By – Delisha Clara Rao

Abstract

India-China relations in 2025 reveal both the persistence of asymmetry and the persistence and resilience of realist logic in international politics. This article examines how strategic interests drive cooperation and competition between the two Asian powers. It situates recent developments ranging from the Galwan clash and trade frictions to renewed engagement at the SCO Summit within a realist framework, while also acknowledging constructivist and liberal perspectives. Realism highlights the structural power imbalance and India’s need for hedging, constructivism underscores the enduring impact of historical memory and identity, and liberal institutionalism points to the stabilising role of multilateral fora. 

Introduction 

During a speech in the House of Commons, the 19th century British prime minister Lord Palmerston’s dictum  “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.” couldn’t be more accurate in the light of recent events with regard to India, U.S and China. From the imposition of American tariffs on India to the resurgence of a new era of diplomatic engagement between India and China, India’s tactical pivot toward alternative economic and diplomatic partners underscores a practical recalibration of its foreign policy. This article addresses the ways in which the new era of India-China relations, which is characterised by a long-standing trend of asymmetry and strategic dealings, is representative of the realist tradition.

Framework of Realism to understand state behaviour

For a long time, realism has functioned as the intellectual backbone for understanding and interpreting global politics, proposing that states are rational actors, and are compelled by imperatives of survival, autonomy, power and self-interest. Alliances are not absolute; they are driven by the agenda of national interests, which are prone to shift. While realism aptly explains how countries act, it does not capture the complex nature of statecraft. The oscillation of partnerships under external pressure aligns with realist logic, yet alternative schools of thought, such as constructivism and liberal institutionalism, highlight how identity, norms, and institutions shape, amplify, or restrain those manoeuvres. For instance, constructivism garners attention to the legacy of historical trauma. In the realm of Sino-Indian relations, the 1962 border war is an example. It also explores the persistence of national identity discourses and the place of status and reputation in Indian and Chinese external policies. At the same time, Liberal institutionalism dwells upon the importance of forums such as the SCO, BRICS, and the WTO as the place where the economic exchange and diplomatic processes not only open but restrain state options and give hope of engagement even among the strategic rivals.

Recent shifts in India-China relations

In the last decade, the arc of India-China relations has been marked by strategic stalemate and tactical engagement. The border conflicts in 2017 at Doklam and the violent clash of 2020 at the Galwan Valley caused the bilateral relationship to reach a point in recent history where there was almost no trust left between the two countries, the level of cross-border trade was practically shut down, and the limitations on Chinese investment and technology transfer into India were severe. However, during the period between 2024 and 2025, due to global pressures, the most notable one was the introduction of the 50 percent tariff on Indian exports by the Trump administration that changed the strategic equation. The reaction by the Modi government, which can be described as a typical display of realpolitik, did not involve retaliation against the United States. Rather, India has increased its pace towards diversifying the economy, has renegotiated free-trade agreements with the United Kingdom and the European Union, and has indicated a readiness to conduct business with China at both diplomatic and economic levels without sacrificing its fundamental security concerns. A leading point of bilateral relations was the Shanghai Cooperation Organisation (SCO) Summit in Tianjin in August 2025. It was the first visit in seven years and produced agreements on joint border patrols and reopening trade nodes. In economics, China has removed the ban on exports of rare earth elements and expensive machinery to India, interpreted as both appeasement and leverage. Thus, the bilateral relationship is now in a “management mode”, neither falling to the levels of previous animosity nor attaining complete normalization; this is where the potential and the vulnerability of the modern-day convenient friendship can be traced.

The Persistence of Asymmetry

The diplomatic detente between China and India is worth noting; however, asymmetry is the overriding feature of the relationship between the two countries. The gross domestic product and defence spending in China are by far much more than in India, and Chinese foreign direct investment is strategically targeted as compared to India in terms of access to Chinese markets. Simultaneously, power disparities at the border persist despite the disengagement policies.

The growing trade deficit which India has with China of more than 100 billion US dollars as early as 2025 itself remains a structural weakness, especially in high-technology, pharmaceuticals and mineral-rich energy. The monopoly of rare earths and major machinery and infrastructure that China holds in the market offers a long-term advantage. This inequality is seen by realism as a structural constant: the weaker state (India) has to hedge, diversify, and find partners outside (Quad, Vietnam, ASEAN), whereas the stronger state (China) has to coerce and induce to stabilize its periphery and contain the U.S. encirclement. However, according to neoliberal institutionalism, even asymmetric competitors may find it mutually advantageous to engage in an institutionalized manner, which in turn will result in lower transaction and escalation costs, as is the case with the Shanghai Cooperation Organisation and the BRICS system of an issue-management. Yet, such interdependence can also circumscribe India’s policy autonomy, compelling it to balance the advantages of institutional cooperation with the strategic necessity of retaining decision-making independence in critical sectors.

