Indo-China Relations

Indo-China Relations

This article deals with ‘Indo-China Relations.’ This is part of our series on ‘International Relations’ which is important pillar of GS-2 syllabus . For more articles , you can click here



Brief History of Indo-China Relations

Historical Ties

  • Indo-China Relations date back to ancient times.
  • Buddhism traveled from India to China.
  • Chinese travelers like Fa Hien, Xuanzang etc traveled India
  • Both were part of Silk Road Trade + Chinese inventions like paper making, sugar making etc came to India


Initial Years in Indo-China relations

Both became independent at same time

  • India was Non Aligned  || China under Mao was Communist
  • Nehru wanted good relations with China => Due to this reason, when Chinese Army entered Tibet and took it over, India recognised Tibet as part of China and   gave up Indian rights over Tibet  in 1954 (like Right to station army , control over post & telegraph etc)
Panchsheel, 1954 India was disappointed at China’s Tibet policy. But, for the sake of friendship and as confidence building measure, they signed Panchsheel


Five principles of Panchsheel were also incorporated in the agreement of 1954

  • Mutual respect for each other’s territorial integrity & sovereignty;
  • Mutual non‐aggression;
  • Mutual non‐interference in each others internal affairs;
  • Equality and mutual benefit; 
  • Peaceful co‐existence.


Prelude to war
  • Lhasa Uprising in 1959 & Dalai Lama came to take refuge in India =>  China took impression that India is trying to support the uprising
  • Global Situation – Khrushchev came  to power in USSR . He was reformist unlike Stalin . Khruschev was not liked by Mao & China started to fear  both USA & Russia


War of 1962 Reasons of War

  • Case of Tibet : Chinese felt that uprising in Tibet was supported by India
  • China was ambitious country & both India & China wanted to be leaders of Afro-Asian world
  • Undefined borders between China & India. China refused to accept Macmohan Line & India refused to accept Aksai Chin is part of China .
  • For Mao , Nehru was bourgeois leader


Impact on Sino – Indian Relations

  • Freeze in Sino-Indian relations till 1988 . There was permanent hostility
  • Emergence of alliance between China & Pakistan .
  • Pushed India to the side of USSR
  • Massive militarisation & nuclearisation in india


Confrontation in 1986-87 Sumdorung Chu in eastern  sector where both armies came in near conflict impacting Indo-China Relations



Rajiv Gandhi Visit in 1988 A new beginning : 

Joint communiqué stressed on  need to restore friendly relations & work towards a mutually acceptable solution to border dispute.


2003 Another landmark visit

Atal Bihari Vajpayee’s visit brought about marked improvement in the post 1998 n-test freeze in relations.


2014 President Xi Jinping Visits India


2015 Modi’s visit to China


2016 President Xi Jinping Visit to India in BRICS Summit (Goa)


2017 Doklam Issue started


  • Wuhan Summit : Informal Summit between Modi and Xi Jinping
  • Modi visit to China to participate in SCO Summit




Issue 1: Territorial Disputes

Indo-China Relations
Disputed Areas


There are three sectors  where boundaries are disputed by India & China

Western Sector
  • Aksai Chin in J&K : Held by China & demanded by India
  • Shaksgam Valley : Given by Pakistan to China (from PoK)
Middle Sector Himachal & Uttaranchal Border
Eastern Sector
  • Disputed McMahon line .
  • They demand almost whole of Arunachal Pradesh .
  • Questions Indian sovereignty over Sikkim

Since boundaries are not clearly demarcated . Hence, lot of incursions take place and impacts Indo-China Relations.


Aksai Chin Issue

  • Territorial dispute over Aksai Chin can be traced back to the failure of the British Empire to clearly demarcate a legal border between its Indian colony and China.
  • As two borders between India and China were proposed during the time of the British Raj –
        • Johnson Line :  shows Aksai Chin under Indian control
        • McDonald Line.   places it under Chinese control.



