As China and India have improved their relations in recent months, many observers have attributed this improvement to the end of U.S. strategic altruism toward India. Indeed, in the past year, China has watched India lose its balance and simmer in a sense of strategic disorientation due to America’s change of heart. Delegation after delegation of Indian strategists visited China, trying to mend ties in search of balance in the Chinese view. Many Chinese experts see India as returning to middle-power alignment for “economic authority and strategic freedom,” which translates into vigorous outreach to Europe, Japan, Canada, and all the middle powers. It’s almost as if India is returning to its middle-power roots.
The Chinese reassessment of India’s power status and its strategic malleability — the extent to which its choices can be shaped — and predictability has significant implications for understanding future dynamics between the two powers. The renewed improvement in ties raises questions about its sincerity and limits. While China recalibrates its relations with India, it is also building fences and chokeholds, first and foremost through supply chain dependence. It is unclear what future policy the next U.S. administration will pursue toward either China or India. Both powers therefore keep their options open.
These assessments reflect ongoing research on China’s role in South Asia. They draw on 10 research trips to China, as well as roundtables and exchanges held online and in Washington with Chinese experts since January 2025. China demonstrates a strong tendency toward binary judgments on India’s alignment choice, while the reality is far more nuanced, as U.S. policy should be.
Debating India’s Power Status
In the Chinese policy discourse on India, the first and foremost question has always been India’s power status: Is India a great power, or is it simply a middle power with great-power potential? While India’s gross domestic product has consistently been a fraction of China’s, its claim to great-power status has had major sway over China’s calculus. Vishwa Guru — “India the world’s guru” — is a famous slogan created under the government of Prime Minister Narendra Modi that, in the Chinese view, best represents India’s strategic aspiration: India not only aspires to be a world-class great power but also sees itself as superior and therefore will teach all the other great powers. Although Chinese policymakers do not have romantic misperceptions of India’s actual power status, India’s aspiration and, even more so, its boldness have been no small shock to Chinese policymakers, who follow the tradition of overestimating adversaries’ capacity and hiding their own strength （料敌从宽，判己从严）. India’s bold statement made Beijing question whether it underestimated fundamental aspects of Indian capability and potential that warranted India’s great-power status.
More importantly, during the first Trump administration and the Biden administration, China stopped questioning India’s great-power status. India played a pivotal role in America’s Indo-Pacific strategy during these eight years, to the extent that Washington “hyped India’s power status” （大肆吹捧印度） and “exaggerated India’s development potential.”（夸大其发展潜力）
America’s willingness to elevate India to a global great power and its seemingly endless provision of assistance to lift India up changed China’s original view that only real comprehensive national power mattered. India’s gross domestic product has been only about 20 percent of China’s and has been unlikely to catch up any time soon to become China’s peer. However, that could entirely change if American support continues. Beijing knows this too well because China had been the beneficiary of similar American support and elevation from the 1970s to the 2000s. The difference for China is that back then the United States supported China to counter the Soviet Union, and during the first Trump and Biden administrations, the United States lent similar support to India to counter China. The lesson for China is that great-power status does not actually have to be expressed in real, current terms rather than future expectations and potentials, and U.S. support could very realistically and rapidly elevate India to a new height and single-handedly make India a new great power.
Seeing India as an aspirational and rising power, China believes it followed a policy of accommodation with India throughout this period and beyond. General Secretary Xi Jinping continued outreach and friendly messaging to Modi, including in 2018 (right after the Doklam standoff in 2017); in 2024 at the Kazan summit of the expanded economic bloc originally formed by Brazil, Russia, India, China, and South Africa; and in 2025 when hosting Modi at the Shanghai Cooperation Organization summit. China did not pursue reciprocal, retaliatory economic policies toward India after 2020. Even on the issue of visas, Chinese officials cited the 280,000 visas China issued to Indian nationals in 2025 to highlight the 2,000 visas India issued to Chinese nationals during the same period to demonstrate the vastly different treatments. For China, these are all reflections of its unwillingness to completely sour ties with India.
But now, with India losing America’s favor, India’s great-power status has become much less persuasive. Chinese strategists are returning to the view that perhaps, after all, India is just a middle power. It has great potential, but elements in the Indian strategic culture pose irremovable obstacles and consistently sabotage its ascension.
