About the author
Sebastian Contin Trillo-Figueroa
Geopolitics Analyst
EU-Asia Consultant
"The supreme art of war is to subdue the enemy without fighting."
Sun Tzu, The Art of War, 5th century BCE
"The enemy's enemy is a friend."
Kautilya, Arthashastra, 4th century BCE
Parallel Interests Diplomacy
The resumption of direct flights between China and India, settled in January 2025, marked a turning point in Asia's great power relations. Beyond the traditional binary of ally-versus-adversary, the world's two most populous nations are pioneering a model of "parallel interests diplomacy," where geopolitical rivalry and economic interdependence coexist and strengthen each other, aiming to rebuild mutual trust. This new framework could offer a blueprint for how rising powers respond to increasingly unstable international relations.
Differing motivations notwithstanding, China and India seek to convert external Western volatility into internal Asian flexibility, in anticipation of renewed economic conflict. This pragmatism manifested through a sequence of diplomatic breakthroughs in late 2024. Following the traumatic Galwan Valley clash of 2020, which had militarized their shared Himalayan frontier, both sides walk toward reconciliation. An agreement to ease tensions along the Line of Actual Control (LAC) preceded the first meeting in five years between President Xi Jinping and Prime Minister Narendra Modi at the BRICS summit in Russia, followed by the productive 23rd Meeting of Special Representatives.
The catalyst for these moves came from an unlikely source: Donald Trump's return to the White House. Both powers, having weathered the brunt of American economic protectionism under his previous term, found common cause in their shared vulnerability to US pressure. In the case of China, efforts to restrict Beijing's technological ascent and export controls also accelerated the drive for self-reliance and industrial autonomy, while potential new measures stoked unease.
With India, US actions proved inconsistent. The push to position New Delhi as a counterbalance to Beijing - through deeper defense and tech ties - produced mixed outcomes. Trump's revocation of India's special trade status during his first term in the White House and harsh rhetoric, calling India a "tariff king" and a "big abuser," fueled lasting mistrust, despite Biden's later framing of the US-India relationship as "the defining partnership of the 21st century."
Ancient Wisdom, Modern Strategy
These developments reflect a joint recognition that managed tension serves better than outright hostility. Both nations draw on their ancient philosophical traditions, blending historical wisdom with contemporary pragmatism. China's strategy, influenced by Sun Tzu's teachings on indirect power projection, emphasizes economic leverage and strategic encirclement over direct confrontation.
The Belt and Road Initiative exemplifies this approach, extending China's influence into South Asia, including Pakistan, Sri Lanka, and Bangladesh. Beijing's deepening ties with Pakistan - India's enduring adversary - coincide with Islamabad's drift from Washington, exposing the shortcomings of New Delhi's Neighborhood First Policy and underscoring the impact of Beijing's "community with a shared future for mankind." The Maritime Silk Road amplifies this strategy, with its influence on choke points and harbors, reshaping the Indian Ocean's balance.
India's shift from non-alignment to multi-alignment, drawing from Kautilya's pragmatic realism, enables engagement across a broad spectrum of multilateral platforms, including the Quad, G20, the Indo-Pacific Economic Framework for Prosperity (IPEF), the Shanghai Cooperation Organization (SCO), BRICS+, the I2U2, the India-Brazil-South Africa (IBSA) Dialogue Forum, the South Asian Association for Regional Cooperation (SAARC), the Minerals Security Partnership (MSP), and the Russia-India-China (RIC) triangle. This tactical balancing act allows India to maintain relations with the West, China, and the Global South without fully committing to any bloc - at the risk of seeming as though it's nowhere at all. Indian External Affairs Minister Subrahmanyam Jaishankar declared that in 70 years, Bharat would be a "southwestern power."
New Delhi seeks simultaneously recognition as a global power, the leading voice of developing nations, and the bridge between the Global South and the West. For the Indian government, this strategy reflects its ambition to expand its influence while preserving foreign policy autonomy - an aspiration easier declared than achieved. However, these contradictions have sparked both praise for India's dynamic soft-power approach and skepticism about its consistency, with many questioning the ruling Bharatiya Janata Party's (BJP) method, and, ultimately, India's credibility in external affairs.
