Resetting Indo-China ties: Implications for South Asia

The recent visit of Indian Prime Minister Narendra Modi to Beijing is more than a bilateral engagement between Asia's two largest powers; it is a potential game changer for the South Asian region and for global geopolitics. For decades, the relationship between India and China has oscillated between uneasy coexistence and overt hostility. The shadow of the 1962 war and the bloody skirmishes that flared up even in recent years at the Line of Actual Control (LAC) long defined their rivalry. Direct air links were cut off, trade slowed down, and Chinese companies were increasingly pushed out of Indian infrastructure projects. Suspicion had hardened into hostility, and hostility into a wider geopolitical fault line that reverberated across South Asia.

Yet, Modi's Beijing visit appears to have opened a door that many thought permanently shut. The thaw is not simply a bilateral necessity -- it is rooted in global shifts. A crucial catalyst has been the dramatic tariff hike imposed by the Trump administration on Indian exports, which India perceives as a betrayal from a partner it once relied upon to counterbalance China. In this context, New Delhi's recalibration toward Beijing has the potential to transform the regional landscape.

The India-China rivalry has deep historical roots. The 1962 border war not only inflicted territorial and human losses but also entrenched mutual distrust that persisted across generations. Even when the two countries achieved significant economic growth in the late 20th and early 21st centuries, the mistrust remained. Periodic talks and confidence-building measures were often overshadowed by sudden flare-ups, the most serious of which occurred in Galwan Valley in 2020, leaving soldiers dead on both sides.

These skirmishes had consequences far beyond the battlefield. The suspension of direct flights, restrictions on Chinese firms in India, and heightened nationalist rhetoric further chilled ties. For ordinary citizens, a sense of animosity took root, creating a perception that the rivalry was both permanent and irreversible.

But in geopolitics, permanence is elusive. The sharp shift in the U.S. trade policy --specifically Washington's decision to impose 50 per cent tariffs on Indian goods -- upended India's calculations. Long seen as an ally in countering China's growing influence in Asia, the U.S. suddenly appeared unreliable. For India, the tariffs felt less like an economic dispute and more like strategic abandonment. Faced with this jolt, New Delhi's leadership began to look anew at Beijing.

The global context matters. The U.S.-China rivalry has increasingly defined world politics, pushing other nations to take sides. India, for years, leaned closer to the U.S., participating in forums like the Quad alongside Japan and Australia. But Washington's tariff hammer made India realise that over-reliance on one partner was strategically risky.

China, for its part, also has reasons to engage. With slowing growth, trade disputes with the West, and mounting concerns about global supply chain realignments, Beijing needs stable relations with regional giants like India. For China, India represents not only a massive consumer market but also a partner whose cooperation is vital to stabilising South Asia.

Thus, Modi's visit represents a moment of convergence: two rivals finding common ground not because their disputes vanished, but because global pressures created overlapping interests.

The ripple effects of improved Indo-China relations will be most deeply felt in South Asia. For decades, the smaller countries of the region -- Bangladesh, Nepal, Sri Lanka, Bhutan, and the Maldives -- have had to perform a delicate balancing act. Aligning too closely with China risked provoking Indian ire, while tilting too much toward India could jeopardise Chinese economic investments and political goodwill. This strategic tightrope often constrained their foreign policies and left them vulnerable to external pressures.

For Bangladesh, the balancing act has been particularly delicate. Dhaka has deep historical, cultural, and security ties with Delhi, while at the same time it has become a significant beneficiary of Chinese infrastructure investments under the Belt and Road Initiative (BRI). Navigating between these two giants has been a diplomatic challenge. Too much closeness to one used to invite suspicion from the other.

If Modi's Beijing visit indeed ushers in a phase of cooperative Indo-China relations, Bangladesh will breathe a sigh of relief. It means less pressure to choose sides and more room to focus on its own economic and strategic priorities. Improved ties between Delhi and Beijing could also pave the way for regional connectivity projects -- rail, road, and energy corridors -- that benefit all of South Asia.

For Nepal, long caught between the two giants, a more stable Indo-China relationship would ease the constant tug-of-war over its foreign policy. It may also open up new opportunities for infrastructure cooperation without being framed as a zero-sum game.

Sri Lanka and the Maldives, often cited as examples of "debt trap diplomacy" in relation to Chinese loans, have found themselves struggling to balance Beijing's financial leverage with New Delhi's strategic expectations. A thaw between the two Asian powers could reduce the competitive bidding for influence and instead foster cooperative development initiatives.

On the other hand, Bhutan's security concerns have always been tied to the India-China dispute, especially in the sensitive Doklam plateau area. A shift toward cooperation could provide much-needed stability for Thimphu, which has been under immense pressure due to its geographical vulnerability.

The resetting of ties between India and China is not only a bilateral breakthrough but also a regional stabiliser. A cooperative relationship between Asia's two giants could reduce border tensions. Dialogue can replace skirmishes, lowering the risk of accidental escalation.It could boost regional trade. By reopening trade channels and restoring direct connectivity, both countries can drive economic growth across South Asia. Better Indo-China relationship could also encourage multilateralism. Platforms like BRICS, the Shanghai Cooperation Organization, and the Asian Infrastructure Investment Bank could gain new relevance with India and China working in tandem. Again, it could shift geopolitical equations. If New Delhi and Beijing find common ground, South Asia could become less of a battleground for U.S.-China rivalry and more of a hub for Asian-led initiatives.

However, optimism must be tempered with caution. The structural problems in Indo-China relations remain profound. Border disputes have not been resolved, and mutual suspicion in security establishments is deep-rooted. Domestic political pressures in both countries can easily reignite nationalist rhetoric, undoing fragile progress.

Moreover, while economic cooperation is possible, competition for influence in South Asia will not vanish overnight. Both nations still see themselves as natural leaders of Asia, and that rivalry of visions could complicate sustained cooperation.

The role of the United States also remains uncertain. Washington will not quietly watch a warming of ties between India and China, as it undermines the U.S. strategy of using India as a counterweight to China. Future U.S. administration may offer incentives -- or exert pressures -- to pull India back into its orbit.

For the reset to succeed, sincerity and seriousness are essential. Symbolism must translate into substance. Both sides should prioritise some tasks. First is to institutionalise dialogue through regular high-level meetings to manage disputes before they escalate. Second is to restore connectivity by reopening direct flights and easing restrictions on trade and investment. Third is to promote regional projects through joint infrastructure or energy initiatives in third countries like Bangladesh or Nepal that could showcase cooperative leadership. And fourth is to de-escalating border disputes by establishing clear mechanisms for border crisis management to prevent future clashes.

Prime Minister Modi's visit to China is more than a diplomatic gesture -- it is a recognition that the destinies of India and China are intertwined. Their rivalry has long cast a shadow over South Asia, forcing smaller nations into uncomfortable choices and perpetuating instability. But the emerging reset offers a chance to break this cycle.

For Bangladesh, Nepal, Sri Lanka, Bhutan, and the Maldives, the thaw could mean breathing space and opportunities for growth. For Asia, it could mean greater stability and a stronger voice in global affairs. And for the world, it signals that multi-polarity is not merely an abstract concept but a tangible reality taking shape in the heart of Asia.

The task ahead is daunting. Old rivalries die hard, and global geopolitics remains volatile. Yet, if nurtured with seriousness and sincerity, the new momentum in Indo-China relations could redefine South Asia's future. It is an opportunity too significant to squander.

mirmostafiz@yahoo.com