India–China reset in 2025: From Galwan’s shadow to tactical calm; how long can this balance hold?

NEW DELHI: As India reopens channels with China, five years after the violent Galwan Valley clash, the moment carries an irony difficult to ignore. The last time an Indian prime minister trusted China, what followed has been echoing in our ears, at least for the past decade.

In 2025, India–China relations have taken an unexpected turn. After years of diplomatic frost, military standoffs, and hardened rhetoric, both sides have stepped back from the edge, at least on the surface. High-level engagements resumed, including Chinese foreign minister Wang Yi’s visit to Delhi and Prime Minister Narendra Modi’s meeting with President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) summit. Talks on disengagement at sensitive friction points such as Depsang and Demchok were revived, commercial flights were restored, and limited trade channels reopened, catching many observers off guard.




For a relationship long defined by suspicion, this thaw has raised as many questions as it has hopes.

India–China ties are rooted in a long and uneasy history: the trauma of the 1962 war, recurring border confrontations, the Doklam standoff, and the prolonged deadlock following the Galwan clash of 2020. Against this backdrop, the question arises: how stable is this new calm, and what does it truly rest on?

Just as important is what lies behind this shift. Strategic compulsions, economic pressures, and changing global alignments appear to have nudged both capitals towards a phase of managed stability, reset driven less by reconciliation than by necessity.

For India, the sudden outreach to China marked a rare recalibration of posture. After years of projecting firmness and strategic distance, New Delhi’s decision to test a reset challenged long-held assumptions about Beijing. It signalled not abandonment of caution, but a willingness to probe whether limited cooperation could coexist with enduring rivalry, without compromising strategic autonomy or long-term security interests.

What all reopened

The 2025 reset unlocked channels that had remained frozen by mistrust since 2020. Direct passenger flights between major cities, including Delhi and Beijing, resumed after a five-year pause, restoring people-to-people contact and easing business travel that had effectively stalled since the Galwan clash.

On the ground, border trade routes also saw movement. Nathu La in Sikkim reopened, allowing the exchange of local goods. These measures helped lift bilateral trade, supported by a gradual easing of restrictions on select shipments and licensing procedures.

Diplomatically, both sides revived long-dormant mechanisms, from special envoys to working groups on boundary issues, creating channels to manage friction without escalating tensions. While none of these steps amounted to a breakthrough on the core border dispute, they helped restore a minimum level of predictability to a relationship that had become dangerously brittle.

Exports jump, but the imbalance deepens

India’s exports to China jumped sharply in November 2025, rising 90% year-on-year to $2.2 billion, according to the Global Trade Research Initiative (GTRI). From April to November, exports climbed 33% to $12.2 billion. At first glance, the figures suggested a revival in commercial ties after years of disruption.

But the headline numbers conceal deeper vulnerabilities.

GTRI notes that India’s export growth to China remains narrow and volatile, driven largely by a handful of products rather than a broad-based expansion of India’s traditional export basket. Naphtha and select electronics dominated the surge, while sectors such as iron ore and agriculture showed inconsistent or muted performance.

At the same time, India’s imports from China remain heavily concentrated and structurally entrenched. Between January and October 2025, electronics alone accounted for $38 billion in imports, followed by machinery at $25.9 billion, organic chemicals at $11.5 billion, and plastics at $6.3 billion. These categories include mobile phone components, integrated circuits, laptops, solar modules, lithium-ion batteries, and pharmaceutical intermediates.

The result is a widening trade imbalance. India’s exports to China fell from $23 billion in 2021 to $15.2 billion in 2022, remained subdued through 2023, and are projected to rise modestly to $17.5 billion in 2025. Imports, however, surged from $87.7 billion in 2021 to an estimated $123.5 billion in 2025, pushing the trade deficit towards $106 billion.

Chinese customs data paints an even starker picture, suggesting a deficit of over $115 billion.

India’s recent export gains to China are narrow, volatile, and heavily dependent on shifts in Chinese demand, GTRI warns. Without a sustained strategy to expand competitive manufacturing and reduce import dependence, short-term spikes will not alter the fundamentally imbalanced nature of the relationship.

