Table of Contents
Today’s brief reads three articles. Sujan Chinoy in Firstpost argues that India and China are working together again out of necessity, not out of trust. Maiwand Safi at the Observer Research Foundation shows how the war between the United States and Iran has put the Chabahar port beyond Indian and Afghan control. Arvind Gupta at the Vivekananda International Foundation reads the neighbourhood as a problem of size, mistrust and Chinese institution building.
India and China are working together again out of necessity, not out of trust.
Sujan Chinoy heads the Manohar Parrikar Institute for Defence Studies and Analyses. He led the Indian side at the Track-2 dialogue held in Chengdu in 2025. He writes that relations fell to their lowest point in decades after the Galwan clash of June 2020. Exchanges froze, rules on Chinese investment were tightened and Chinese apps were banned. Trade still went up. His case is that the two states are edging back to a measured cooperation because neither can afford permanent hostility.
The record
- The Galwan clash of June 2020 was the most serious military confrontation between India and China since the war of 1962.
- Trade rose after 2020 because the two economies are tied together through supply chains. India’s trade deficit with China crossed 100 billion dollars in 2025.
- After Galwan, China was shut out of telecommunications, power and critical infrastructure in India. Portfolio funds were watched more closely to establish who finally owned them.
- Modi and Xi met at the BRICS summit in Kazan in 2024. They met again at the SCO summit in Tianjin in August 2025.
- Three steps in 2025 built confidence. The Kailash Mansarovar pilgrimage resumed in the middle of the year, visa rules were eased on both sides, and direct flights resumed in October.
- 2025 was the 75th anniversary of diplomatic relations. It was marked by a Track-2 dialogue in Chengdu, which Chinoy led on the Indian side. He contrasts it with the troubled 70th anniversary of 2020.
- In early 2026 India revised Press Note 3 of April 2020, which had blocked automatic investment from countries that share a land border with India. Global funds with under 10 per cent non-controlling Chinese ownership may now invest through the automatic route.
- Approvals for some inputs from China are now fast tracked within 60 days. The list covers polysilicon and ingot wafers, advanced battery components, electronic capital goods, rare earth processing and permanent magnets.
- The irritants Chinoy names stay live. They are the boundary, China’s chokehold over critical supply chains, lop-sided trade, and Beijing’s stance on Pakistan-linked terrorism. India was also wary of China’s cooperation with Pakistan during Operation Sindoor.
- India’s national vision is Viksit Bharat by 2047. China’s is the China Dream. Chinoy reads both as echoes of Deng Xiaoping’s remark that Asia’s future depends on the development of the two countries at the same time.
The argument
This is a thaw, not a settlement. The phrase to carry into the answer is cooperation despite rivalry. The trade figure proves the point. Politics froze after Galwan and trade still climbed. Economic ties did not buy political calm, and the break in political ties did not cut the trade.
The article also hands you the Indian list of complaints in one line, and a dated order of the steps back to normal. Use it on India and China, on the boundary question, and on any question that asks whether this century belongs to Asia.
“Neither India nor China can afford permanent hostility, however serious and numerous their differences.”
Sujan Chinoy
“Beijing’s tendency to view India merely as a destination for surplus Chinese goods and to frame the relationship through the lens of US-China rivalry is unhelpful.”
Sujan Chinoy
A port can be perfectly placed on the map and still have its future settled by another country's war.
Maiwand Safi writes on Chabahar for the Observer Research Foundation. Afghanistan, India and Iran launched the project in 2016 as a corridor that leaves Pakistan out of the route. Safi argues that what the port can now do for Kabul and New Delhi rests on decisions taken elsewhere. American strikes on Iran, changing sanctions and the closing of the Strait of Hormuz have made the commercial case harder to argue. He calls India’s response a wait and watch approach.
The record
- The Chabahar port project was launched in 2016 by Afghanistan, India and Iran. It was planned as a corridor linking South Asia with Central Asia while bypassing Pakistan. India ties it to the International North South Transport Corridor.
- Chabahar lies to the west of Iran’s border with Pakistan. Gwadar port lies to the east of the same border. Safi reads Chabahar as a counterbalance to China’s Belt and Road Initiative, and in particular to the China-Pakistan Economic Corridor.
- Afghanistan is landlocked and has long depended on Pakistani ports. Afghan relations with Pakistan worsened in 2025, with border closures and disruption at customs crossings.
- Afghan imports through Chabahar have risen above 2.5 billion dollars. Afghan exports through the corridor were worth 127 million dollars in 2024.
- The Taliban announced plans to put about 35 million dollars into the port and asked for more Indian investment. Foreign Minister Amir Khan Muttaqi discussed the expansion of trade at Chabahar with India’s Joint Secretary J.P. Singh in March 2024.
- India has invested nearly 3 billion dollars in the reconstruction of Afghanistan since 2001.
- The United States announced a tariff of 25 per cent in January 2026 on countries doing trade and business with Iran.
- Chabahar received a sanctions waiver in 2018. India had to secure a separate six month waiver in October 2025. That waiver expired in April 2026.
