India and China pursue pragmatic economic thaw amid border tensions

India and China are experiencing a pragmatic thawing of relations characterized by a supply-chain truce rather than a strategic reset. Following 2024 disengagement deals at Depsang and Demchok, both nations have moved toward easing business travel and selectively loosening investment rules to address economic necessities.

India's approach has shifted from strict decoupling to a strategy of de-risking. Despite high tensions following the 2020 Himalayan border clashes, India remains heavily reliant on Chinese imports, totaling approximately $132 billion in goods last fiscal year. A significant portion of these imports includes essential industrial inputs such as machinery, electronics, and chemicals required for Indian manufacturing.

While diplomatic and commercial ties are stabilizing, a significant gap remains between the two populations. Researchers from Tsinghua University note that Beijing has struggled to influence Indian public opinion due to a lack of long-term communication strategies and a reliance on official channels that fail to resonate with the Indian public. Meanwhile, deep-seated security concerns and stereotypes continue to persist among the Indian population.