India’s Enduring Mistake Is Losing the Big Picture for Small Gains

Since mid-2024, tentative signs of a warming in China-India relations have been upended again by external shocks, including Trump’s chaotic “reciprocal tariffs” launched in early April 2025 and a terrorist attack in Indian-controlled Kashmir. These events have plunged the bilateral relationship into a state of uncertainty.

Amid this delicate thawing, India’s Commerce and Industry Minister, Piyush Goyal, declared on April 11 that allowing China into the WTO was the root cause of today’s global trade crisis, while praising Trump’s tariffs as necessary and beneficial to the world, presenting a golden opportunity for India.

The subtext of Goyal’s remarks carries far greater weight than their surface meaning. For many in China, his words crystallize a bitter realization: India decision-makers only entertain improving ties with Beijing during fleeting moments of vulnerability, such as after the floundering U.S. visit in February 2025. The moment Trump decides to go after China, India reflexively aligns with Washington’s hawkish stance.

India’s approach to China, prone to sharp swings with shifting external winds, lays bare the fragility of China-India relations. This vulnerability stems from two sources. Externally, India’s posture hinges on the state of U.S.-China relations: only when Washington and Beijing are on stable footing does New Delhi pursue warmer ties with China. Internally, domestic pressures can swiftly derail progress. Any spark that ignites public resentment toward China—whether Beijing is implicated or not—can sabotage bilateral relations.

More fundamentally, India’s ambivalence signals a failure to fully comprehend why amicable China-India relations benefit not only China but, more critically, India itself—especially its aspirations for development and global ascendancy.

China’s Lesson: Always Prioritize Development When Possible

Prime Minister Narendra Modi has been dubbed “India’s Deng Xiaoping,” but equating the two based solely on Modi’s pro-business reforms overlooks the depth of Deng’s legacy. Many in India fail to appreciate that Deng, the mastermind of China’s reform and opening-up, not only drove domestic transformation but also made a prescient assessment of the global geopolitical landscape: the defining themes of the era were peace and development, not revolution and war.

This insight shaped nearly every facet of China’s foreign policy during its reform era. With global conflict unlikely in the near term, China seized the moment to prioritize economic construction, leveraging and reinforcing international peace to achieve socialist modernization. Guided by this vision, China enacted sweeping strategic shifts in the early 1980s, crafting long-term modernization plans, establishing coastal special economic zones, and embracing an open-door policy. Diplomacy and military priorities were realigned to serve economic goals, with meticulous efforts to avoid unnecessary external pressures.

Deng Xiaoping at 1979 Texas Rodeo Meeting

By contrast, while India’s reforms in the early 1990s are often likened to China’s, Indian leaders have rarely articulated a clear, strategic reading of the global environment, instead reacting to tactical disturbances. This has left India far more susceptible to distraction than China. Even under intense external pressure—such as the Soviet bloc’s collapse, Western sanctions in the early 1990s, or crises like the 1996 Taiwan Strait tensions, the 1999 NATO bombing of China’s Belgrade embassy, and the 2001 South China Sea collision—China held fast to its strategic course. Its unwavering commitment to openness laid the groundwork for WTO accession in 2001 and a decade of ensuing breakneck economic growth.

Indian policymakers and citizens often puzzle over China’s obsessions with “the dragon elephant tango” or its efforts to separate thorny border disputes from other bilateral issues. Some even view these overtures as deceptive ploys. Yet a cursory understanding of China’s strategic culture reveals these as the most sincere, pragmatic proposals drawn from Beijing’s own cherished experience. After all, even at the height of tensions with the West, China still extended generous terms to attract global capital, fueling its sustained rise. Regrettably, few in India grasp Beijing’s mind.

In its pursuit of development, China has long focused on dealing with domestic economic, social, and political challenges while keeping a low diplomatic profile. For a large nation in a critical growth phase, a primary diplomatic aim is to create a stable external environment for economic progress, steering clear of unnecessary geopolitical entanglements. For countries like India and China, with vast populations, chasing fleeting “great power status” or “global recognition” is beside the point. By focusing on development with disciplined strategic resolve, such nations are destined to claim a prominent global role.

Don’t Bet Against China’s Resilience

During the Cold War, China transcended ideological rigidity, broke free from path dependence, and made bold strategic pivots, ultimately emerging as a victor alongside the US. India’s performance, by contrast, was far less impressive. While professing non-alignment, India effectively became a Soviet ally, aligning with the losing side. China’s Cold War lesson is clear: nations must shed biases and make tough, pragmatic choices rooted in national interest.

Amid Trump’s “reciprocal tariffs,” many in India believe a beleaguered China will come begging for cooperation, offering New Delhi a chance to siphon off Chinese capital and technology. By hitching its wagon to Trump, they argue, India can outmaneuver China and emerge as the biggest winner of this trade war.

