia.gov.in/en/news_updates/brics-new-delhi-declaration-building-for-resilience-innovation-cooperation-and-sustainability-september-12-2026/?
Press Information Bureau — Government of India Statement on the India–China
Boundary Question- https://www.eoibeijing.gov.in/page/trade-and-economic-relation/?
Reuters-India–China Relations: From Conflict to Cautious Thaw-
https://www.reuters.com/world/china/india-china-relations-conflict-cautious-thaw-2026-09-12/?
Reuters — Advantage China in New Delhi’s BRICS Summit?-
The Indian Express — India Rejects Pakistan–China Boundary Joint
Commission-https://indianexpress.com/article/india/has-no-legal-basis-india-rejects-pakistan-china-boundary-commission-10881333/?
Disclaimer
This article is
an independent analysis based on publicly available information, official
statements, credible media reports, and open-source research. It is intended
for informational and analytical purposes only. The views and interpretations
expressed are those of the author. While I have made every effort to ensure
factual accuracy, developments may change as new information becomes available.
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This is an
independently researched and authored analysis. Advanced digital tools and AI
were used solely for supplementary support tasks, including research
cross-referencing, translation verification, image generation, and grammatical
refinement. The core analytical insights, strategic conclusions, and creative
direction are entirely the author’s own.
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