The SCO Summit gave the world striking images of Modi and Xi together. Behind the cameras lies a more complex story of disputes, dependencies, and a slow reset.
India China relations have moved through a difficult decade since the Galwan Valley clashes of 2020. By 2025, both countries took deliberate steps to reset the relationship without abandoning core positions. The first meeting of Modi and Xi on Chinese soil in seven years, regular ministerial visits, and an expert group on the boundary question all marked this new phase. For ISS, this is the most testable bilateral topic of the year.
Where the relationship stood post 2020
After the violent border clashes at Galwan, normal diplomatic and military engagement was severely strained. Trust eroded across multiple verticals, including economic, cultural, and political. Trade continued to grow, paradoxically, as Indian dependence on Chinese inputs in electronics, pharmaceuticals, and capital goods deepened. India tightened scrutiny on Chinese investment and on certain digital apps.
The 2025 reset
In June and July 2025, Indian defence and foreign ministers visited China for the first time since the Galwan clashes. Chinese Foreign Minister Wang Yi visited India in August. The SCO Summit in Tianjin reaffirmed the reset. The Indian Ministry of External Affairs noted that the two countries are development partners and not rivals. Both sides agreed to set up an Expert Group under the Working Mechanism for Consultation and Coordination on India China Border Affairs to explore early harvest of boundary delimitation.
Why now
Multiple factors contributed. US tariff pressure on both India and China created shared incentives. India needed to diversify trade and reduce single market exposure, especially after the US tariffs. China wanted to ease pressure from a tightening Western coalition. Domestic priorities in both countries also pushed for stability. None of this means that disputes are resolved. It means the dialogue track is active.
Key irritants that remain
The boundary question, the China Pakistan Economic Corridor, China’s strategic activities in the Indian Ocean, and India’s persistent trade deficit with China are real issues. India is also wary of a flood of cheap Chinese imports threatening its domestic industries, especially in textiles, toys, electronics, and steel. The reset is therefore a stabiliser, not a solution.
India China Reset: Pillars and Pressures
| Pillar of Reset | Live Pressure Point |
| Border dialogue and disengagement steps | Final boundary delimitation |
| High level political engagement | China Pakistan Economic Corridor |
| Trade and investment normalisation | Persistent trade deficit |
| Multilateral cooperation in SCO and BRICS | Indian Ocean strategic concerns |
A Real Aspirant Story
Picture a small electronics MSME owner named Deepak in Noida. He imports specialised components from China for his manufacturing line. During the worst of the 2020 to 2022 phase, his shipments faced uncertain timelines. Today, with eased visas, formal dialogue, and predictable customs handling, his business plans are stable. The reset is not a friendship pledge. It is a productivity insurance policy for thousands of Deepaks.
Bridge to the Next Topic
While India works on managing relations with China, it also strengthens partnerships with other Asian powers. The India Japan Strategic Partnership reached a new high in 2025. Read here