India-China Relations: Border Dispute & LAC

India–China Relations: Border Tensions, Economic Interdependence, and Strategic Competition

India and China are neighbours, major economies, and civilisational states with overlapping security and economic spaces. Cooperation on trade and multilateral forums sits uneasily alongside sharp military standoffs on the Line of Actual Control (LAC). This note explains the border dispute, recent crises, economic asymmetries, maritime and regional competition, and the pathways India pursues to manage risks while safeguarding autonomy.

Understanding the Border Dispute

The boundary is undefined; the LAC is a perception line. Three sectors matter:

Western (Ladakh): China controls Aksai Chin (~38,000 sq km) seized during the 1950s; India claims it. Depsang, Demchok, Pangong Tso, Hot Springs have seen standoffs.
Middle: Smaller disputes (Barahoti) with relatively fewer crises.
Eastern (Arunachal Pradesh): China claims the state as “South Tibet.” Tawang and adjacent areas are friction points.

Past agreements (1993, 1996, 2005, 2012, 2013 border protocols) sought peace and confidence-building (CBMs). The 2020 Galwan clash shattered decades of “no shots fired” understanding, killing 20 Indian soldiers; trust plummeted.

Post-2020 LAC Situation

Disengagement has occurred at some points (Pangong North/South banks, Gogra, Hot Springs) but Depsang and Demchok remain unresolved.
Both sides maintain heavy forward deployments, armour, artillery, and integrated surveillance; friction risks stay high.
Corps Commander-level talks and WMCC (Working Mechanism for Consultation and Coordination) continue; India insists normal ties require restoration of peace and tranquillity at the border.
Border infrastructure race: India accelerates roads, tunnels (Atal, Sela), bridges, and forward airfields; China expands dual-use villages and logistics hubs in Tibet/Xinjiang.

Historical Context and Triggers

1962 war: Set the tone; China held Aksai Chin, India vacated some forward posts.
1967 Nathu La/Cho La clashes: India held its ground; shaped deterrence in the east.
Doklam (2017): India intervened on Bhutan’s behalf to stop a Chinese road near the tri-junction; ended with disengagement but no resolution.
Galwan and subsequent face-offs (2020–21): Led to deaths and widespread deployments; CBMs eroded.

Maritime and Regional Competition

China’s naval expansion and port footprint in the Indian Ocean (Gwadar, Hambantota, potential use of ports in Myanmar, Bangladesh, and East Africa) worry India. India’s counters include access agreements (Duqm in Oman, Changi in Singapore, Agalega with Mauritius), Andaman & Nicobar deployment, and cooperation with partners (Quad) for maritime domain awareness. India’s SAGAR doctrine emphasises being a net security provider in the region.

Economic Interdependence and Risk

China is a top trading partner; trade has hovered around USD 115–120 bn in recent years with a large deficit (~USD 80 bn); check the latest release for precision.
Dependence: Electronics, telecom gear, solar modules, APIs/chemicals; critical to Indian manufacturing and pharma.
India has tightened investment screening (Press Note 3) and banned many apps citing security; supply-chain diversification and PLI schemes aim to reduce reliance.
Despite tensions, firms continue to import Chinese inputs; decoupling is partial and gradual.

Multilateral and Global Arenas

Cooperate and compete within BRICS, SCO, G20, and climate forums. China blocks India’s NSG entry and some UN terror listings (sometimes later cleared); India pushes UNSC reform.
India walked away from RCEP over market access and safeguard concerns; China leveraged RCEP for regional economic influence.
On Ukraine and other global issues, both emphasise sovereignty but differ on messaging; India balances ties with US/Europe/Russia while engaging China in multipolar rhetoric.

Information, Cyber, and Technology

Concerns over cyber intrusions and grid targeting have surfaced; India has increased scrutiny of Chinese telecom vendors and apps. Technology competition spans 5G/6G standards, semiconductors, rare earths, and AI—areas where China holds scale advantages. India is pursuing trusted networks and indigenous alternatives.

Boundary Management: What Works, What Failed

CBMs and protocols reduced incidents for decades but lacked verification and clarity on LAC perception—Galwan exposed these gaps.
Hotlines and flag meetings help de-escalate tactically but do not fix core disputes.
Joint exercise “Hand-in-Hand” is suspended; political-level engagement is cautious.
India’s stance: border peace is the basis for normal ties; China seeks to compartmentalise and keep economics separate.

Neighbourhood and Third-country Theatre

Competition extends to South Asia and the Indo-Pacific. Belt and Road projects in Pakistan (CPEC), Sri Lanka, Bangladesh, Nepal, and Maldives give China leverage. India counters with grants/credit, connectivity (BBIN, coastal shipping, power grids), and SAGAR outreach. Smaller states hedge; speed, transparency, and local benefits decide influence.