This explains why, after Trump’s latest trade offensive, Goyal and many other Modi cabinet members have ramped up anti-China rhetoric. As commentator Pranab Dhal Samanta observed,“any chaos is an opportunity for new power center to emerge”，Indian leaders may hope to exploit “Trump’s chaos” to undermine a China they perceive as teetering.

This rosy outlook betrays a failure to escape ideological blind spots. India’s antipathy toward China fuels a desire to see it falter, mistaking wishful thinking for reality. Such views overestimate America’s current strength, underestimate China’s resilience and the counterbalancing power of other economies, misjudging the trajectory of these forces.

Yet a clear-eyed assessment of U.S.-China dynamics suggests China holds the stronger hand, despite America’s enduring power. In manufacturing and emerging industries, China’s lead is growing. By 2030, UN data projects China’s manufacturing output will be twice that of the U.S., its power generation four times greater, auto production three times higher, steel output 13 times larger, cement production 20 times greater, and shipbuilding capacity 200 times bigger. China accounts for half of global chemical production, 67% of electric vehicles, 70% of batteries, 80% of consumer drones, 90% of solar panels, and over 90% of refined rare earths. In 2023, half of all industrial robots installed globally were in China—seven times the U.S. figure—positioning it to drive the next industrial revolution.

In 2023, China’s industrial robot density surpassed that of Germany and Japan, rising to third place globally.

Betting on a U.S. victory is akin to India’s Cold War alignment with the Soviet Union—a lazy, bias-driven choice that prioritizes emotional satisfaction over real national interest. The diplomatic missteps that would follow such a strategy could have severe consequences. India need not bet on China’s success, but it must avoid betting on its failure.

India’s Rise: Partner with China, Reform Within

Barring cataclysmic events like nuclear war or sci-fi robot uprisings, India’s rise is perhaps the most foreseeable development poised to reshape the global order. The reason is straightforward: India’s sheer scale. As the world’s most populous nation—and the only country besides China with over 1 billion people—India is set to hold that title for the foreseeable future. Even with moderate economic growth, India is all but certain to rank among the world’s top three economies, as its population dwarfs that of Japan or Germany by a factor of ten. India doesn’t need an exceptionally high per capita GDP to overtake these nations in total output.

The real question is not whether India’s rise will reshape the global order—it almost certainly will—but whether, when, and how India will rise. Potential is not the same as strength, and unrealized potential is meaningless. India’s ascent is a work in progress, not a fait accompli. The path to realizing it lies in industrialization and modernization—the only viable route for a nation of India’s scale.

In the early 1990s, China and India had comparable per capita GDPs. By 2024, China’s was over five times India’s, underscoring a stark divergence. Acknowledging this gap is not shameful but the fastest way to narrow it and fulfill India’s ambitions. Instead, clinging to an inflated sense of greatness, however, risks unnecessary conflicts and costs, pushing India further from true global stature. Overblown self-perceptions could burden India with pressures it need not face, whether vis-à-vis the West or China.

Over the past three decades, India has fallen further behind China, and this gap is likely to widen in the near future. Meanwhile, India’s heavy reliance on the U.S.—coupled with America’s relative decline—could exacerbate its challenges. To catch up, India’s best path is to deepen cooperation with China, pursue bolder domestic reforms, and avoid being conscripted into Washington’s anti-China crusade. China’s experience shows that for super-populous economies, industrialization through manufacturing is the only way forward. And on this journey, no country is better positioned to assist India than China.

Yet India has been struggling with the most basic question: whether to cooperate with China? Statements from figures like Goyal reveal a prevailing narrative of betting against China’s success. Economic logic suggests closer China-India ties would maximize India’s opportunities, but domestic political currents stifle this possibility. Since 2020, India’s restrictive policy regime toward Chinese firms and personnels has meant it misses out on the most Chinese industries relocating under U.S. pressure.

If India fails to seize this moment, it may never get another chance. With restrictive policies against anything Chinese and stalled reforms, India has been a terrifying destination for Chinese business community—after all, securing foreign direct investment approvals, visas, or compliance with local regulations is arduous, and repatriating profits carries significant risks.

As India sidelines Chinese investment, a new supply chain network is rapidly emerging, stretching from Southeast Asia to South Asia, the Middle East and even Africa. Bangladesh handles apparel, Vietnam consumer electronics, Indonesia batteries and refined products, and Malaysia autos, chips, and electronics manufacturing services and etc. Facing new U.S. tariffs, China and Vietnam even signed a first-of-its-kind memorandum to strengthen supply chain cooperation. Meanwhile, Bangladesh and Sri Lanka are also eyeing membership in the Regional Comprehensive Economic Partnership (RCEP).

If India does not act swiftly to forge more meaningful links with China, it risks fierce competition in its economic niche, severely constraining its development prospects. To reverse its strategic disadvantage, India must think with clear mind and act now.

From India’s own interests, fostering ties with China should not be a grudging fallback but a deliberate, strategic choice grounded in a broader, more visionary perspective.

Editor: Zhongxiaowen