No Permanent Friends or Enemies in Action

The events of 2025 serve as a living laboratory for the insight of Palmerston. The reaction of Indian strategic analysts to the move by Washington was blatant, portraying it as a betrayal of trust and collaboration. However, the actual reaction of New Delhi was pragmatic, with the implementation of reciprocal measures and a fresh attempt at achieving autonomy. The multi-alignment doctrine adopted by India is doctrinally neutral: India enjoys the economic and diplomatic benefits of economic and diplomatic power centres without the drawbacks of formal balancing or bandwagoning. 

China, on its part, takes the initiative in asymmetric moments, which means periods when it can exploit existing power imbalances to advance strategic objectives. During the SCO Summit in 2025, Beijing oscillated between signs of collaboration and coercion, both to showcase Asian leadership and to ensure against being overexposed to Western repercussions. Such tactical malleability, of courting India in multilateral settings (SCO, BRICS), and pushing back through border politics and trade, can be seen as an embodiment of the realist approach to developing convenient friendships in a volatile world.

Theoretical Reflections: Realism, Constructivism, and Liberalism

The India-China case highlights the need to go beyond explanations of realism. Through constructivist analyses, it becomes clear that the collective memory of the 1962 conflict, the establishment of a discourse of civilizational rivalry, and a deep-rooted mistrust constantly define the perception of threats and the extent to which even pragmatically minded rapprochement is limited. Modern programs of public diplomacy by the two states claim ancient cultural connections and Asian solidarity, but military manoeuvres and media discourses continue to indicate an adversarial stance. The scholars of liberal institutions highlight the permanency of economic interdependence: total bilateral trade was over US 127 billion dollars in 2025, and believe that even hostile relationships can be recycled through multilateral fora. A comparative case study of other asymmetric rivalries, including Vietnam-China, where historical trauma is more present at the same time as active territorial conflict or U.S-China, where the competition is mediated by more thorough-going economic dependencies, shows that institutional involvement, institutionalized bargaining, and normative discourse are influential factors in softening, and sometimes even limiting, rivalry despite the large power distance. Unlike these cases, the India-China relationship remains constrained by an enduring strategic distrust that prevents sustained institutional cooperation or meaningful normalization despite increasing interdependence. In contrast, the India-China relationship remains uniquely constrained by enduring mistrust and a legacy of conflict that limits the effectiveness of institutional mechanisms and hinders normalization.

Limits and Dilemmas

However, there is still a high risk of miscalculation and crisis. The uncertain border truce, urgent economic reliance, and a basic incompatibility of vision between China and India as the hegemonic Belt and Road Initiative and Indian promotion of multipolarity inhibit the potential of easy friendship. Responses include Swadeshi and Aatmanirbhar Bharat, new trade agreements like CETA, and diplomatic outreach in Southeast Asia. Yet, as the literature on asymmetric relationships demonstrates, underlying power imbalances are rarely eliminated; at best, they are managed. At best, India and China can sustain a fragile equilibrium; at worst, rivalry may spiral despite institutional buffers.

Conclusion 

India-China 2025 reflects the timeless realism of Palmerston’s maxim: national interest remains the guiding principle in a multipolar world. In the case of India, having an active, even uneasy relationship with China, which could at times be competitive and at other times cooperative, is not a choice but a requirement. In the case of China, a well-managed relationship with India enables it to concentrate authority in the region, strengthening against an increasing level of Western opposition, and ensuring projected Asian unity.

The future of the relationship will be defined by the current struggle between the deep-rooted asymmetry and the imperative of pragmatic, interest-driven co-working, intermediated but not solved by the institutions, history, and identity. Temporary thaw may produce convenient cooperation, but enduring mistrust remains the defining challenge.

About the author

Delisha Clara Rao Essampally is a second year undergraduate student of Diplomacy and Foreign Policy at the Jindal School of International Affairs. Her interests lie in the study of peace and conflict studies as well as environmental studies and policy with a deep interest and passion for nature and wildlife. She also enjoys exploring her artistic abilities, delving into conspiracy theories and reading dystopian literature.

Image source: Gxu8zPnawAIBaYt.jpg