ECONOMIC INTERDEPENDENCE VS. STRATEGIC COMPETITION: RETHINKING INDIA–CHINA ENGAGEMENT IN 2025

Abstract

This research paper examines the complex and paradoxical relationship between India and China in 2025, characterized by deepening economic interdependence alongside intensifying strategic competition. Drawing upon bilateral trade data, academic scholarship, and policy analyses, this study explores how the world's two most populous nations navigate the tension between pragmatic economic cooperation and geopolitical rivalry. The paper analyzes multiple dimensions of engagement including border management, trade relations, technology competition, regional influence, and multilateral cooperation. The findings reveal that despite a record trade deficit of USD 99.2 billion and persistent border tensions, both nations have pursued cautious diplomatic normalization in 2024-2025, driven by external pressures including U.S. tariff policies and shifting global economic dynamics. This research contributes to understanding how major powers manage asymmetric interdependence while competing for regional primacy, and offers insights into the future trajectory of Asia's most consequential bilateral relationship.