- India reduced its allocation for the development of Chabahar to zero in the latest fiscal year. Safi calls this a sign of caution rather than withdrawal.
- Afghanistan’s rail network is still small and its main roads are not yet built. That raises costs and slows the movement of goods through the port.
The argument
Chabahar is the set example for connectivity and for India’s Iran policy. Safi gives you the limit of that policy. The value of a port built through a sanctioned country moves with the law of a third state, and the waiver dates show how far American rules reach into an Indian project in Iran.
There is a second use. Kabul has no recognition, so it treats connectivity as diplomacy. The port takes Afghan trade out of Pakistani hands and keeps Kabul in the business of the region. That is a clean illustration for a question on the Taliban government and on India’s Afghanistan policy.
“The war between the US and Iran has again exposed how much of Chabahar’s future lies outside Afghan and Indian hands”
Maiwand Safi
The neighbours mistrust India because of the size gap, and China is building an alternative to SAARC.
Arvind Gupta directs the Vivekananda International Foundation. He scans the neighbourhood country by country, with Nepal, Sri Lanka, Bhutan and the Maldives in front. India borders every one of them and they do not border each other. His argument is that this gap in size is a structural fact of the relationship. It gives rise to mistrust whatever India does. Above it sits China, which now runs forums in South Asia that keep India out.
The record
- Neighbourhood First was launched in 2014 on a basis of non-reciprocity. Gupta calls it an echo of the Gujral doctrine of non-reciprocity towards neighbours and non-interference in their affairs.
- The Ministry of External Affairs told Parliament on 13 December 2024 that India engages the neighbours on a consultative, non-reciprocal and outcome-oriented basis. The four principles it named are Samman or respect, Samvad or dialogue, Shanti or peace, and Samriddhi or prosperity.
- The 6th China-South Asia Cooperation Forum of 19 June 2025 carried the South Asia-China Alliance. Gupta reads it as a body parallel to SAARC without India. Pakistan supports it and it is built around the Belt and Road Initiative and the China-Pakistan Economic Corridor.
- China has acquired ports and infrastructure in Pakistan, Bangladesh, Nepal, Myanmar and Sri Lanka. Bhutan is so far the exception.
- In early 2026 the Maldives drew 30 billion rupees, about 360 million dollars, from the currency swap facility India provides. It paid for food subsidies and essential imports after money from tourism fell.
- India gave Sri Lanka over 4 billion dollars of assistance during its economic crisis. It also led the creditor countries in getting Sri Lanka favourable debt restructuring.
- Trade between India and Nepal has reached 8 billion dollars. The border stays open and Nepalese citizens may work in India without a visa.
- Nepal rests its claim to Limpiyadhura, Lipulek and Kalapani on the Sugauli Treaty of 1816. India has said that such enlargement of territorial claims will not be accepted.
- The treaty of 1949 with Bhutan, under which India guided Bhutan in external relations, was revised in 2007. India and China faced a standoff of 71 days at Doklam in 2017. The 15th meeting of the Bhutan-China group of experts on boundaries was held in Beijing in April 2026.
- SAARC is nearly dysfunctional and BIMSTEC has not realised its potential. Gupta calls economic integration in the region distant and possibly unachievable.
The argument
Asymmetry breeds mistrust, so Indian help is read as interference. Learn the pattern that follows from it. Each capital turns towards Beijing when it feels the limits of Delhi, and turns back when a crisis comes and India is the first responder.
Note what Gupta wants Neighbourhood First 2.0 to carry. Health, education, water, climate, migration, crime and cyber security cut across borders, and implementation matters more than announcements. State to state ties are no longer enough on their own. That gives you both the criticism of SAARC and the alternative to put in its place.
“the asymmetry in size between India and its neighbours is a structural factor in bilateral relations, giving rise to mistrust”
Arvind Gupta
“India has always been seen as interfering, irrespective of what it does and does not do with respect to Nepal.”
Arvind Gupta
Where this belongs in your syllabus
Open the note and read the full topic.
The questions this feeds
Questions from earlier years that today’s reading speaks to. Where the answer is written, the red link opens it. The full set is in the PYQ Vault.
- PSIR Paper II · 2025 · 15mDiscuss the potential role India can play in initiating a possible phase of trilateral economic engagement among India, China and Nepal.Answer
- PSIR Paper II · 2024Does the idea of the 21st century as 'Asian century' continue to remain feasible given the growing friction between India and China?
- PSIR Paper II · 2024 · 20mDiscuss the future of SAARC in the light of India's increased focus on other regional groupings like ASEAN and BIMSTEC.Answer
- PSIR Paper II · 2024 · 10mBhutan has historically been an ally of India, but the China-Bhutan border related issues have become a security issue for India. Discuss.Answer
- PSIR Paper II · 2023 · 15mWhat are the challenges and limitations in India-Iran relations?Answer
- PSIR Paper II · 2023 · 15mDiscuss the significance of 'West Asia Quad' in the light of India's 'Look West' policy.Answer