India-China rapprochement: what are the long-term prospects?

China-India relations, which have long been fraught, were further complicated by the 2020 military standoff on the Himalayan border. The political disruption had a significant impact on Chinese companies’ presence in India. And yet, India’s dependence on Chinese imports has increased since. WP4

In this policy brief Bruegel Senior Fellow Alicia García-Herrero and Journalist Nayanima Basu investigate Chinese-Indian relations and the prospects of rapprochment.

China-India relations, which have long been fraught, were further complicated by the 2020 military standoff on the Himalayan border. The political disruption had a significant impact on Chinese companies’ presence in India. And yet, India’s dependence on Chinese imports has increased since. Amid a decelerating economy, India could benefit from Chinese manufacturing investment and job creation. The Modi-Xi ‘rapprochement’ after their encounter at the October 2024 BRICS summit signals that relations could improve. · However, relations are unlikely to fully normalize. While India may be willing to accept targeted investment from China, ongoing security concerns, highlighted by the 2025 India-Pakistan military stand-off, will prevent a complete reset. Even if the Indian economy grows to a similar size as China’s, the relationship will continue to be shaped by the militarized border, India’s asymmetric economic dependence on China and China’s leadership in the Global South. In conclusion, India-China ‘rapprochement’ is possible but will remain fragile and unlikely to be maintained in the long run. This offers opportunities for Europe as a major investor in manufacturing, which is what India needs to eliminate some of the key bottlenecks to growth.

Nayanima Basu is a New-Dehli based Journalist and Author with experience in international relations and geoeconomics.

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