India China Relations Xi Modi Summit 2026

India China Relations Xi Modi Summit 2026

I had an excellent over hour long conversation with Raj Chengappa ( https://www.indiatoday.in/author/raj-chengappa ) about the BRICS+ meeting focusing on the Modi Xi meeting and what it meant for the future relations of India and China. The result, was an enlightening list of reactions by various experts in the following article:

https://www.indiatoday.in/magazine/cover-story/story/20260928-india-china-relations-the-new-equation-2997443-2026-09-18

While many of my thoughts were included, I wanted to add some that were not.

The India Today article, “The New Equation”, describes an important moment in India-China relations. One in which there is movement — but no immediate resolution in sight. It points more towards a deliberate pathway to an eventual boundary dispute based on building trust and understanding over the long run while managing irritants between two neighbors who need to find equilibrium in the absence of agreement.

As said in the article, “There is no evidence yet that the boundary dispute is any closer to being resolved.” What we are seeing instead is the careful and measured reconstruction of trust that was destroyed at Galwan. There are also trade imbalances that need to be understood and addressed, particularly by India.

The objective by both sides is to manage the border and economic issues, so that they don’t manage the relationship.

That distinction is critical.

In terms of the border: The new military hotlines, command-level contacts, border-management mechanisms, reopened trade routes, flights, visas and the reopening of the Kailash Mansarovar Yatra are all useful. But they are mechanisms to manage a critical relationship, not terms of a political settlement.

The central problem.

Galwan was a failure of risk management by both sides. Putting soldiers eyeball-to-eyeball in a disputed area created the conditions for confrontations rather than controlling them. The dispute over the Chinese tent became a flashpoint. The loss of lives on both sides deepened a distrust that still lingers.

The obvious question is why soldiers need to be physically confronting one another to monitor a disputed border in the first place. Drones can provide imagery, location, and telemetry without putting human beings directly in harm’s way. India and China should explore arrangements in which drones monitor agreed areas and the relevant information is available to both sides. They have been used in the past, they just need a protocol agreed by both sides. If there are no soldiers confronting each other on the patrol line, there is no chance that a patrol dispute can escalate into an incident.

This is not a technical fix dressed up as a political one, and I am not selling it as such. Shared imagery does not settle interpretation — it will still be necessary to agree on what counts as encroachment and what verification thresholds apply. But telemetry makes that argument a command-level dispute instead of a bar-room brawl. Questions about movement can be dealt with using shared information, at a pace both sides control, rather than at the tip of a bayonet.

The point.

It will not settle the border, but it will make the border issue safer to manage as both sides continue the trust-building efforts that have been going on for the last 3 years. This is critical if, for example, a compromise or a land swap was to be the basis of future border resolution. Hostile nationalistic netizens on either or both sides would create unacceptable political risks. Therefore, better understanding by both sides is needed. Actions and programs like people-to-people interactions and education are necessary to soften the years of negative narratives.

In terms of the economic issues: The approach should be reciprocity without illusion. In essence, requiring the same practical thinking.

India’s complaints about Chinese tariffs and non-tariff barriers and vice versa are legitimate issues for negotiation. The tit-for-tat barriers should be examined with the aim of dismantling as many as possible.

But India should not confuse market access with competitiveness. China is a hyper-competitive market. If an Indian company arrives without something new, better, cheaper, or more desirable, simply removing a tariff will not make it competitive. India has to build companies and brands that can compete on their own merits at home and abroad.

This is where India’s enormous pool of engineers and technical talent becomes critical — and where honest accounting is needed. India produces world-class engineers yet captures a fraction of the value they create. Too much of India’s talent flows into other economies. Part of this is due to Indian companies consistently under-investing in R&D and brand-building relative to their international competitors. The lack of R&D and globally recognized brands has nothing to do with China; it is an internal Indian development challenge.

One solution is not for India to stop using Chinese inputs, but the opposite. India should use Chinese inputs where they make economic sense, then build on them. Using Chinese machinery, components, chemicals, and other inputs can help Indian companies become more competitive and develop greater domestic capabilities, better products, and stronger brands rather than permanent dependence.

That is what I mean by “reciprocity without illusion.”

There is another bright area of economic hope shared by both countries: A technological opening. The same practical approaches that can make the border safer — technology which controls and lowers the cost of coexistence — can also be applied to the economic equation.

Digital technology is lowering the barriers for Indian SMEs to enter global markets. The internet can identify customers and demand. AI can provide market intelligence, translation, and marketing support. Digital logistics can connect small producers with overseas buyers, and digital payment systems can facilitate transactions.

This changes the competitive equation. In a multipolar, multilateral world, business success will increasingly depend on knowledge rather than simply size. India has an enormous reservoir of technical knowledge and talent but needs more understanding of the markets it wishes to compete in. Then the challenge is using it to create products and services that people want to buy.

The relationship therefore cannot be reduced to a Chinese trade surplus, an Indian trade deficit, or a dispute over tariffs. It is about where value is created and who captures it.

As said in the article, “The new economic equation cannot be built around grievance alone.” India needs Chinese inputs where they enhance competitiveness while developing the capacity to replace strategic dependencies over time.

What success would look like

The relationship cannot ultimately be stabilised by armies, diplomats, and businessmen alone. People need to understand each other. Galwan changed public attitudes in India, while understanding of India inside China — and of China inside India — remains too shallow.

And we should be honest about the limits of the instruments we are relying on. Economic interdependence did not prevent Galwan, and it has not prevented militarised borders elsewhere. Interdependence is desirable but not sufficient: it raises the cost of escalation without guaranteeing restraint. That is precisely why it must be paired with better risk management on the ground and genuine human contact — not treated as a substitute for either.

The current thaw should therefore be judged by a practical, measurable standard:

* Is the disengagement agreed at friction points such as Depsang and Demchok fully honoured and verified?

* Are trade and visa barriers actually being dismantled — not merely discussed at dialogue tables?

* Are India and China engaging in enough practical measures, communications, economic cooperation, and human-to-human contacts to prevent the next disagreement from becoming another Galwan?

That is not reconciliation. It is not a resolution. It is coexistence by design — managing the dispute so that it does not manage the relationship.