Conflicted Claims

  • Claims Johnson line is correct
  • Hence, Aksai Chin is part of J&K
  • Claims McDonald Line is correct
  • Hence, Aksai Chin is part of Xinjiang
  • During  war of 1962 , China took control over  Aksai Chin.



Note : Main reason for annexing Aksai Chin was to built a road connecting Xinjiang Region and Tibet to strengthen hold over Tibet . Only way to built a motorable road was to pass through Aksai Chin.







 Tibet Issue

  • Tibet’s political system was based on Buddhist faith. Dalai Lama was also the political chief of country.
  • Tibet’s  political connections with China varied from time to time.



  • 1914 Shimla Agreement  :  
        • Inner Tibet under China
        • Outer Tibet under Dalai Lama
        • Also demarcated a line between Tibet & North East India known as Macmahon Line
        • India was  given certain  rights in Tibet eg free entry in Tibet, right to station troops & maintain communication etc

Issue :  China disputed this line as imperial line drawn by Britishers .


  • Post  World War 2 , China refused to accept this line .
  • Nehru wanted good relations with China => Due to this reason, when Chinese Army entered Tibet and took it over, India recognised Tibet as part of China and   gave up Indian rights over Tibet  in 1954 (like Right to station army , control over post & telegraph etc)


  • 1959 : Lhasa Uprising => Dalai Lama took refuge in India => relations worsened leading to War of 1962



Latest Issues

  • China’s military build-up and infrastructure development in Tibet
  • Plans to divert or dam rivers (eg : Zangmu, Dagu etc)  that rise in Tibet and flow into India
  • China’s ‘Gold Rush’: China’s has started mineral mining  to extract precious metals, rare earths etc
  • Geo-engineering Experiments: Recently there are reports of China’s geoengineering experiments to “trigger natural disasters such as floods, droughts and tornadoes to weaken” an enemy in the event of a war.









Issue 2 : India China Economic Issues

China  has  become  India’s  largest  trading  partner  with  their  bilateral  trade  volume  increasing  from  less  than  $3 Billion  to  nearly  84 Billion $. But India has huge trade deficit with China of 51Billion $ which contributes to 25% trade deficit of India with world

Indo-China Relations
Trade Deficit between India and China



Why is  India  Important  to  China?

India  is  extremely  important  for  Chinese  growth  because  it  provides  China  with

  • Access to a billion  plus  market  for  its  products
  • Avenue  for  investment  of  surplus  Chinese  capital.
  • The  depression  in  the  western  market




  • Huge trade deficit of $ 51 Billion
  • Currency Manipulator =>   China is keeping Yuan undervalued
  • Indian Farm  sector  ,  agro-processing  industry  and Pharmaceutical Sector face Non-Tariff barriers from China
  • Dumping   cheap  Chinese  products =>  It is adversely  effecting Indian  MSME.
  • Security  implications
    • Excessive Chinese Mobiles => can be used for surveillance
    • Large Chinese investment in Power Sector (Chinese getting blueprint of Power Grids)
    • Excessive dependence (upto 80%) on China for Active Pharmaceutical Ingredients (API) (National Security Advisor and NITI Aayog suggestion => Implement Katoch Committee)
    • 5G security issue 


How to address

  • (Foreign Trade Policy 2015) Concentrate on  things like buddhist tourism & entertainment sector
  • Effectively implement Make in India
  • Increase trade competitiveness of Indian goods
  • Use Anti Dumping Duties
  • Promote Chinese investment in Indian manufacturing , SEZ ,NIMZ etc so that Chinese Companies make products  in India only
  • Implement Katoch Committee report (to address API issue)




Issue 3 :  String of Pearls and Indo-China Relations

String of Pearls

  • Theory given by Pentagon
  • Theory says that China is trying to increase its naval presence in Indian Ocean & counter India by surrounding it . It is developing string of ports around India for this purpose . These pearls include
Kyaukpyu  Myanmar
Chittagong Bangladesh
Hambantota Srilanka


