While US President Donald Trump following his assumption of presidency for the second time in Oval Office began to tighten trade screws against China, however, he quickly started to back down than expected with Chinese retaliation given Beijing’s economic resilience, reserves of rare earths, magnets and its control over key supply chains. Now the administration appears to be soft on China on the Taiwan issue and broadly on the Indo-Pacific theatre and seems to move ahead with trade talks with China. It is not lost on Beijing that the Trump administration, in its previous tenure including its predecessors, pursued clear strategies of geopolitical containment of China. On the other side, India has been caught off-guard when the Trump administration imposed a whopping 50 percent tariffs on almost all goods exported by India. In this larger context, China would like to invest in normalizing political tensions and strengthening trade ties with India by addressing the latter’s trade concerns to weaken the American containment strategy by hamstringing the QUAD in the Indo-Pacific and cultivating India’s support for its ‘One China’ policy that includes categorical support as regards Taiwan as part of China undercutting American long-term geopolitical strategies in the Indo-Pacific. Much celebrated friendship between India’s Prime Minister Narendra Modi and US President Trump and the wishes that the former bestowed on the latter during the Presidential elections towards the end of last year appeared to be just flamboyant display of personal equations and hollowness in the Indo-US bilateral relations that began to unravel with the imposition of tariffs directed at unsettling Indian economy. The strategic relations that took years of strenuous and steadfast efforts from both sides were turned on their head all of a sudden. The rupture in relations have been solidified by Indian opposition parties, the media, and the Indian public who expect Modi government not to budge in the face of Trump’s threats.

India’s Outreach to China

India and China faced major turbulences in their bilateral relations in 2020 following a fierce confrontation in the Galwan Valley of the Himalayan landscape leading to loss of lives of many soldiers on both sides and a stand-off between the two for the next four years. However, in October last year, China and India came out of the frozen relations by reaching an agreement on patrolling a stretch of their long-disputed shared border. This thaw in mutual relationship allowed Indian Prime Minister Modi to meet and hold talks with the Chinese President Xi Jinping in Russia in the same month on the sidelines of BRICS Summit. On August 31st of this year both leaders will be meeting with each other on the sidelines of SCO Summit in China, however, in a very changed context with greater desperation and expectations from India which China would seek to leverage. If these ties can be cemented with reciprocity, it can herald a new Asian Century. China’s Foreign Minister Wang Yi during his visit to India to hold the 24th round of Special Representatives’ talks on the boundary question during August 18-19, 2025 referred to the continuing US threat when he remarked about “unilateral bullying” and the threat to free trade and international order. He prepared the ground and momentum for the upcoming meeting between Prime Minister Modi and President Jinping on the sidelines of SCO Summit.

Mutual Perceptions and Misperceptions

Perceptual divergences on geopolitical issues have pushed both India  China into irreconcilable positions such as India’s unwillingness to facilitate China’s membership in the South Asian Association for Regional Cooperation and China’s reluctance to strengthen the Bangladesh China India Myanmar sub-regional initiative. While references to explore “China-India Plus one” or “China-India Plus X” cooperation to achieve mutual benefits and win-win outcomes between China and India were very often resorted to, no substantive headway was made in this direction

India and China failed to share common perceptions on threats, geopolitical objectives and integration. While the history of adversarial India-China relations cast a lasting impact on Indian threat perception, as the military clash of 1962 was viewed by many within Indian strategic circles as a breach of trust and the spirit of the Panchsheel Agreement signed between the two countries in 1954, Doklam and Galwan standoffs in the high Himalayas not only pointed to prolonged trust-deficit between the two countries, raising the geopolitical question as to how both could reconcile their positions in “overlapping peripheries.”

Beijing’s non-recognition of the McMahon Line as the international border between India and China and assertion of sovereignty in Arunachal Pradesh also long served to shape the Indian perception of China. China’s increasing arms supplies to some of India’s neighbors corroborated the perception that the former was incessantly engaged in multiplying its influence in what the latter considers its strategic periphery.

On the other hand, the Chinese perception of India was shaped by factors ranging from controversial border issues to New Delhi’s act of providing asylum to the Dalai Lama – the spiritual leader who claimed autonomy for Tibet. In June 2024, India approved a U.S. congressional delegation’s meeting with the Dalai Lama. Similarly, even while China seeks to isolate Taiwan, taking a pro-US stance, India has sought to deepen bilateral economic engagements with Taiwan by concluding agreements on joint development of semiconductor manufacturing facilities and through a labor-mobility agreement signed in February 2024. India has delivered BrahMos missiles to the Philippines in 2024 despite China’s maritime dispute with the archipelago state in the South China Sea. India’s commitment to a strategic partnership with the US on the one hand and attempts at forging bilateral ties with China on the other also did not convince China that the strategic partnership was not directed at undercutting Beijing’s geopolitical influence. Similarly, Beijing’s hegemonic economic policies and actions in the South Asian region including the Himalayan landscape and Indian Ocean regions engendered suspicions within the India’s strategic community and foreign policy circles pushing New Delhi into Washington’s sphere of influence.

Countering American Hegemony

Despite  bilateral territorial and political tensions, the two neighbors have cooperated in the face of  external threat perceptions. However, the equations the two neighbors maintained with external powers very often endangered suspicions between the two resulting in a fleeting and occasional bilateral relationship.

The two neighbors have demonstrated their ability to cooperate effectively in the institutionalization of Asian Infrastructure Investment Bank (AIIB), where India has become the second-largest investor after China. India has been one of the largest beneficiaries of lending from the multilateral institution. The country has received a whopping sum of $4.4 billion by 2018 to fund various projects including electricity generation, road construction, and urban rail projects. Apparently, they share common interests in strengthening cooperation under the frameworks of BRICS, the Shanghai Cooperation Organization and the Group of Twenty as well. By demonstrating as well as institutionalizing South-South Cooperation, Both India and China stand to bargain more effectively for an egalitarian economic order. Both shared similar views on climate issues and cooperated in some instances to secure energy supplies. The prolonged US-China trade war also induced India-China cooperation in some areas of trade.

China’s conflicting relations with India were very often dictated by India’s cozy relations with the US and resultant incertitude regarding its stance on China-US disputes involving places such as Taiwan and South China Sea islands. However, in this changed context following imposition of massive American tariffs on it, India is poised to navigate its relations with China without pandering to American geopolitical concerns. India and China together may make way for each other for a greater role in the South Asian and Southeast Asian regions respectively. To attain these objectives, China may address India’s security concerns by making space for more bilateral debates and discussions in this changed strategic environment.