In May 2020, the Sino-Indian border around the region of Ladakh saw military tensions between the two countries boil over into a deadly skirmish that killed 20 Indian personnel and at least four Chinese soldiers. While the skirmish was ignited over minor road developments, the reactions from both sides have been incendiary, with India strengthening its relationship with the Quad (United States, Australia, and Japan) and banning 59 Chinese phone apps (220 by 2020), and Beijing refusing New Delhi’s demands to restore the territorial status quo in Ladakh. As a result, the need for India to assess its China policy in a world where its neighbour is a global superpower is imperative. This article, therefore, engages with India’s need to adapt into the coming decade. 

The clash at the border had been a release of nearly a decade’s worth of military build-ups and tensions over contested territories, made worse by China’s alliance with Pakistan and India's deterioration of relations with the latter over the constitutional status of Kashmir. With the very real threat of terrorist attacks against India from groups with ties to Pakistan, New Delhi is anxious about how Chinese support may escalate future conflicts. In 2019, India responded to a terrorist incident by bombing targets within Pakistan, beginning a wave of tit-for-tat retaliation strikes that only ended with threats of nuclear-capable missiles from India. Meanwhile, Beijing’s strategic partnership with Islamabad has grown in recent years through the China-Pakistan Economic Corridor (CPEC). Such developments have made India increasingly wary of a hostile military alliance on its borders. Consequently, and rather reluctantly, India has strengthened its relations with Western allies. It allowed Japan and Australia to participate in its Malabar naval exercises with the US in 2020, acknowledging the Quadrilateral Security Agreement as a military strategic alliance more openly than before. Expectedly, this has heightened tensions with China which has simultaneously partnered closer with Russia against the US and its allies. For the first time, the term ‘US allies’ is increasingly being used to include India. 

Such tensions have also manifested within economic the two nation’s economic relationship. China’s Belt and Road Initiative (BRI), with CPEC at its helm, is opposed by India due to fears that it will undermine and violate India’s geopolitical influence in the region, and even its sovereignty. This has already been seen in territories such as Kashmir and Jammu, which are contested by Pakistan and China respectively, where the latter has initiated infrastructure projects. Moreover, New Delhi is apprehensive of the BRI’s ambiguity, lack of transparency, and consultation with the relevant stakeholders. This goes in hand with adjacent fears about China’s growing military presence in the Indian Ocean. There are strong fears that the BRI will lead to a debt trap and political insecurity, delivering India’s neighbouring states, such as Sri Lanka, Myanmar, and Bangladesh into a form of Chinese neo-colonialism – thus undermining New Delhi’s previously centripetal position in South Asia. Nepal, for example, has exploited the tensions between China and India to claim disputed territory in the Pithoragarh district which India has reserved control of for decades. Nepal has been able to use its ties with China to punch above its weight, welcoming economic and military ties as a platform to spar with a neighbour 22 times its size. India has been forced to counter China’s ‘charm offensive’ with its own diplomatic and financial manoeuvring to undermine Chinese efforts, meaning South Asian middle states now wield considerable influence through playing the rivals against each other to secure trade deals, investments, concessions, and support. 

Summarily, New Delhi is faced with the dilemma of either constructing policies to compete with China’s growing sphere of influence in the region - which risk alienating the country from its neighbours - or involving itself as a reluctant economic partner of Beijing. Even despite territorial tensions, both countries have continued to pursue economic development and cooperation projects, advocated jointly for the reform of global economic institutions, partnered in the New Development Bank, and collaborated at BRICS summits and the Shanghai Cooperation Organisation. The most notable instance of such cooperation was China’s support of India’s opposition to the proposal of banning coal at the COP26 summit in November 2021. Moreover, whilst tensions over the Ladakh region were still prevalent, and despite the COVID-19 pandemic, trade between the two countries increased by 43 per cent in 2021. 

It is clear that New Delhi is pursuing a balance with China. It has realised it must do more to compete with the superpower, through strengthening ties with allies outside the immediate region, and enticing economic partnerships with its neighbours away from its rival. Despite this, India has acknowledged that economic cooperation with China is both necessary and inevitable. This leaves the Sino-Indian relationship in a place of uneasy stalemate, even in the face of economic competition, military escalation, and mounting regional tensions.