Growing Engagement Between Old Rivals

China and India, two countries with a long history of border disputes and regional competition, are now taking visible steps toward improving relations. In recent weeks, Chinese Foreign Minister Wang Yi has scheduled a visit to New Delhi for talks with India’s National Security Adviser Ajit Doval. The agenda includes discussions on their contested Himalayan border, resumption of direct flights suspended since 2020, and reopening border trade at three Himalayan crossings.

Prime Minister Narendra Modi is also set to meet Chinese President Xi Jinping later this month during his first visit to China in seven years for the Shanghai Cooperation Organisation summit. These moves follow last October’s agreement on joint border patrols, which helped ease a five-year standoff that had hindered trade, investment, and travel.

India’s government think-tank has even proposed easing investment rules for Chinese companies, signaling a possible shift toward deeper economic cooperation. Beijing has emphasized that border trade historically played an “important role in improving the lives of residents along the border and enhancing exchanges between the two peoples,” while India’s foreign ministry has stressed its readiness to “facilitate the resumption of border trade through all designated trade points.”

Why Now? The Tariff Factor

This diplomatic thaw comes amid growing tensions between New Delhi and Washington. President Donald Trump recently imposed two rounds of tariffs totaling 50 percent on Indian exports to the United States, one of the steepest rates applied to a U.S. strategic partner. The second round was framed as part of Trump’s effort to pressure countries that continue buying Russian oil, and India—now the second-largest buyer—was singled out despite China purchasing even more.

The United States has chosen not to penalize Beijing directly for its own massive imports of Russian crude, in part due to economic interdependence and Trump’s belief that China might help broker an eventual Ukraine peace deal. That uneven application of pressure has led some analysts to conclude that U.S. policy is inadvertently pushing India and China closer together.

Backers of the administration’s approach argue that the tariffs are a necessary show of resolve toward Moscow’s war in Ukraine. They believe targeting India demonstrates that even strategic partners must follow sanctions rules and that tough economic measures are the only way to deter purchases of Russian crude. These supporters also point out that Washington’s long-term strategic partnership with New Delhi will survive short-term disputes.

Alarm Over Strategic Consequences

Critics see a dangerous strategic misstep. They warn that while Trump may have the best of intentions in pressuring Vladimir Putin, the collateral damage to U.S.–India relations could shift the balance of power in Asia. Many in the policy community argue that in the “greater game,” Washington’s priority should be driving a wedge between Beijing and New Delhi, not inadvertently encouraging their cooperation.

The fear is that if India feels cornered by U.S. tariffs, it may deepen engagement not just with China but also with Russia, reducing U.S. influence in the Indo-Pacific. Some alarmists suggest that closer India–China ties could complicate U.S. efforts to counter Beijing’s regional ambitions and weaken the very coalition meant to contain Chinese power.

While direct border trade between India and China is still a small portion of their $127.7 billion annual commerce, its symbolic value is significant. Combined with renewed high-level visits and policy shifts toward easing investment rules, the current thaw could mark the beginning of a more durable rapprochement.

Yet the unresolved territorial disputes, water rights issues, and competing strategic interests remain formidable barriers to lasting trust. Even so, the pace of current developments underscores a central reality: Washington’s punitive measures against New Delhi—while sparing Beijing—risk creating the very alignment the U.S. has long sought to avoid.

ACZ Editor: Putin is a smart guy. He has maneuvered Trump into overcommitting to ending the war with Ukraine. If it costs the U.S. India as an ally, then that cost is too high. Will this turn out for the good? Can we pressure Putin and still retain India as a hedge against China? Time will tell, but India is not stupid – and they have options.

For American policymakers, the challenge is clear. If the goal is to isolate China and pressure Russia, damaging ties with India may be the most counterproductive move possible. The real strategic win would be to strengthen New Delhi’s partnership with Washington, not drive it toward Beijing’s embrace.