Internal Security and Border Communities

Border residents in Ladakh/Arunachal are critical eyes and ears. Vibrant Villages Programme, connectivity, telecom, and livelihood schemes aim to anchor populations. Dual-use Chinese “Xiaokang” villages near the LAC raise concerns about creeping control and grey-zone tactics.

Grey-zone Tactics and Escalation Risks

Patrol face-offs, temporary encampments, and infrastructure races create friction.
PLA’s integrated use of drones, electronic warfare, and rapid road/rail from Tibet enhances mobility.
Escalation risks: accidental clashes turning lethal; misperception of intent; cyber disruptions to critical infrastructure.

Trade-offs for India’s Strategy

India balances deterrence on the LAC, diversification of supply chains, and engagement in multilateral forums. Costs include higher defence spending on the northern front, slower economic decoupling (given dependence), and the need to maintain ties with partners without appearing part of a containment bloc.

Infrastructure and Logistics

India’s Border Roads, tunnels (Atal, Sela), and bridges (Dhola–Sadiya, Siyom) improve mobility. ALGs in Ladakh and NE, better ISR, and winter stocking reduce vulnerability. China’s advantage: high-altitude roads/rail (Lhasa–Nyingchi), model villages, and logistics depth into Tibet/Xinjiang.

Possible Off-ramps and Confidence Measures

Clarifying the LAC alignment has long been resisted by China; incremental steps like buffer zones after disengagements are interim solutions.
Reviving military-to-military exercises post-stabilisation could rebuild predictability.
Hotline upgrades and incident-prevention protocols for air/naval encounters (especially near Arunachal and Indian Ocean) would reduce mishaps.

Data Points to Keep Updated

Trade volume and deficit; API/electronics import dependence percentages.
Disengagement status at each friction point; number of Corps Commander meetings held.
New infrastructure (tunnels, bridges, airstrips) commissioned on both sides.
Chinese naval presence/port calls in the IOR and Indian access agreements coming online.

Takeaway: India–China ties are defined by unresolved boundaries, power asymmetry, and overlapping spheres of influence. Armed coexistence with deep economic linkages will persist. India’s approach blends deterrence and infrastructure on the LAC, diversified supply chains, partnerships in the Indo-Pacific, and selective engagement in multilateral forums—all aimed at preventing unilateral changes to the status quo while keeping economic and diplomatic space open.

Early Engagement and Breakdown

Panchsheel (1954) and the “Hindi–Chini Bhai-Bhai” phase reflected hope. China’s 1950 takeover of Tibet and construction of the Aksai Chin road (1950s) set the stage for dispute. Talks in 1960 failed; the 1962 war followed. Sporadic clashes (Nathu La 1967, Tulung La) and a final firing incident in 1975 (Tulip post, Arunachal) were followed by a long quiet period under CBMs until 2020.

Why the Boundary Remains Unsettled

Different historical claims: Johnson/Ardagh (India) vs Macartney–MacDonald (China) lines in the west; McMahon Line vs China’s rejection in the east.
LAC perceptions differ; there is no mutually accepted map exchanged.
China’s broader strategic calculus links boundary concessions to overall power balance; India insists on clarity and peace as a prerequisite for normal ties.

Water, Environment, and Data Sharing

China is the upper riparian for the Brahmaputra and Sutlej; hydropower projects on the Yarlung Tsangpo raise concerns about flow alteration and dam safety. Data-sharing agreements on hydrology exist but transparency remains limited. Climate change and glacier melt may alter flows and sediment, adding another layer of risk and the need for cooperation or at least predictability.

India’s Defence and Diplomatic Responses

Forward deployment and improved logistics to reduce reaction time on the LAC.
Induction of high-altitude capable systems (light tanks under development, ultra-light howitzers, drones); upgrade of ISR and communications.
Diplomatic linkage: insisting that broader normalisation (trade, people ties) cannot be de-linked from LAC stability.
Partnerships: Quad, access agreements, and intel sharing with friendly navies to balance maritime presence.

Economics: Diversification vs Reality

Production-Linked Incentive (PLI) schemes, trusted vendor policies, and export promotion aim to reduce dependence on Chinese components. Some traction exists in electronics assembly and renewables, but upstream inputs (cells, wafers, components) still lean on China. Pharma APIs and chemical intermediates remain heavily dependent; domestic build-up and alternate suppliers (EU, US, ASEAN) are being pursued but will take time.

Standard Setting and Tech Competition

Standards in 5G/6G, EVs, batteries, and AI will shape future markets. China invests heavily in standard bodies; India’s “trusted sources” policy keeps some Chinese vendors out of core networks. Open RAN and indigenous 5G/6G research are part of India’s answer to vendor concentration.

Public Perception and Information Domain

Survey data in India show low trust of China post-Galwan; calls for boycotts surface periodically. Chinese media portrays India as part of US-led balancing. Managing narratives is part of crisis stability; both sides have used “agreements on the ground” messaging after disengagements to signal control.

