India, historically espoused neutrality in its relations with great powers. The robust evidence of this can be found in Non-Aligned Movement (NAM) during the Cold War period, India was part of which. Despite that India was categorically a part of the non-aligned 120 countries, it had also envisaged its policy to engage USSR partially, upgrading its defense through Russian technology.

The past few years have witnessed a shift in Indo-China relations, promoting cooperation in many fields.

A decade before, Indian Former Premier Manmohan Singh had ruled out the “old theories of containment” addressed at the Chinese Communist Party’s School in 2013. Singh was lauded by the audience, and received a huge standing ovation in a speech on ‘India, China-A New Era’. Later on, despite aggressive election campaigns, Premier Modi generated an amicable relationship with Beijing. The premier hosted President Xi with Red Carpet at his house in Gujrat and visited to Xi’s house in China. In the meantime, the Indian Prime Minister also visited Washington in 2014. India remained a partner with the US in its global campaign to contain China, becoming part of all US-led alliances such as Quad, etc. Such a strategic competition led to a strategic rivalry at LAC, facing standoffs at Doklam in 2017 and Galwan Valley in 2020 successively.

However, India’s trade volume with China is cascading to a historic high in the post-Galwan era. The year 2021 witnessed a 44% increase in trade crossing the benchmark of US$ 100 billion for the first time in history. Meanwhile, the trade volume surged by 8.4 % reaching $136 billion, passing the 100 billion mark for the second consecutive year in 2022.

What are the reasons behind this Rapprochement? And what impetus became a driving force to bring the fighting rivals economically close to each other? These are the specific questions, the answers to which will be explored below.

New Delhi’s approach harkens back to its historic policy of strategic hedging, an instrumental third policy option for the middle powers during a contest between great powers.

Modi’s successive governments dealt with Beijing with multipronged engagements. For instance, on the one hand, they had joined JAI-Japan, America, and India summit, while on the other joined Russia-India-China (RIC) summit at the side-line of the G20 Osaka Summit in 2019.

India affixes with China vis-à-vis the US in different Institutional frameworks. Since the day, Premier Modi took the oath, he receives an extension of the US-India Defence Cooperation agreement for ten years, and signed many defense and security-related pacts and agreements including the launch of Defence Space Exchanges in 2022 through US Space Command and India’s Defence Space Agency, Logistics Exchange Memorandum of Agreement (LEMOA) in 2016, and Basic Exchange and Cooperation Agreement (BECA) in 2020.

Beijing is also skeptical of India’s centrality in Washington’s Indo-Pacific Strategy, preventing the Indo-US alliance in the region. Yun Su a director of the China Program at Stimson Center noted the Chinese wariness of India in the wake of its historic influence in South Asia. He argued the interdependence in seeking interests has categorically brought the two rivals close to each other as both, are willing to expand their influence while ‘bolstering their vitality’ through Belt and Road Initiative and Modi Doctrine respectively.

India ostensibly has been having two kinds of sentiments among its community. One is the business-oriented people forging enhanced business activity between the neighbors. While others are nationalism-oriented people igniting the boycott China campaign. The former dominates over the latter causing a quick hike in trade volume, after the Galwan clashes. Moreover, even though the people in India and the political parties had protested to boycott China, the sentiment was the least economic cantered. People still believed that the campaign was more of a nationalist perspective led by the people having the least economic interests or trade with China.

India and China have realized the regional solidity of their relationship and learned the positive engagement in the wake of strategic and economic competition which has helped them to improve their trade volume.

To sum up, everything that has been stated so far, one can say that Modi’s close ally and Indian Foreign Minister Jaishankar had given a prudent impetus to pursuing the third policy option of hedging which helped India to achieve its policy goals of defending its status in the US lead alliances and influence the Chinese power in the Indian Ocean Region. Meanwhile, the cooperation has helped India to pull off major diplomatic milestones such as hosting key summits of SCO and G-20.

Moreover, the Chinese emergence as a regional partner to India has helped enhance its influence globally, wielding its economic ambitions through BRI and presenting itself as a global peacemaker which helped as a driving force in its latest mediation in signing a détente between Iran and KSA. On the other, New Delhi’s improvement of ties with Beijing is a death to the US balancing strategy in the Indian Ocean Region.