Caution and calculus: How India sees China in 2026
As India heads into 2026, it balances diplomacy and vigilance with China. Past strategic moves have fostered a trust deficit, making Delhi cautious even as both nations seek engagement and regional influence, says Indian academic Rishi Gupta.
The year 2025 would be marked as a year of normalisation for India-China relations, beginning with promising conversations and agreements on resolving the border conflict and maintaining peace and tranquillity along the Line of Actual Control (LAC).
While the talks progressed around the agreement signed in October 2024 on disengagement of the militaries at the LAC, the much-awaited historic visit by Indian Prime Minister Narendra Modi to China in August 2025 after a six-year gap, and his meeting with Chinese President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO), was the key highlight.
Balancing cooperation and strategic distrust
Later that year, after a five-year hiatus, the two sides resumed direct flights, with India further easing the visa issuance process for Chinese nationals — measures initially disrupted by Covid-19 and later by the 2020 Galwan conflict. Although the talks came late, both sides recognised that reaching a resolution now was preferable, given the high costs of the conflict and the significant trade and business potential between the two countries.
Beyond bilateral ties, what was exceptionally important was that the US, under a new Trump administration, was at odds with China and India, which meant that the two countries found themselves in a similar predicament in dealing with the US.
Politically and militarily, India and China have been at odds, and maintaining harmony has become increasingly complex due to persistent differences.
However, just as the year was to conclude, there was again a challenging phase in November when an Indian citizen from the Indian state of Arunachal Pradesh, transiting through Shanghai International Airport on her way to Japan, was arbitrarily detained for hours, leading to a diplomatic spat between both sides. While such incidents are often isolated events, they hold strategic significance and reveal a deep-rooted trust deficit in the bilateral relationship. What can we infer about the way the two giants of the Asian century interact?
Rising but divided
The idea of the Asian century has long resonated with many countries in Asia. Still, two stood out as leaders in the potential race — India and China, with their proven credentials as thriving economies with the incentive of a demographic dividend.
Meanwhile, over the past decade, these ideas have been consistently challenged and refuted, despite the two being among the top five global GDPs and the most populous countries in the world. At the end of 2025, in fact, the Indian government’s end-of-year review calculated that India had overtaken Japan to be the fourth-largest economy. Politically and militarily, India and China have been at odds, and maintaining harmony has become increasingly complex due to persistent differences.
In 2022, India’s Foreign Minister, S. Jaishankar, in one of his seminal speeches on the theme “Rising but divided: Asia’s geopolitical future” — had said that a “pre-requisite for an Asian Century is an India and China coming together. Conversely, their inability to do so will undermine it.”
The fading of the Quadrilateral Security Dialogue (Quad) discourse in 2025 further strengthens what Beijing is gaining from the global uncertainty surrounding the US.
By 2025, this insight had become particularly salient. Delhi and Beijing — two rising powers — found themselves at odds with the US on multiple fronts throughout the year. While the scale of their capabilities remained uneven, given the stark disparity in economic size, both India and China had nonetheless emerged with clearer global ambitions, underpinned by their respective economic trajectories.
However, there lies a potential for India and China, two of Asia’s most consequential powers, to influence much of the divided world and set examples from Asia. Nevertheless, a key distinction between Delhi and Beijing lies in their approach to the rules-based order: China asserts its influence across hotspots, including Taiwan and the broader Indo-Pacific, while India is exploring meaningful ways to respond to the potential threats Beijing poses to regional stability. Meanwhile, the fading of the Quadrilateral Security Dialogue (Quad) discourse in 2025 further strengthens what Beijing is gaining from the global uncertainty surrounding the US.
However, what can be celebrated in the two capitals is the rising stature of Delhi and Beijing as key global superpowers. While China may have gained more in this era, India has also done well, following reforms in the economic, defence and technological spheres under the Modi administration. They both have a responsible role and clout in the Global South, but what is it that keeps them divided?