Boundary Talk Mechanisms

Special Representatives (SR) dialogue on boundary question (NSA-level) addresses the political framework; stalled in recent years.
Corps Commander and WMCC are tactical/operational; they handle disengagement and protocols.
Joint Working Group (historical) and earlier diplomatic channels built incremental CBMs but did not fix the core issue.

India’s Regional Calculus

India is strengthening BIMSTEC and the Indo-Pacific Oceans Initiative to create alternatives to China-led platforms. Act East policy links Northeast connectivity (India–Myanmar–Thailand highway, Kaladan project) to maritime outreach. Progress has been slow due to security and execution challenges—China’s BRI has moved faster in some neighbours, though debt and sustainability questions have surfaced (Sri Lanka, Pakistan).

Trade-offs on Cooperation

Climate: Both call for equity and finance; India seeks faster tech/finance flows, China positions as developing but is the largest emitter.
Health: Limited pharma API cooperation; pandemic diplomacy exposed supply-chain leverage.
Multilateral finance: AIIB and NDB (BRICS) see Indian participation; India weighs benefits vs dependence.

Future Scenarios

Managed stalemate: Likely near term—buffer zones, talks continue, trade persists with diversification efforts.
Limited escalation: Possible if patrol incident spirals; deterrence and communication are critical.
Gradual disengagement and CBM refresh: Would require mutual pullbacks and clearer protocols; hinges on political will.

Key Dates and Facts to Keep Handy

LAC length often quoted as ~3,488 km (disputed); India uses this figure.
Agreements: 1993, 1996, 2005, 2012 (agreed guiding principles), 2013 border defence cooperation.
Major incidents: 1962 war; 1967 Nathu La; 1975 Tulip post firing; 2017 Doklam; 2020 Galwan and subsequent standoffs.
Trade: roughly USD 115–120 bn; deficit about USD 80 bn (use the most recent data available).

Bottom line: India cannot wish away geography or economic reality. It is building deterrence on land and sea, hedging dependencies, and working with partners—while keeping channels open to prevent crises and explore limited cooperation where interests align.

Pakistan Factor and CPEC

The China–Pakistan Economic Corridor (CPEC) passes through Gilgit-Baltistan (claimed by India), linking Xinjiang to Gwadar. India opposes the sovereignty violation and worries about dual-use facilities at Gwadar/Karachi. CPEC loans have strained Pakistan’s finances, but the infrastructure provides China redundancy to Malacca chokepoint reliance. India’s connectivity alternatives (IMEC, Chabahar, INSTC) aim to bypass Pakistani territory.

Domestic Politics and Public Opinion

Border tensions raise nationalist sentiments; policy space narrows for compromise. Trade restrictions on Chinese apps and equipment gained public backing. In China, state media frames India through a power-asymmetry lens; that narrative affects flexibility. Crisis management must navigate domestic optics on both sides.

People-to-People and Soft Links

Educational exchanges and tourism are minimal compared to other relationships; language and visa hurdles persist. Cultural diplomacy is limited. Academic collaboration in STEM exists but is cautious amid IP and security concerns. Track-II dialogues have shrunk since 2020, reducing informal buffers.

Opportunities if Tensions Ease

Climate cooperation on Himalaya glaciology, air pollution transport, and disaster management could be mutually beneficial.
Trade rationalisation with safeguards could reduce costs for industry and consumers; joint work on standards might lower friction.
River data and dam safety mechanisms could reduce downstream risks if trust improves.

Risks of Over-reliance on Partners

While partnerships help balance China, over-securitising everything risks losing strategic autonomy and economic options. India must calibrate how much alignment with external partners is needed to deter China without triggering a counter-reaction or undermining flexibility in other theatres (West Asia, Russia).

Logistics and Force Posture

Integrated theatre commands (under consideration in India) will influence resource allocation across fronts. For China, Western Theatre Command manages the India border; jointness and rapid infrastructure give the PLA agility. India’s dual-front planning (Pakistan + China) stretches budgets—prioritisation and indigenous production are critical.

Supply Chain Security and Industry

Electronics, EV batteries, and solar supply chains are heavily China-centric. India’s goal is to build local ecosystems (cells, modules, batteries, electronics sub-assemblies) and tap trusted partners (Japan, Korea, EU, US). Success will determine how much strategic leverage China retains via trade interdependence.

Legal and Map Warfare

China periodically renames places in Arunachal and issues new maps. India rejects these acts; they aim to reinforce narrative claims. Legal and cartographic signalling will likely continue; India counters with its own maps and diplomatic protests.

Indian Ocean Watchpoints

PLA Navy deployments (anti-piracy, research vessels, submarine visits) are tracked closely. Dual-use research vessels near India’s EEZ raise concerns about seabed mapping and submarine advantage. India’s fusion centres and cooperative surveillance with partners aim to maintain awareness and push back where needed.