India-China relations have entered a phase of cautious re-engagement, but beneath the diplomatic optics lie deep structural fault lines shaped by power asymmetry, border tensions, economic interdependence, and great power rivalry. Dan Banik speaks with Manoj Kewalramani about whether the relationship is stabilizing into a cold peace or simply entering another cycle of strategic competition with global consequences.
India-China relations are entering a new phase of cautious re-engagement after five years of deep tension following the 2020 Galwan clash. Leaders have resumed meetings, direct flights have restarted, and diplomatic channels are active again. However, beneath these gestures lie enduring structural fault lines: a widening power asymmetry, unresolved border disputes, shifting public opinion in India, and Beijing’s tendency to view New Delhi through the prism of US–China rivalry.
Dan Banik speaks with Manoj Kewalramani, Chairperson of the Indo-Pacific Studies Programme and a China Studies Fellow at the Takshashila Institution and author of Smokeless War: China’s Quest for Geopolitical Dominance. Together, they examine whether the current thaw represents meaningful stabilization or merely a fragile “cold peace.” The conversation explores how economic interdependence coexists with strategic mistrust, why India is pursuing de-risking rather than decoupling from China, and how domestic politics and public narratives shape policy choices in both countries.
From a development perspective, the episode also asks whether policy lessons can travel across fundamentally different political systems. Can India draw operational insights from China’s infrastructure and governance successes without compromising democratic institutions? And is Beijing willing to accommodate India’s aspirations as an independent global power?
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Here is the revised transcript with speaker names correctly replaced:
[Dan Banik]
Manoj, great to see you. Welcome to the show.
[Manoj Kewalramani]
Thank you so much, Dan.
My pleasure.
[Dan Banik]
There is a lot of worry these days about how the world looks. And the relationship between India and China, these neighbors, these two big Asian superpowers, is always being discussed. The relationship between India and China in terms of the economy is often compared—very similar starting points, but very different development outcomes. But both are playing a very important role in world affairs. How would you characterize the current relationship between these two countries?
[Manoj Kewalramani]
I think I'd look at the current equation since the attempted thaw in late 2024 as some sort of a cold peace, where both are trying to adjust to changing structural environments geopolitically, and both are also trying to adjust to a new power dynamic in the relationship itself.
Like you said, if you go back to 1990, India and China were essentially at par when it came to economic development. And since then, while both sides have grown, there is a tremendous asymmetry that has developed between the two. The Chinese economy is more than five times larger than the Indian economy, and it continues to grow at a fair pace. So what we're likely to see is that this asymmetry will persist.
What asymmetry does is create a certain perception of power on both sides. I think both are currently testing where they stand with each other. So you're likely to see more friction, but also a scenario of two steps forward, one step back, as both sides try to assess where each stands. That is why I say that currently we are in a period of cold peace, where both are trying to figure out which aspects of power and which aspects of the relationship work for each other.
At the same time, neither wants to push the boundaries too far. The experience of the past five years since 2020 and the freeze that followed has also taught both that there are limitations to the use of coercive power—for China with regard to India, but also for India. So we are in a phase of searching for a new equilibrium. And I do not think that outcome will emerge anytime soon, particularly given the structural changes taking place globally, especially in the context of what the United States is doing.
[Dan Banik]
You know, I've been interacting with Chinese stakeholders for many years. I've had visiting professorships for the last 15 years in Beijing, but also in other parts of the country. And I've been coming quite regularly to India. I find the debate in the two countries quite striking.
In India, I've noticed a growing sense of China bashing in the last few years, which I find perplexing because, as you write in the paper, trade between the two countries is very important. I've been studying the Indian pharmaceutical industry for the last few years, and I know how dependent it is on Chinese active pharmaceutical ingredients. There are also significant imports of cheap phones and electronic gadgets. So I find this China bashing in the Indian media puzzling.
In China, I find the debate even more perplexing because India does not figure prominently in discussions. China is obsessed with comparing itself with the United States. A few years ago, I argued that BRICS and other Southern institutions were dead and buried, and now they are resurrected. We are seeing a rise of the Global South. Yet within that bloc, there are disagreements that are often papered over.
So if you think about the economic relationship, how would you characterize it? There is significant interaction and dependence between the two economies. It would serve both countries well if they collaborated rather than competed.
[Manoj Kewalramani]
Let me begin with the media element. If you look at the Indian media—and I have worked in it for several years in Delhi—there is seldom a country that does not receive criticism. It is not exclusive to China. The United States, despite being India’s closest partner over the past 20–25 years, receives deep skepticism in Indian media. Russia is perhaps the only country that avoids such criticism. But most others receive substantial scrutiny.
I would attribute much of this to the rise of nationalism in India, particularly since 2014, though it predates that period as well. Indian media is also very insular. There is limited resource deployment abroad in terms of correspondents. Coverage is India-centric and directed at a domestic audience. As a result, quality can suffer, and criticism becomes amplified.