India’s Strategic Unmalleability and Predictability
As Chinese strategists observe the fluctuation of ties between the United States and India in the past nine years, it is unsettling and reassuring at the same time. The vast scope and depth of what the United States and India could jointly achieve materially and in practice is unsettling for China, exacerbating China’s anxiety about India’s future alignment or alliance with the United States and how it could undermine China’s roles and aspirations. However, the limitations to what the United States could persuade India to do, even with great rewards and strategic benefits promised, are reassuring for Beijing.
For example, despite the favors and support the United States is willing to provide India, India has refused to abandon its strategic autonomy. At the height of the Russo-Ukrainian War and American demand for India to cooperate, India refused to abandon economic and energy ties with Russia. In private conversations, India’s foreign policy community firmly distinguished between “like-minded” and “same-minded” countries to protect its strategic autonomy, and Indian diplomats vehemently emphasized issue-based alignments rather than permanent, rigid alliances.
For China, this is cognitively incomprehensible, as it essentially equates to “India wants to have its cake and eat it, too.” If the United States does not have full confidence in Indian loyalty and support, why would the United States spend its valuable resources to do India the favor and let India run with its own agenda? If the answer is a shared U.S.-Indian aspiration to curtail China’s rise and expansion, India’s expressed reluctance to support the United States and confront China militarily on China’s western flank in a future Taiwan contingency, a position that was reiterated amply in track two dialogues, has certainly made the case of “strategic altruism” less appealing for the United States.
On the drastically different interpretations of U.S. support and Indian reactions, all of the China and India specialists I spoke with refer to the Indian concept of “Dānā” (almsgiving) to explain what they see as India’s “ungratefulness.” What the United States identified as strategic altruism, India sees as strategic egoism because, in Indian culture, the concept of almsgiving views the recipient as doing a favor to the giver by providing them an opportunity to clear negative karma and practice detachment. Following this logic, Indian acceptance of U.S. assistance is India doing the United States a favor, and the United States should be in debt to India consequently. The correctness of this Chinese argument is debatable, but Chinese specialists’ unanimous claim of this cultural reading of a religious tradition as the origin of Indian strategic behavior is certainly noteworthy.
Essentially, China perceives India’s strategic choice as unmalleable, which significantly, or even critically, undercuts India’s potential. Despite the amount of support the United States was willing to supply, India has adhered to its strategic autonomy and refuses to alienate Russia or support a U.S. military campaign against China. Similarly, despite the amount of accommodation China sees itself as willing to provide India, including in economic cooperation, India also adheres to its longstanding position and refuses to forge closer ties. That means India’s strategic choice is predictable and cannot be shaped by the enticement of rewards or the threat of punishments. That substantially reduces the strategic value of India as a U.S. partner in strategic competition with China, and consequently, China’s anxiety about India’s alignment with the United States. Meanwhile, because of the expected limitation to India’s cooperation with the U.S. on the latter’s competition with China, it also considerably decreases India’s strategic appeal for China to pursue.
The Fences China Builds: Economic Dependence
Once the strategic questions of India’s power status and its alignment choices are answered, China’s remaining choices concern tactical approaches. With diplomatic engagement and maneuvering ongoing, China is most confident in the supply chain dependence it has built up vis-à-vis India. This is primarily prevalent in trade rather than investment, as India’s stringent domestic investment environment and the restrictions on Chinese investment have made investment an unlikely candidate to boost bilateral relations.
Trade tells a very different story. It is in fact profitable for China, especially considering the overwhelming trade surplus China runs vis-à-vis India. In fiscal year 2025 to 2026, the total bilateral trade volume reached $151.1 billion, but India ran a $112.1 billion trade deficit. That means 87 percent of bilateral trade consisted of Chinese exports to India. The trade imbalance is therefore a prominent sore spot for India.
