India Warms to China Economically While Countering Beijing Militarily

India is cautiously rekindling its economic relationship with China even as it steps up military coordination with Beijing’s regional rivals. Prime Minister Narendra Modi will travel to China this month for a multilateral summit — his first visit since 2018 — amid reports that New Delhi is considering loosening investment curbs on Chinese companies. The move comes as U.S. President Donald Trump intensifies trade actions against India, disrupting the once-solid Washington-New Delhi strategic alignment.

Economic Rapprochement Amid Strategic Strain

Though relations between India and China have remained tense since the deadly 2020 border clashes, recent signals suggest an effort to stabilize economic ties. New Delhi’s potential easing of restrictions on Chinese investments — particularly in technology and infrastructure sectors — could mark a shift in its post-Galwan policy of containment.

Analysts say Trump’s hardline trade stance, including steep tariffs on Indian goods, has weakened trust in U.S. strategic support and pushed India to reexamine its diplomatic posture. "The Modi government is hedging — diversifying its options without capitulating," one policy expert told Foreign Policy.

Naval Exercises in the South China Sea

At the same time, India has sent a clear message of resistance to Chinese regional dominance. This week, the Indian Navy conducted its first-ever joint naval exercises with the Philippines in the South China Sea — waters where Beijing claims vast, contested control. The drills signal deeper defense cooperation between India and Southeast Asian states wary of Chinese assertiveness.

This dual-track approach — combining cautious economic re-engagement with firm military signaling — reflects India's attempt to balance pragmatism with deterrence in an evolving geopolitical environment.