That said, Beijing bears responsibility for some of the criticism it receives. In the first decade of this century, there was tremendous positive momentum. You had BRICS emerging. You had the idea of “Chindia.” Prime Minister Manmohan Singh even spoke of turning Mumbai into the next Shanghai. There was admiration for China’s developmental achievements.
From around 2009–2010 onward, however, Chinese actions—border incursions, stamped visas, harsher positions on India’s global aspirations—began to shift perceptions. The 2017 Doklam standoff further damaged public sentiment. When Chinese media republished rhetoric from 1962 threatening war, it affected an entire generation’s perception.
Since 2020, things have worsened. On the Chinese side, India is often portrayed negatively—bridges collapsing, corruption, infrastructure failures. Strategically, China views India primarily through the prism of its competition with the United States and as a market critical to its economic ambitions. It also sees India as a potential impediment to its regional dominance.
Economically, there is complementarity. Trade has continued to grow despite tensions. Trade with India accounts for about 10 percent of China’s global trade surplus—well over $100 billion. But India worries about coercive potential. Hence the discourse in India about de-risking, not decoupling, particularly in sectors like APIs, chemicals, and rare earths.
I remain optimistic trade can grow, but India will seek resilience in sectors where Chinese dominance is high.
[Dan Banik]
So Manoj, this show is about development. Social scientists have long compared India and China. Both started very poor—India in 1947, China in 1949—and both have reduced poverty substantially. But China leads on most development indicators, particularly in translating economic growth into concrete outcomes.
How do Indians view China’s achievements? Is there admiration for logistical capacity, infrastructure, high-speed trains? Or is the Chinese model rejected as authoritarian and unsuitable for India’s democratic context?
[Manoj Kewalramani]
It is a mix. There is admiration. You see this in popular discourse, on YouTube, among influencers discussing governance and policy. Infrastructure comparisons are common. Major Indian cities are dug up, and there is frustration with urban governance. People compare that to China’s speed in delivering infrastructure.
At the same time, there is recognition that the systems differ. China’s centralized governance may not suit India’s federal political economy. Strengthening union government control does not automatically produce better outcomes in India.
I think lessons can be learned at an operational level—pollution control, construction practices, project execution speed. But systemic transplantation is unrealistic given differences in federal structures, revenue authority, and public participation.
The challenge is political. When direct flights were suspended for five years, cross-pollination of ideas became impossible. Political ceilings constrain learning.
[Dan Banik]
My impression is similar. There is distrust rooted in history and Pakistan, but also disappointment given the numerous meetings between President Xi and Prime Minister Modi before relations deteriorated.
What do you think motivates Beijing? If China seeks to compete with the United States, India would seem a natural partner. Why does China not give India greater importance?
[Manoj Kewalramani]
In a Track II dialogue in China last year, we asked whether Beijing appreciates India’s aspirations as the fourth largest economy. We received no acknowledgment.
Beijing believes the balance of power strongly favors it and therefore sees accommodation as generosity. It views India transactionally rather than as an autonomous actor. India is often seen as an extension of American power or as opportunistic.
Another issue is India expertise in China. Analytical discourse often views India through U.S. competition, opportunism, regional hegemonism, or Hindutva. There is little focus on India’s developmental trajectory and aspirations.
This lack of expertise shapes leadership perceptions. It limits Beijing’s ability to understand how to work constructively with India.
[Dan Banik]
I agree on the lack of India expertise. Chinese think tanks devote substantial attention to Africa and Latin America, far less to India.
On pollution, for example, when the Chinese embassy highlighted Beijing’s success, it generated admiration but also backlash in India. Perhaps appreciating India’s democratic processes is uncomfortable from Beijing’s perspective?
[Manoj Kewalramani]
Perhaps partly. But incentives matter. I credit the Chinese embassy’s outreach efforts. However, instead of broadcasting success, it might have been more constructive to organize substantive exchanges and joint discussions.
Operational learning is possible. Legal frameworks differ, but approaches to construction dust, vehicle emissions, and enforcement could be shared. Audience matters—whether diplomats prioritize domestic or host-country audiences.
[Dan Banik]
Finally, looking ahead: with India disappointed by both Washington and Beijing, and with some reopening underway—flights resumed, investment scrutiny recalibrated—do you foresee economic engagement leading to political normalization? Or continued mistrust?
[Manoj Kewalramani]
Economics will not lead; politics comes first. A border flare-up can derail everything. Political normalization may enable economic engagement, not the other way around.
India should adopt a more nuanced approach to Chinese investment—scrutinize critical sectors but remain open otherwise. At the multilateral level, there are surface commonalities: commitment to the UN, WTO, BRICS, SCO. But divergences emerge quickly.
China opposes India’s permanent membership in the UN Security Council. Within BRICS, India resists anti-Western positioning. Even on issues like carbon taxes, common concerns may not translate into joint negotiating positions.
Philosophically, there is agreement on maintaining multilateral architecture. But beneath the surface, national power considerations create zero-sum thinking. That remains the structural challenge.
[Dan Banik]
I really enjoyed our conversation today, Manoj. Thank you very much for coming on my show.
[Manoj Kewalramani]
Thank you so much, Dan. Thank you for hosting me.