April 1st marked the 75th anniversary of the establishment of diplomatic relations between China and India. To commemorate the occasion, China’s President Xi Jinping and India’s President Droupadi Murmu, along with Chinese Premier Li Qiang and Indian Prime Minister Narendra Modi, exchanged congratulatory messages. Chinese President Xi Jinping invoked the metaphor of a ‘Dragon Elephant Tango’ to describe the relationship between the two most populous nations of the planet.
Indeed, China-India relations have come a long way since the Galwan valley clash in 2020, when a fight between their troops on the disputed border led to deadly casualties. Relations took a positive turn in October 2024, when they reached a border patrol agreement and followed it up with a flurry of high-level meetings.
Subsequently, in the first quarter of 2025, there was a mix of progress and friction in Sino-Indian ties. Highlights of the relationship included frequent official exchanges and positive political signaling. Disagreements over the territorial dispute, South Asian regional dynamics, and economic policies somewhat restrained the deepening of China-India relations. Still, the scale tilted toward positive developments. The dynamic is likely to persist for the rest of the year.
Drivers of Deepening Ties
Frequent political interactions continued in the first quarter of 2025. Indian Foreign Secretary Vikram Misri visited Beijing on January 26-27, where he met with China’s Foreign Minister Wang Yi, Vice Foreign Minister Sun Weidong and International Department of the Communist Party of China Mr. Liu Jianchao. On February 21, Chinese Foreign Minister Wang Yi and External Affairs Minister S. Jaishankar met on the sidelines of G-20 Foreign Ministers’ meeting in South Africa.
On March 25, the Working Mechanism for Consultation & Coordination on India-China Border Affairs convened its 33rd round with Gourangalal Das, Joint Secretary (East Asia) leading the Indian delegation and Hong Liang, Director General of the Boundary & Oceanic Affairs Department of the Chinese Ministry of Foreign Affairs at the helm of the Chinese team.
In addition to these direct interactions, the two sides also displayed unilateral shows of political goodwill. On January 18, at the Nani Palkhivala Memorial Lecture in Mumbai, Foreign Minister Jaishankar stated that India’s approach to China is based on “mutual respect, mutual sensitivity and mutual interests”, reiterating the continued upward trajectory in China-India ties. At a press conference on March 7, Chinese Foreign Minister Wang Yi acknowledged the “positive strides” made recently in China-India relations and reiterated China’s readiness to keep bilateral ties “on the track of sound and stable development.”
Prime Minister Narendra Modi emphasized the importance of dialogue with China during his appearance on the Lex Friedman podcast, a gesture that was “appreciated” by China’s foreign ministry.
The meetings and positive signaling led to notable progress in bilateral ties. The two sides agreed to continue the Kailash Mansarovar Yatra pilgrimage, reached an in‑principle agreement to resume direct flights between the two countries, and proceeded with discussions on cross-border cooperation on transboundary rivers. Shein, a Chinese fashion company that had its application banned by the Indian government in 2020, was allowed to reappear on app stores in India. There was also advancement in cultural exchanges, with the organization of the Third China-India Youth Dialogue and Chinese scholars visiting India to commemorate the 75th anniversary of China-India diplomatic relations.
Bumps in the Road Toward Normalization
The progress and positive trajectory of Sino-Indian ties are solid, but frictions remain.
Security and territorial issues remained tense but stable in the first three months of 2025. Although the situation on the disputed border calmed after the October 2024 patrol agreement, reports indicate that the two sides did not significantly decrease troop deployments there. At the same time, they improved their supporting infrastructure in the vicinity of disputed areas—India opened a tunnel that improves access to remote expanses, and China extended its electricity supply to strategic locations along the border. Therefore, the two sides seem to be hoping for the best but preparing for the worst. At the same time, China’s establishment of new counties in Xinjiang and plans to build a mega dam in Tibet remained concerning factors for India.
Another sensitive matter is China’s outreach to the Indian Ocean, which has long been a source of Indian concern.
In January, newly elected Sri Lankan President Anura Kumara Dissanayake visited China, where the two sides signed 15 cooperation documents, including one in which Chinese oil giant Sinopec agreed to invest $3.7 billion to build an oil refinery at Hambantota. The size of the investment and Sri Lanka’s unflattering track record of inability to pay back Chinese loans exacerbate Indian worries about China’s economic clout in the Indian Ocean region. In April, Indian Prime Minister Narendra Modi visited the small island nation, where the two sides signed multiple agreements covering various areas of cooperation, notably energy and defense. Indian media argued that the government’s move was motivated by China‑related concerns.
When all is said and done, China-India ties continued their upward trajectory in the first quarter of 2025. As long as the frictions are kept under control by leaders on both sides, we are likely to see further steps toward normalization of the Sino-Indian relationship.
India also articulated concern that trade pacts recently signed by the Maldives could negatively impact the small island state’s revenues. Despite not referring to China specifically, the comment likely relates to the China-Maldives free trade agreement, which came into force at the beginning of this year. India decided to step up its financial aid to the Maldives in its 2025 national budget, a move that analysts called an effort to counter China’s influence in India’s neighborhood.
India’s formerly close relationship with its neighbor Bangladesh has been going downhill since the fall of former prime minister Sheikh Hasina last year. Hasina, who faces allegations of crimes against humanity and money laundering, currently lives in India in exile. As India-Bangladesh ties deteriorate over the extradition of the ousted leader, the interim government has sent delegations to China, strengthening Beijing’s profile in the region.
In late March, Chief Advisor of the interim government in Bangladesh, Muhammad Yunus, visited China and encouraged Beijing to set up an economic toehold in Bangladesh to utilize the South Asian state’s access to the Indian Ocean. His remarks included references to the lack of connectivity of India’s northeastern regions, and fueled discontent in India’s public discourse.
Finally, China-India ties saw some misalignment in the economic arena. India was among the countries that officially advised against the usage of DeepSeek, which is a Chinese generative AI model that recently disrupted the AI industry because of its cost efficiency. The Indian government justified the request by referring to data security concerns. China opposed the move, calling it a politicization of technology issues and an overstretch of national security.
Furthermore, India’s Chief Economic Adviser V. Anantha Nageswaran suggested in February that India had no immediate plans of changing its current approach to Chinese investments, which have been seriously restrained since 2020. It was reported in March that India is considering a revision on this front, but it has not been officially confirmed yet. On the level of commerce, India made or planned decisions to impose tariffs and duties that negatively impact Chinese steel and chemical producers.
In other words, the situation on the territorial dispute remained sensitive, regional engagement in the Indian Ocean was challenging, and the two sides’ economic strategies were somewhat misaligned in the first quarter of 2025, tempering the progress made on building strategic trust between China and India.
Geoeconomic Circumstances Favor Further Normalization
When all is said and done, China-India ties continued their upward trajectory in the first quarter of 2025. As long as the frictions are kept under control by leaders on both sides, we are likely to see further steps toward normalization of the Sino-Indian relationship. This bodes well for both parties, as they both need willing economic partners amid the tariff turmoil recently unleashed by U.S. President Donald Trump. Third actors also benefit from the trend as they can simultaneously engage New Delhi and Beijing, harnessing the benefits of cooperating with two powerful economies.