Maldives Marao Atoll
Gwadar Pakistan
Djibouti First oversea military base
Indo-China Relations
String of Pearls


Impact on India

  • Can be used for imposing Embargo on India in case of war (90% Indian Trade pass through Indian Ocean)
  • Disturb balance of Power heavily in favour of China
  • Entry of extra territorial power in Indian Ocean


Steps taken by India

Srilanka Developing Kakesuthai & Triconmale port


Andaman & Nicobar Islands Can act as iron choke to string of pearls

  • Most of Chinese oil &  trade flows through Malacca => Andaman & Nicobar islands overlook Malacca Strait
  • Established  air naval station in Andaman & Nicobar called Baaz
Myanmar After opening up of nation, India has stepped up its engagement with Myanmar
Seychelles Trying to counter it with soft diplomacy
Chabahar port India is developing Chabahar port in Iran


  • Apart from that, India is trying to contain China too through following ways
        • Making alliances with Vietnam ( Vietnam too had issues with China in South China sea )
        • Mongolia is also strategic partner of India now
        • Making strategic ties with Japan
        • Malabar practice with US & Japan


  • Military Modernisation : Agni, Sukhoi, Nuclear submarines , Aircraft Carrier-Vikramaditya   are not meant for Pakistan but to fight against powerful nation like China


  • India building Roads in North Eastern border


Issue 4 : One Belt One Road  (OBOR) INITIATIVE
OBOR  consists  of  two (now – three)  elements.

Silk  Road  Economic  Belt  (SREB) Eurasian  land corridor from Pacific coast  to  Baltic Sea.
Maritime  Silk  Road  (MSR) Aims  to  develop  ports across  the  Indian  Ocean
New –

Digital Silk Road

      • Virtual Dimension of OBOR
      • It is about
        • strengthening internet infrastructure ,
        • lowering barriers to e-commerce,
        • developing common technology standards,
        • promoting cyber security
        • Promoting Chinese 5G technology


Indo-China Relations



Analysts  believe  that  the  OBOR  initiative  will  impact  4.4  billion  people  and   generate  $ 2.5  trillion  in  10  years.





This will involve

  • Building physical infrastructure (highways, railways, ports in coastal nations, fibre-optic lines)
  • Establish free trade zones (by coordinating customs, quality supervision, e-commerce etc)
  • Increasing cultural exchange etc.



Reasons  behind  OBOR  Initiative

Restructuring Economy
  • In 2008 => decrease in demand abroad => changed economy to Internal Consumption Led Economy => Now issue of overcapacity in infra sector  => want to address this by exporting infra projects 


  • Rising labour costs => Shifting production to underdeveloped western regions


Strategic Reasons
  • Decreasing dependence on Malacca Strait (80% of Chinese energy and exports pass through it) and addressing the Malacca Dilemma


Using Vast  Forex  Reserves China  has  forex  reserves  exceeding  $ 3 Trillion  =>  put large surplus reserves in building railways, highways, industrial parks along the Silk Road Economic Belt


Diversifying Trade Routes Excessive  dependence  on  a single  route  is  a  strategic vulnerability. 


Development of Under-developed areas China’s economic development and progress has been mostly concentrated in its eastern coastal provinces. OBOR Will  provide outlet to its  underdeveloped  southern  and western  provinces,  to markets and coasts. Development of regions like Xingxian will help in containing Uighur militancy as well.


Should India  Join Or Not ?

OBOR  has  specific  risks  and  opportunities

View 1: India should Join
India should join this initiative because of innumerable benefits

Road to Central Asia
  • enhance  India’s  connectivity  with   Central  Asia  through  China  
  • Connectivity  to  Russia  and  Eurasia  


Connectivity to North East
  • North Eastern Connectivity to South East and China (BCIM)
  • Push to  tourism in North East


Chinese experts say that India’s participation in the Silk Road project will ease the trade deficit.
  • Better  economic  relations  improves  political  relocations  and  mutual trust. 


