How Modi 3.0 could steer India-China relations

India’s latest election marked a resurgence of democracy, as voters pushed back against concentrated power and the ethno-nationalist sentiments in the ruling Bharatiya Janata Party. This shift may force Prime Minister Narendra Modi to reconsider his hardline policies and opt for more cautious approaches. Implemented wisely, such changes could bolster India’s international standing.

But a rising India under Modi has also seen its relationship with neighbouring China enter a complex phase. Both vast and competitive economies, they are facing hurdles in building their friendship and, increasingly, security concerns are outweighing economic considerations.

India’s deepening alliance with the United States, characterised by President Joe Biden as “the defining partnership of the 21st century”, reflects their shared interests in managing China’s influence despite the historical mistrust.

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Biden, Modi hail new era of US-India ties and tout deals

This also positions India with Europe’s aspirations for global influence, potentially reshaping New Delhi’s multi-alignment strategy.

Amid tensions, India’s political landscape is changing. Coalition governance and a stronger opposition may prompt more pragmatic policies but business demands also drive this shift.

Sino-Indian tensions are estimated to have cost India’s electronics manufacturers US$15 billion in production losses, with 100,000 job losses over the past four years. They are calling for more flexible trade policies and visa relaxations for skilled Chinese workers.

This evolving setting could steer the Sino-Indian relationship in two directions: continued rivalry and strategic competition amid closer India-West coalitions, or increased collaboration and mutual understanding