The key inquiry is whether India can truly balance these competing roles - which the West embraces uncritically to serve its own interests, applying different standards to Beijing and New Delhi. India's limited regional leadership in South Asia undermines its global aspirations, while its claim to lead the Global South falters as it downplays China's influence and ignores Beijing's substantial investments in the bloc, where New Delhi struggles to keep up. As a result, China views today India largely through the prism of China-US rivalry, recognizing that in a potential China-US conflict, India would stay on the sidelines as long as its security remains unaffected.
Further complicating this balance, New Delhi invests less in defense and possesses fewer military capabilities than Beijing, seeking to offset this by strengthening defense ties with Western powers. However, its continued reliance on Russian arms and energy - India became the largest buyer of Russian oil, surpassing China in July 2024 to account for 44% of its total oil imports - exposes stark inconsistencies that challenge the durability of such positions.
Despite these contradictions, both nations' strategies are deeply rooted in cultural traditions emphasizing hierarchy, indirect influence, and strategic patience. These elements sharply contrast with the Westphalian model of sovereign states, enabling China and India to engage in a more flexible, calculated rivalry that transcends the simplistic ally-adversary binary that has defined their past interactions.
Competing Giants, Co-Dependent Economies
The philosophical and political approaches of both nations converge most strikingly in their economic relationship, where competition and interdependence foster a fragile yet strategic balance of rivalry and cooperation. From 2016 to 2023, trade between the two grew by 66.38%. By 2024, China had reclaimed its status as India's largest trading partner, with bilateral trade reaching 118.4 billion USD. Nevertheless, India faced a substantial trade deficit of 85 billion USD.
Indian protectionism, through investment screening, restrictions on strategic firms, and technology access limits, seeks to curb reliance on China. Yet, the Make in India initiative, despite promoting domestic manufacturing, remains entangled with Chinese supply chains and investment, underscoring the complexity of economic decoupling.
In an era of intricate global supply chains, competition demands selective cooperation. The China-India trade relationship highlights how economic interdependence is not merely a remnant of globalization but an evolving reality that resists zero-sum thinking. India's 2024 economic survey noted this while recognizing a counterintuitive truth: rather than full decoupling, strengthening Indian manufacturing requires deeper integration with Chinese inputs.
Disengaging from China's vast trade network - often euphemized in New Delhi's policy circles as "a particular geography" - remains daunting, requiring the unwinding of decades of deep integration. Paradoxically, despite the US trade war, global dependence on China has intensified, while China itself has become less reliant on the world.
Similarly, if the West pivots toward India, it may still rely on China for key materials, as parts of the Indian economy remain tied to Chinese exports. This risks merely substituting one dependency for another while pressuring New Delhi to enable Chinese re-exports. Yet, as long as these interdependencies do not escalate into liabilities, they serve as a stabilizing force in an otherwise volatile environment.
Indeed, both nations approach this interdependence from distinct positions of strength and constraint. China's core challenge is geopolitical - managing its rise without triggering comprehensive Western containment. Domestically, it faces weak consumer sentiment, deflationary risks, and demographic headwinds. The Communist Party of China's control over the renminbi allows for a strategic currency devaluation to sustain competitiveness, but such measures risk further instability.
India, in contrast, confronts structural economic challenges. Now the world's fifth-largest economy and projected to become the third-largest by the decade's end, New Delhi must enact substantive reforms to emerge as a credible alternative for foreign investment under the China Plus One strategy. Its massive demographic dividend is an asset and a liability; while offering labor advantages, it requires rapid job creation - 90 million before 2030 - and modernization to prevent economic stagnation. The local elite doubts this can be achieved, fearing unrest if expectations go unmet.
The economic and institutional challenges extend beyond these issues. Urbanization remains largely insufficient, stifling growth in cities. Extreme poverty, income inequality, and insufficient development endure as fundamental barriers, preventing the rise of a robust middle class. On the positive side, the country's annual growth remains remarkable, offering promising yet still multifaceted prospects.
Despite comparable populations, China's economy is five times the size of India's, a gap driven by Beijing's state-led industrial policies, supply chain dominance, and foreign capital magnetism. India's ambition to become a developed nation by 2047 under the Viksit Bharat (developed India) initiative takes a different route, emphasizing self-reliance through Atmanirbhar Bharat (self-reliant India) and a digital-first approach to bypass industrial bottlenecks. This divergence opens room for complementary development: China's sustained need for market access aligns with India's demand for investment and technological expertise, turning economic asymmetry into potential synergy.