  • It will help in balancing Pakistan  and  China  relations


  • India may also face some difficult choices in the road ahead, because as a co-founder of the Asian Infrastructure Investment Bank and as a member of the Shanghai Cooperation Organisation  it will be asked to support many of the projects under the B&RI.


  • Revival of ‘continentalism’ & old ties


  • With OBOR & other initiatives, China is making new world economic order. Not being part of it may isolate India from New Economic Order.
View 2: India shouldn’t join
  • Sovereignty Issues:  CPEC (part of OBOR) passes through  POK .


  • It  is ‘opaque’  in nature => may be nothing but an economic disguise for the ‘string of pearls’ .


  • It is detrimental to India’s geopolitical interests in the Indian Ocean Region . It challenges India’s stature of ‘security provider’ in the region  .


  • OBOR promotes  Chinese neo-colonialism => Loans are used as debt trap . Eg :
        • Seen  in Hambantota (SL)
        • Malaysia halted projects
        • Myanmar also wants the port built by China to scale down
        • Even in Pakistan , voices are raised against CPEC (termed it as next East India Company)


  • stronger  China  is  a  strategic  risk  for  India  given  the  fact  India  has  4078  km of  disputed  border  with  China  and  China  claims  a  large  portion  of  Indian territory  (nearly  80,000  sq  km).


  • Relations  with  USA  may  get  hampered. 



Indian Answer to OBOR

  • India recently proposed the ‘Cotton Route’ to strengthen economic ties between countries in the Indian Ocean rim.
  • It has also launched Project Mausam and Spice Route apparently in response to China’s Belt and Road initiative.
        • ‘Mausam’ – re-establishment of India’s ancient maritime routes in Indian Ocean.
        • Spice Route – revival of old links between 31 countries in Asia and Europe with India especially Kerala .
  • India & Japan come up with Asia Africa Growth Corridor (AAGC) to counter China’s OBOR.
  • India is developing large number of standalone projects
        • Chabahar Port project and the International North South Transportation Corridor
        • Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement (BBIN MVA)

=> Later these can be joined under one OBOR like project => China too used this strategy


Issue 5 : China – Pakistan Axis + CPEC

  • China & Pakistan describe their friendship as being ‘higher than mountains, deeper than oceans, sweeter than honey’.


Areas of Cooperation between China and Pakistan

  • NSG Membership: China opposed India’s admission into Nuclear Suppliers Group demanding India’s parity with Pakistan
  • Infrastructure investment: via China-Pakistan Economic Corridor (CPEC)
  • Terrorism: China has been shielding JeM chief, Massod Azhar from being listed as a ‘Global Terrorist’ by UN.
  • Military cooperation:  China’s military cooperation with Pakistan especially after CPEC involves
        • Bolstering the Pakistani navy =>  planned acquisition of eight submarines
        • Feb 2019 : China could sell an aircraft carrier to Pakistan



CPEC (China Pakistan Economic Corridor)

  • 3200 km  route  consisting of highways, railways and pipelines that will connect Gwadar port to Xinjiang in China.

    Indo-China Relations



Importance of CPEC for Pakistan

  • CPEC investment = $50 Billion
  • Over 7 lakh direct jobs in Pakistan.
  • Investment in Power Sector => country is desperately short of power.
  • Relieve USA pressure


Indian Concerns

  • Sovereignty Issues : CPEC passes through the disputed Pakistan Occupied Kashmir
  • Security Implications in IOR : Chinese access to Gwadar port=>  impacts Indian position as net security provider in Indian Ocean
  • Energy Security of India : Gwadar Port overseas Hormuz Strait and China can blockade Indian oil supplies in case of conflict .
  • Heavy Infra building in PoK will help in faster mobilisation of Pakistani troops in case of any future war


