India and China ended 2025 on a cautiously positive note, making efforts to normalise relations after more than four years of tension following the eastern Ladakh boundary conflict. The road to reconciliation began after both countries agreed in October 2024 to end the protracted border standoff, which had persisted since the 2020 Galwan clash, a confrontation that had dramatically strained bilateral ties.

High-Level Engagements and Diplomacy

The normalisation process gained momentum through sustained diplomatic engagement. National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi, serving as Special Representatives on the boundary question, took initial steps to gradually improve dialogue and rebuild mutual trust. In July, External Affairs Minister S. Jaishankar visited China, stressing the importance of building on “good progress” in normalising ties to address border-related concerns, including de-escalation and conflict management.

In August, Prime Minister Narendra Modi and President Xi Jinping met in Tianjin on the sidelines of the Shanghai Cooperation Organisation (SCO) summit. The meeting occurred under the backdrop of US President Donald Trump’s tariff threats targeting both China and India, which provided an additional incentive for cooperation. During the meeting, both leaders reaffirmed that India and China are development partners, not rivals, and emphasised the importance of “a stable relationship and cooperation” based on mutual respect, mutual interest, and mutual sensitivity. Modi highlighted that both countries pursue strategic autonomy and their bilateral relations should not be interpreted through the lens of third-party countries.

There is a possibility that President Xi Jinping may visit India in 2026 to attend the BRICS summit, an event expected to further accelerate the pace of normalisation.

Steps Toward Normalisation

The easing of tensions was accompanied by practical measures to restore connectivity and people-to-people exchanges. Indian pilgrims’ visits to Kailash and Mansarovar in Tibet resumed after a long hiatus, visa procedures were simplified, and flights connecting major cities were restored after over five years of disruption. These steps symbolised a renewed willingness to engage and cooperate despite lingering strategic differences.

Challenges Remain

Despite these positive developments, several issues continued to challenge bilateral ties. China’s support for Pakistan during India’s Operation Sindoor in May highlighted the complications arising from Beijing’s close military and strategic relationship with Islamabad. China supplies over 81 per cent of Pakistan’s military hardware, and Indian officials, including Deputy Chief of Army Staff Lt General Rahul R. Singh, asserted that Beijing used the conflict as a “live lab” to further its strategic interests, a claim China did not directly address.

Bilateral relations were further strained by incidents such as the detention of Indian national Prema Thongdok from Arunachal Pradesh at Shanghai airport in November. Chinese immigration officials allegedly detained her for 18 hours during a transit stop, refusing to recognise her Indian passport due to her Arunachal Pradesh origins. New Delhi lodged a strong protest and demanded assurances that Indian citizens transiting through Chinese airports would not be “selectively targeted or harassed,” while reiterating its sovereignty over Arunachal Pradesh.

Trade-related tensions also posed challenges. China temporarily blocked exports of key rare-earth metals, affecting Indian industries, including automobile manufacturing. While selective export licenses were later issued, particularly following an agreement with Washington to lift restrictions on semiconductor chips, Indian officials have noted that full access remains limited.

Economic Engagement and Trade

Despite these recurring tensions, India-China trade continued to grow, albeit with persistent imbalances. China’s exports to India reached USD 70 billion in the first half of 2025, up 18.5 per cent year-on-year, while Indian exports to China grew by 22 per cent to USD 8.41 billion in the same period. Officials acknowledge that while the increase in Indian exports is a positive sign, China needs to provide greater market access for a more balanced trade relationship.

China is also promoting the revival of the Russia-India-China (RIC) trilateral mechanism as a platform to address unilateral policies pursued by the United States and counter moves perceived to undermine globalisation.

Strategic and Political Context

Officials from both sides stress that the relationship is on a positive trajectory despite enduring strategic rivalry and unresolved disputes. Both nations recognise the need for a stable border, continued dialogue, and cooperation in multilateral forums to ensure regional stability. Analysts note that while India and China continue to maintain strategic caution, the resumption of dialogue, trade normalisation, and cultural exchanges reflect a mutual interest in preventing bilateral tensions from escalating into larger disputes.

Looking Ahead

As 2025 closes, the India-China relationship is in a phase of careful reconstruction. The focus is on building trust, managing disputes responsibly, and leveraging economic and cultural ties to sustain long-term engagement. With high-level visits, continued dialogue, and targeted cooperation in areas such as trade, infrastructure, and multilateral diplomacy, both countries appear committed to keeping their relationship constructive while maintaining strategic autonomy and safeguarding national interests.

Despite past tensions and ongoing challenges, 2025 marks a year in which India and China have actively pursued the normalization of ties, setting the stage for a potentially more stable and cooperative bilateral relationship in the coming years.