China's long-term vision runs on a parallel timeline. Xi's national rejuvenation, set for 2049, envisions a "modern socialist country" built on technological self-sufficiency, military modernization, and economic strength. Policies like dual circulation reinforce this by cutting reliance on foreign markets while advancing domestic innovation and production. In contrast, Viksit Bharat prioritizes self-reliance and digital growth, whereas China's trajectory positions it for global influence through economic and tech autonomy.
Both nations share a common goal of challenging the Washington Consensus, proving that economic development can take multiple paths by blending state intervention with market mechanisms to suit their historical and institutional realities. Their distinct models signal the emergence of viable alternatives to Western-led economic orthodoxy.
Conversely, doubts about India's long-term trajectory persist. While New Delhi holds significant potential, structural and institutional constraints may hinder it from capitalizing on its advantages as effectively as Beijing. Late Singaporean Prime Minister Lee Kuan Yew's skepticism stemmed from these very impediments, which he believed would perpetually hinder its ascent. As Harvard's Graham Allison recounts, Lee saw India's entrenched caste system as antithetical to meritocracy, its bureaucracy as an obstacle to efficiency, and its fractious social fabric as a permanent source of political distraction. In 2014, he dismissed comparisons outright, asserting, "Do not talk about India and China in the same breath."1
A decade later, India's rise is not guaranteed simply because China faces economic and geopolitical headwinds. While New Delhi has gained prominence, converting its demographic advantage into sustained economic and geopolitical dominance remains an open question. Societal cohesion poses a particular concern. The rise of Hindutva ideology and intensifying religious polarization - symbolized by developments like the Ram Mandir in Ayodhya - underscore this divide. With 200 million Indian Muslims increasingly cast as "the other" and an executive branch pursuing populist nationalism, social stability will be crucial to India's trajectory. Whether New Delhi can emulate China's ascent will depend on its ability to overcome these structural and societal constraints.
Beyond Zero-Sum Geopolitics
The philosophical underpinnings, geopolitical interests, and economic interdependence of the China-India relationship ultimately offer two key lessons. First, it demonstrates that competition and cooperation are not mutually exclusive, even after military standoffs and amid alignments with opposing blocs. Their model of strategic coexistence suggests that great powers can handle rivalries without rigid ideological camps or inevitable confrontation. Second, it highlights how civilizational states, shaped by distinct historical trajectories, develop diplomatic strategies that diverge from Western templates of engagement.
Currently, China and India have adopted an incremental strategy that compartmentalizes friction points. Their ability to sustain robust, balanced trade ties while managing territorial tensions, or to engage in global governance efforts while advancing independent strategic goals, will measure if diplomatic flexibility defies zero-sum logic.
Since both nations commemorate 75 years of diplomatic relations in 2025 through cultural exchanges, think tank collaborations, and people-to-people connections, their bond demonstrates that major powers can contest and cooperate without falling into the trap of inevitable conflict. This model of "parallel interests diplomacy" defies conventional geopolitical frameworks.
Likewise, as states operate within an international system marked by competing power centers, the China-India balance between competition and cooperation offers an example for maintaining autonomy without isolation. If successful, their approach could influence not only the course of the much-discussed Asian Century but also the broader evolution of the global order, where influence hinges less on dominance and more on the ability to manage competing interests without destabilization.
The "tectonic Asian realignment" is undeniably seismic, deeply rooted in Asia, and still unfolding, with its ultimate nature yet to be seen.
1. Graham Allison, "Will India Surpass China to Become the Next Superpower?," Foreign Policy, June 24, 2023, https://foreignpolicy.com/2023/06/24/india-china-biden-modi-summit-great-power-competition-economic-growth/.
This article is from the February issue of TI Observer (TIO), which explores Asia in micro and macro scale during this unprecedented period of uncertainty in decades, highlighting the shifting economic ambitions, security concerns, and diplomatic strategies of Asian countries in the process of redefining their positions within an increasingly multipolar world. If you are interested in knowing more about the February issue, please click here:
http://en.taiheinstitute.org/UpLoadFile/files/2025/2/27/162841654bb4b4485-6.pdf
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