Potential Benefits which can accrue from CPEC to India

  • One of the arm of CPEC can be expanded to Indian states of Punjab and J&K without any major infrastructure costs .
  • India can get overland access to Afghanistan and Central Asia


Issue 6: South China Sea Issue and Indo-China Relations

China’s  Aggressive  claims  in  the  South  China  Sea

  • China  claims  vast  regions  of  South  China  Sea  ,  through  Nine  Dash  line  theory while
  • Other nations  like Vietnam, Philippines, Indonesia etc lay claim on them based on UNCLOS .  Eg :
        • Paracel Island (China vs Vietnam)
        • Spratly Island
        • Paratas Island etc

Indo-China Relations

(source-wikimedia commons)


Interest of China

    • Resources , oil being the most important (this region is oil rich region ). (Other = Fisheries)
    • Controlling South China Sea through which half of the world shipments pass
    • Proving her hegemony in the area & ousting US influence from neighbourhood 

Indian Stand

    • India has taken  a  neutral  stand  that  countries  involved  should  negotiate  and  resolve  it  peacefully  
    • India has also  emphasized  on  freedom  of  navigation  for  all  countries  in  South  China  Sea.



Importance of South China Sea and its littoral states for India

  • Around 55 % of India’s  trade  with  Asia  pacific  passes  through  South  China  Sea


  • With  presence in South China Sea ,India can  put  pressure  on  China  to  counterbalance  China  in  South  Asia & Indian Ocean Region (IOR)


  • To secure the energy supplies (we ship oil from Sakhalin to Mangalore through this region).


  • India’s ONGC Videsh Ltd has invested in areas which  China is claiming to be disputed (Oil Block 127&128 of Vietnam)


  • Vietnam is India’s strategic partner.


Issue 7: River Issues in Indo-China Relations

North South Water Diversion Plan

      • Problem with China = although her southern parts have water , Northern parts have acute water shortage.   Ideas are given since long to use Tibetan water resources to meet thirst of north =>this leads to North South Water Diversion plan 
      • Project worth $33 billion
      • China is constructing mega dam at Great Bend to divert water of  Tsangpo   



Dams on Brahmaputra

India-China Relations
Chinese Dams on Brahmaputra
      • Plan is to built  Four  Dams – Dagu, Jeixu, Zangmu & Jiacha . China has assured that these are run of river projects and will not divert water . 
      • These dams are part of North South Water Diversion Plan.




Problems which India can face

  • India and China don’t have any river water sharing agreement 
  • Impact of the projects on the sediment flow :  The sediments offer immense ecosystem services for the downstream economies of India’s N-E states, and Bangladesh.
  • Apprehension of China using water in events of conflict to create flooding downstreams .
  • Any significant diversion of water could impact hydroelectric projects downstream specially Lower Siang and Upper Siang   Project in Arunachal Pradesh
  • Chinese record on shared waters is  not good => virtually stopped Irtysh river  from going into Kazakhstan


Way forward : Sign Treaty on the Model of Indus Water Treaty with China



Recent developments to Normalise situation Indo-China Relations

India  and  China  are  on  the  verge  of  transforming  their  relationship.  In  pursuit,  they have  signed  several  agreements.


Some of  them are  :

      • Post Trumpism : India and China are collaborating on
        • saving globalization
        • defending the WTO
        • promoting a multipolar world
        • Climate Change


      • June 2018 : China  reduced tariffs on more than 8,500 goods. It has increased tariffs on US Soyabean by 25% providing Indian exporters to enter Chinese market


      • Wuhan Spirit : peaceful, stable and balanced relations between India and China will be a positive factor for stability amidst current global uncertainties


      • BRICS & AIIB : Both are members of  BRICS grouping & AIIB
      • SCO :  India got  full membership of Shanghai Cooperation Organization.


      • Climate Change : Both are part of Paris Agreement . Most important parties post US withdrawal


      • People to People Contact : people-to-people exchanges are thriving.
        • Practising yoga,
        • Bollywood movies







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