Beijing’s calculated strategy
The primary cause of the divide between India and China is a lack of trust. Despite Delhi’s resumption of diplomatic engagements, it still sees Beijing’s footprints all over the region, which have been detrimental to India’s interests.
To begin with, Beijing’s diplomatic and material support to Pakistan remains in the sour memories of millions of Indians. During “Operation Sindoor” against what India perceived as terrorist camps in Pakistan, India saw Beijing’s strong support to Islamabad and Rawalpindi — the military headquarters of the Pakistan army — providing “live inputs” on key Indian positions during the conflict in May 2024.
Such actions suggest that these are less genuine de-escalations than a calculated approach — conceding one step while advancing on several others.
Secondly, the resurfacing of issues around India’s Arunachal Pradesh changes nothing on the ground for New Delhi and yields no tangible gains for Beijing, but raising the issue occasionally serves to create irritation. Indian Foreign Minister Jaishankar had remarked that “Nothing is going to change. In reality, Arunachal Pradesh is and will always be part of India…. but there is a larger issue. You know, there are international conventions and regulations which govern the transit of people, and you know, we expect countries to abide by.”
From the Chinese aggression along the LAC in 2020 to the detention of an Indian citizen at Shanghai International Airport, each episode reflects a recurring pattern in Beijing’s strategic behaviour: periodic tactical restraint or accommodation, followed by multiple strategic advances. Such actions suggest that these are less genuine de-escalations than a calculated approach — conceding one step while advancing on several others.
Therefore, Delhi clearly understands that de-escalation and disengagement achieved at the LAC in 2025 were not a return to pre-2020 conditions, but a “new normal” that demands cautious optimism and new terms of engagement.
What else they could explore and make meaningful would be cooperation on regional issues, such as advocating for the Global South.
A new slate in 2026?
Looking ahead to 2026, the prospects for improved India-China diplomacy and the implementation of military confidence-building measures appear strong, building on the momentum from 2025. Nevertheless, Delhi is likely to maintain a cautious eye on China’s activities in the Indian subcontinent, particularly its strategic advances in the Indian Ocean.
Meanwhile, with Bangladesh and Nepal scheduled to go to the polls in the first quarter of 2026, the elections could become a key arena for regional power competition. India, as a traditional power, is likely to rely on its established norms of influence, while China may turn to emerging political actors and new alliances to build substantial strategic clout.
Interestingly, trade could see further negotiations on commodities such as rare earth magnets, which Indian companies import from China. Last year, China halted exports, which created panic in India, particularly in the automotive industry. However, after months of negotiations, Beijing had reportedly removed the export restrictions, which led India to reflect deeply on how an external decision could impact its internal dynamics.
On the overall trade front, India aims to resolve its trade deficit of nearly US$100 billion with China — an issue that has gained prominence in bilateral talks in recent years. For the financial year 2024-25, the total bilateral trade stood at US$127.71 billion, with exports from India accounting for a modest US$14.25 billion.
On the technological front, China’s near success in the artificial intelligence (AI) sector and India’s aspiration to be a leader could lead to the two sides collaborating. What else they could explore and make meaningful would be cooperation on regional issues, such as advocating for the Global South.
This year, India will host the BRICS summit, which could potentially lead to a visit by President Xi to India, further strengthening bilateral ties. For India, BRICS offers an opportunity to strengthen its strategic autonomy. Within this framework, India engages with China while simultaneously maintaining ties with the US elsewhere — a balancing act that has often left Western observers wondering how Delhi manages the two relationships. For China, it mitigates isolation pressures, collectively nudging the US toward a more negotiated and less unilateral global leadership role.
Yet, on regional security issues, particularly concerning Taiwan, India will be closely monitoring China’s moves in 2026 and 2027, given the potential implications for stability in the Indo-Pacific.
The opinions expressed in this article are those of the author alone and do not reflect the views of the author’s current or past affiliations in any form.