A reset born of compulsion

Many analysts argue that the 2025 thaw was driven less by renewed trust and more by shared constraints. As Ashley Tellis put it in one of his articles, “The India–China detente is more tactical than transformative, driven by US tariff pressures and trade deficits, not genuine border resolution.”

For Beijing, mounting pressure from renewed US tariffs under President Donald Trump, a slowing domestic economy, and widening Western efforts to reduce dependence on Chinese supply chains made engagement with India increasingly attractive. Stabilising ties with a major regional power offered China economic breathing space and diplomatic signalling at a time of global pushback.

For New Delhi, the calculus was equally pragmatic. Prolonged military deployments along the Line of Actual Control strained resources and readiness, while global supply chain disruptions underscored the costs of sustained confrontation with the world’s manufacturing hub. De-escalation offered room to regroup without conceding core positions.

What emerged was a carefully calibrated detente, transactional, limited, and hedged, designed to manage risk rather than resolve rivalry.

Is this sustainable?

The durability of the 2025 reset remains uncertain. There is still no agreed demarcation of the Line of Actual Control, and troop levels have not returned to pre-2020 positions. Even minor patrol incidents could quickly spiral into larger crises.

Deeper political sensitivities remain unresolved. The presence of the Dalai Lama in India and Beijing’s concerns over succession continue to loom in the background. China’s strategic partnership with Pakistan, particularly in the aftermath of terror incidents such as the Pahalgam attack, remains a major source of friction.

Former Indian ambassador to China Gautam Bambawale told DW, “Beijing knows this. So does New Delhi. For example, India is never going to permit Chinese firms like Huawei and ZTE into India’s telecom space again.”

Without clearer ground rules and deeper strategic dialogue, many fear the thaw could remain temporary, vulnerable to the next shock.

Impact on Indian foreign policy

Opinions differ on whether India’s outreach to China reflects tensions with the United States or a broader recalibration. Beijing also recently rejected claims in a Pentagon report that China is easing border tensions to weaken US–India ties, calling such assertions misleading.

For India, engagement with China fits a long-standing strategy of hedging, keeping options open, protecting strategic autonomy, and avoiding over-reliance on any one power. Strategic analyst Happymon Jacob, in an article, argued that the renewed bonhomie demonstrates that alternatives to exclusive alignment with Washington do exist.

The reset has also improved India’s footing in multilateral forums such as the SCO and BRICS. With tensions temporarily eased, New Delhi will be able to engage more confidently, leveraging improved optics with Xi Jinping to press Global South concerns, development financing, and calls for a more balanced global order.

At the same time, India can quietly continue to strengthen its neighbourhood strategy, deepening ties with Bhutan, expanding connectivity initiatives, and countering Chinese influence in Nepal and Sri Lanka.

What next

India now finds itself at a familiar but delicate crossroads. Over the past decade, it has sought to position itself as a central player in a multipolar world, balancing ties with the US and Russia while managing competition with China. This balancing act has become harder as global fault lines sharpen, forcing New Delhi to constantly reassess risks without locking itself into rigid alliances.

Strategic analyst Brahma Chellaney, in an article, cautioned against overconfidence, warning that past experience shows how quickly tactical accommodation with China can unravel. History suggests that periods of calm in India–China relations often rest on fragile assumptions, vulnerable to sudden shifts triggered by border incidents, regional crises, or domestic political pressures on either side.

Going forward, New Delhi will have to walk a tightrope. Military vigilance along the LAC cannot be relaxed even as diplomatic engagement continues. Economically, India must accelerate efforts to reduce critical import dependence, especially in electronics, pharmaceuticals, and clean energy components, while ensuring trade engagement does not translate into strategic vulnerability.

The challenge ahead will be to preserve this fragile equilibrium: securing short-term stability without sacrificing long-term security, avoiding economic over-dependence, and ensuring that tactical resets do not harden into strategic illusions. For now, the 2025 thaw offers space, but not certainty.
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