India-China: Shadows of the Himalayas – A Fractured Bond in Flux

The India-China border conflict reflects an ongoing, complex power struggle, not just along an unmarked Himalayan frontier but across diplomacy, economy, technology, and media. Recent years, especially since the Galwan Valley clash, have reshaped perceptions on both sides, with each move—from infrastructure buildup to digital warfare and strategic alliances—signaling a new phase in one of the world’s most consequential bilateral relationships. This feature article draws on Indian and international sources to explore the themes central to contemporary India-China dynamics.

The Line of Actual Control (LAC): A Border Without a Map

The Line of Actual Control (LAC) is not a demarcated international border but a notional line separating Indian-controlled and Chinese-controlled territory. Spanning about 3,488 km from Ladakh in the west to Arunachal Pradesh in the east, the LAC has never been mutually agreed upon or documented, resulting in frequent, sometimes deadly, standoffs. The ambiguity became more acute after the 1962 Sino-Indian War, with China and India each holding different interpretations and maps, sometimes shifting positions to consolidate their claims. This cartographic amorphousness makes the LAC a live wire for conflict with immense scope for miscalculation.

Galwan Valley Clash: A Turning Point in India-China Relations

The brutal hand-to-hand clash in Galwan Valley in June 2020—leaving 20 Indian and at least 4 Chinese soldiers dead—was a watershed. It was the first bloody incident along the LAC since 1975, destroying decades of diplomatic progress. The episode deepened mistrust: China was blamed for altering ground positions; India responded with disengagement demands, military build-up, and a recalibration of economic ties. Diplomatic talks yielded disengagement at some friction points, but the broader relationship remains gridlocked, overshadowed by suspicion. The Galwan clash marked the end of an illusion of stable peace; today, normalized relations seem distant without full restoration of the pre-2020 status quo.

Infrastructure Race in the Himalayas: Who’s Building Faster?

The Himalayan border is now a theater of infrastructure competition. China has invested massively in its western borderlands, launching high-speed railway lines (e.g., Chengdu-Lhasa) and dual-use highways parallel to the LAC. These “economic” projects slash troop mobilization times and are complemented by the rapid establishment of border villages, which reinforce China’s territorial claims. India, long criticized for infrastructural lag, is catching up with new border roads and advanced outposts. Nonetheless, China’s scale and pace still outstrip India’s, raising alarms in New Delhi about the military implications of such connectivity, as logistical parity remains a distant benchmark.

Cyber Frontline: India-China Conflict Beyond the Battlefield

The battlefield is not just geographic—it’s digital. Since the Galwan clash, India has experienced a dramatic surge in cyber attacks attributed to Chinese-origin groups. Targets have included power grids, government databases, and strategic corporations. Beijing officially denies state involvement, but security experts warn these campaigns serve intelligence-gathering, intimidation, and sabotage purposes. For India, the cyber domain is now an intrinsic part of national security, leading to systemic efforts to ban Chinese apps and restrict equipment from Chinese telecom firms, such as Huawei, citing security threats. India’s digital vulnerability adds a new dimension to an already fraught relationship.

The Role of the Quad: Can Regional Alliances Deter Chinese Aggression?

The revitalized Quadrilateral Security Dialogue (Quad), involving India, the US, Japan, and Australia, has become a critical forum shaping the Indo-Pacific security environment. Though not a formal military alliance, the Quad engages in military exercises, technology sharing, and coordinated diplomacy—perceived in Beijing as an attempt at containment. For India, participation in the Quad is both an avenue for balancing Chinese influence and building resilience in its defense sector. While denying anti-China intent, India and its allies quietly regard the Quad as insurance against unilateral Chinese aggression, especially after Galwan.

Structural Drivers of the Trade Relationship

Manufacturing Ecosystems and Specialization

China’s successful build-up of deeply integrated manufacturing supply chains enables it to export price-competitive, high-quality goods ranging from mobile components to critical industrial machinery. Indian manufacturers, seeking to ride the wave of rapid expansion in sectors like electronics and electric vehicles, have little choice but to source inputs from established Chinese suppliers. The dependence is particularly acute in sectors such as semiconductors (with nearly 97% of silicon wafers imported from China), solar PV modules, and battery cells for EVs.