What China has identified, however, is India’s middle position in the global supply chain. The argument is that India primarily imports from China materials, parts, and equipment that Indian companies use to make finished products for export to developed-country markets. The deficit India runs vis-à-vis China translates into a trade surplus it runs with other trading partners, such as the United States. India’s economic dependence on China, therefore, is already established despite New Delhi’s efforts to reduce supply chain risks associated with China. Decreasing India’s dependence on China will create significant economic pain for Indian industries and companies. The same supply shock the United States experienced in 2025 in the tariff war with China will happen to India if New Delhi attempts to shut Chinese products out. This economic dependence alleviates China’s anxiety over India’s strategic autonomy and hostility, as it creates more leverage for China
The other distinct aspect of China’s economic relations with India is the missing element of “empowerment,” which is prevalent in China’s ties with the rest of the South Asian subcontinent. “Empowerment” has been a pillar of China’s Belt and Road Initiative engagement in developing countries, meaning China not only trades and invests in the recipient countries, but also utilizes trade, new productive forces, infrastructure development, and industrial cooperation to empower local economies from within. Examples include agricultural technology transfers in Nepal, green technology and the digital economy in Pakistan, and campaigns such as “Smart Bangladesh.” However, “empowerment” is not an element in China’s economic engagement with India, which raises the question of whether China deliberately avoids economic engagement that could elevate India’s technological productivity, industrial upgrading, or high-tech development. One could say India rejects it from China anyway, but the lack of Chinese intention is obvious.
Where Do China and India Go from Here?
Predicting the future of Chinese-Indian relations is both easy and difficult. It is easy because bilateral relations have a ceiling, considering the many stressors from Pakistan to border disputes to regional competition to complicated geopolitical factors. It is hard because they could have no floor, given the potential for deterioration and the history of war, conflicts, and skirmishes between the two. For the time being, bilateral relations are stabilizing and improving, but their sustainability is subject to at least two unpredictable factors.
The first factor is Indian domestic politics, especially the relationship between the Rashtriya Swayamsevak Sangh (RSS) and the Bharatiya Janata Party (BJP) and the future successor to Modi. Despite the RSS being the parent and ideological guide of the ruling BJP, Chinese observers have noted growing tensions between Modi and the RSS due to electoral friction and the centralization of power and control by Modi. The recent trip by RSS chief Mohan Bhagwat to the United States is seen as a sign of the organization’s growing desire to raise its profile. No matter who the next prime minister will be, that person is unlikely to command the vast popularity and persuasiveness Modi has enjoyed. As such, India’s future internal cohesiveness and foreign policy appeal remain a question for China.
The bigger uncertainty in Chinese-Indian relations goes back to the United States. Washington’s current India policy has taken a dramatic turn, but future shifts in the post-Trump era are also a high-probability event. There is no guarantee that the United States will not resume its competitive strategy vis-à-vis China and once again see India as a needed partner in the process. China believes that India is also waiting for the United States to change its approach again — therefore, nothing current is set in stone. The result is that neither China nor India will be willing to lock in their future strategic posture. Keeping options open remains the optimal approach, but that also means the current rewarming of ties may have an expiration date sooner than people realize.
Policy Implications
These assessments have considerable implications for U.S. policy. If Chinese anxiety about the American-Indian relationship has genuinely diminished, then the deterrent value Washington derived from that relationship has diminished with it, which is a cost of the current policy that nobody is counting. If the Chinese read of Indian unmalleability is correct, then a post-Trump return to competition with China, and hence a return to cooperation with India, would face the same limits that frustrated the previous approach, and American planners should develop realistic expectations.
However, a more careful reading of the record also offers a more nuanced position on China’s largely binary interpretation of Indian “malleability versus unmalleability.” India by and large still holds significant skepticism and concern regarding China’s intentions, capabilities, and influence. Despite U.S. dissatisfaction with India’s lack of reciprocity, it would be erroneous to assume India’s position has not moved at all, such as on defense procurement and the issue of Taiwan. The subtlety does not lie in whether things change, but to what degree. The takeaway is that the United States and India will have to resort to much more careful calibration and negotiation over the terms of their agreement, rather than throwing possible future cooperation entirely out of the window. In March 2026, Deputy Secretary of State Christopher Landau issued a blunt warning during the Raisina Dialogue that the United States would not repeat its “China mistake” with India. The delicacy, however, lies in the cost-benefit analysis, as most policy options are about the measurement of relative losses and gains, rather than an absolute, binary, black-or-white answer.
Yun Sun is the director of the China Program at the Stimson Center.
Image: Prime Minister’s Office via Wikimedia Commons