Conversely, India’s exports remain concentrated in primary or intermediate goods, which are vulnerable to demand swings and pricing power dictated by global (and sometimes Chinese) market trends. Both sides benefit from this arrangement: China secures raw materials and market access, while India accesses the machinery, know-how, and technology needed for its modernization programs, albeit at the cost of an ever-widening deficit.

Global Trade and Geopolitical Factors

The global context shapes the dynamics of India-China trade. When Western economies imposed tariffs or restricted Chinese exports, Indian markets became even more attractive for Chinese goods. For example, following US tariffs, China shifted surplus exports—including excess steel, electronics, and chemicals—to India and other markets, sometimes at lower than global market prices.

India’s attempt to capitalize on the so-called “China Plus One” strategy has met with mixed success. While some investments have flowed into Indian manufacturing, much greater traction has been seen in Southeast Asian competitors like Vietnam and Thailand, due to friendlier tax regimes, better trade agreements, and established links with Western multinational brands. Nonetheless, India’s growing infrastructure and policy tweaks position it as an attractive, if under-realized, alternative for global supply chains seeking to diversify risk.

Policy Shifts, Regulation, and Strategic Autonomy

India’s Regulatory Response

In response to the Galwan Valley clash and persistent trade imbalances, India undertook a series of assertive policy steps designed to reduce economic vulnerability and regain leverage over critical imports. Key actions included:

Banning over 200 Chinese mobile apps on security grounds, including TikTok and WeChat.

Imposing stricter FDI screening, especially for investments originating from land-bordering countries—a policy squarely aimed at Chinese companies.

Heightening anti-dumping investigations, particularly for Chinese products in electronics, chemicals, and steel.

Mandating local content for renewable energy projects to limit dependence on Chinese solar technology.

While these measures aimed to create a level playing field, they also introduced regulatory uncertainty, delays, and operational difficulties for Chinese firms operating in India. Some Chinese giants, like BYD, withdrew or postponed billion-dollar investments as a result. Although Indian policymakers have recently signaled some willingness to ease restrictions, particularly where technology transfer and capital flows align with Indian interests, the overall regulatory climate remains cautious.

The “China Plus One” and Make in India

India’s “China Plus One” and “Aatmanirbhar Bharat” (self-reliant India) campaigns attempt to foster a competitive, globally integrated industrial base. Incentive policies such as the Production Linked Incentive (PLI) schemes for electronics, solar, and EVs are already beginning to yield results in attracting supply chain relocations. However, a major barrier persists: India’s new manufacturing hubs are still heavily dependent on essential Chinese parts and machinery. For example, in 2025, Chinese restrictions on graphite exports severely disrupted India’s battery manufacturing industry.

Large Western brands with factories in India still rely on China for components, firmware, and machinery, limiting India’s ability to truly indigenize production. Building full-stack supply chain independence will take years of strategic investment in R&D, capital goods, and human resource development.

The Reality of Economic Dependence

Critical Vulnerabilities

India’s dependency on China is acutely felt in sectors classified as strategic or national security-related. As of 2025, more than 70% of India’s finished drug formulations depend on bulk drugs and APIs imported from China—a risk highlighted during the COVID-19 pandemic. The story is similar for electronics, where high-end chips, motherboards, and display units are overwhelmingly sourced from Chinese suppliers.

Solar energy—a top priority for India’s climate and development ambitions—is another area of vulnerability. Nearly 88% of India’s solar cells and 80% of modules are sourced or manufactured using Chinese inputs and capital equipment, despite government pushes for domestic capacity. Even minor Chinese export restrictions or price shocks ripple through Indian manufacturing and project timelines.

Table: India’s Heavy Dependence on Chinese Goods (2025)