China is the relationship that defines India’s strategic environment; Japan and the European Union are the relationships India has developed largely because of it.
This is chapter 49 of the PSIR Optional Notes, from the part on India and the World in the Paper II syllabus. The complete book is a free download.
UPSC syllabus
India and the Global Centres of Power: China, Japan, EU.
In one page
- The India–China relationship has four irritants: the unsettled boundary, the trade deficit, China’s Pakistan relationship, and competition for influence in South Asia and the Indian Ocean.
- The boundary dispute covers the western sector (Aksai Chin), the middle sector, and the eastern sector (Arunachal Pradesh, which China claims as South Tibet). There is no mutually agreed Line of Actual Control, which is why incidents recur.
- Agreements of 1993, 1996, 2005 and 2013 built a border management regime that held until 2020; the Galwan clash of June 2020 was the first fatal encounter since 1975 and changed the relationship’s character.
- Disengagement proceeded in phases and a broader understanding on patrolling arrangements was reached in October 2024, permitting a leader-level meeting; de-escalation and de-induction remain incomplete.
- The trade deficit with China is India’s largest with any country, and dependence is concentrated in exactly the sectors India seeks to build.
- Japan is India’s least contentious major partnership: infrastructure finance, the Special Strategic and Global Partnership, the Quad, and shared concern about China.
- The European Union is India’s largest trading partner as a bloc; the relationship has accelerated through the Trade and Technology Council and the connectivity agenda, and the 2025 paper links this to tariff pressure from elsewhere.
- The organising logic across all three: India seeks capital, technology and market access while avoiding dependence, and each partner values India primarily as a counterweight.
China
The boundary
The dispute is inherited. The western sector concerns Aksai Chin, some 38,000 square kilometres administered by China and claimed by India, through which the Xinjiang-Tibet highway runs. The eastern sector concerns the territory south of the McMahon Line, drawn at the Simla Convention of 1914, which China does not accept and which it claims as South Tibet. The middle sector is comparatively minor and the two sides have exchanged maps only for this sector.
The 1962 war followed the failure of talks, the forward policy, and Chinese action across both sectors. The Line of Actual Control that emerged has never been jointly delineated on maps or on the ground, which is the technical cause of recurring face-offs: each side patrols to its own perception of the line.
Management and rupture
- 1988, Rajiv Gandhi’s visit, agreeing to set the boundary aside and develop other areas of the relationship, with a Joint Working Group established.
- 1993, Agreement on the Maintenance of Peace and Tranquillity along the LAC.
- 1996, Agreement on Confidence Building Measures in the Military Field, including limits on exercises and a prohibition on firearms use near the line.
- 2003, appointment of Special Representatives for the boundary question, and Indian recognition of the Tibet Autonomous Region as part of China alongside Chinese recognition of Sikkim.
- 2005, Political Parameters and Guiding Principles, including the provision that settled populations would not be disturbed.
- 2013, Border Defence Cooperation Agreement.
- 2017, the Doklam standoff on the Bhutan trijunction, resolved after seventy-three days.
- 2020, multiple friction points in eastern Ladakh and the Galwan clash of 15 June, with fatalities on both sides, the first since 1975. India’s responses: troop deployment sustained through winter, restrictions on Chinese investment and applications, and the position that the relationship cannot be normal while the border is not.
- 2024, an understanding on patrolling arrangements announced in October, permitting resumption of some patrolling and a leader-level meeting on the margins of the BRICS summit. Disengagement at friction points is substantially complete; de-escalation, the reduction of forces, and de-induction are not.
The other irritants
Trade. China is among India’s largest sources of imports and the bilateral deficit is India’s largest with any partner. The dependence is concentrated in active pharmaceutical ingredients, electronics components, telecom equipment, solar modules and rare earths, which are precisely the sectors of India’s own industrial ambition. Policy responses: production-linked incentive schemes, restrictions on investment from countries sharing a land border, and procurement restrictions.
Pakistan. The China-Pakistan Economic Corridor passes through territory India claims; China has repeatedly placed technical holds on terrorist designations at the 1267 Committee; and Chinese equipment forms the bulk of Pakistan’s inventory. The 2025 paper’s reference to the aftermath of the Pahalgam attack belongs to Chapter 55, but the Chinese dimension of Pakistan’s capability is part of that analysis.
The neighbourhood and the Indian Ocean. Infrastructure lending and port development across South Asia and the littoral, treated in Chapters 56 and 57; the presence of the People’s Liberation Army Navy in the Indian Ocean; and the Belt and Road Initiative, which India has declined to join, citing sovereignty over the corridor’s route and concerns about debt sustainability and transparency.
Multilateral. Opposition to India’s NSG membership on the ground that India is not an NPT signatory; and resistance to Security Council expansion. Cooperation continues in BRICS, the SCO, the AIIB and the New Development Bank, and on climate differentiation, which is the standing example of convergence.
Assessment
The relationship is best described as competitive coexistence: managed rivalry with substantial economic interdependence and selective multilateral cooperation. India’s approach has three elements: internal balancing through capability and infrastructure development along the border; external balancing through the Quad and partnerships with the United States, Japan, Australia and France; and continued engagement to prevent escalation. The unresolved question is whether economic decoupling is feasible given the concentration of dependence.
Japan
The least contentious of India’s major relationships, and the one with the fewest structural irritants.
Trajectory. Cool after 1998, when Japan imposed sanctions following Pokhran II; recovery from 2000; Global Partnership 2001, Strategic and Global Partnership 2006, and Special Strategic and Global Partnership 2014. Annual summits; the 2+2 ministerial from 2019.
Content. Japan is a principal source of official development assistance to India, and its concessional finance underwrites the Mumbai-Ahmedabad high-speed rail project, dedicated freight corridors, metro systems and the North East Road Network Connectivity Improvement Project, which is notable because Japan is the only external partner India has invited to work in the North-East. The Asia-Africa Growth Corridor was proposed as an alternative development partnership model. Defence cooperation includes the Acquisition and Cross-Servicing Agreement (2020), the Malabar exercise, and the JIMEX and Dharma Guardian exercises. Both are members of the Quad and of the Supply Chain Resilience Initiative with Australia.
Limits. Trade volumes remain modest relative to potential and the comprehensive economic partnership agreement of 2011 has been under-utilised; Japanese investment, though significant, is concentrated; and Japan’s own constitutional and political constraints limit its security role.
The European Union
Structure. India engages the Union collectively and its member states bilaterally, and the bilateral relationships, particularly with France and Germany, have often been more productive. France is a distinct case: a permanent Security Council member that supported India after 1998, a major defence supplier through Rafale and the Scorpène programme, a partner in the Indian Ocean through the reciprocal logistics agreement, and a co-founder of the International Solar Alliance.
Trajectory. Strategic partnership from 2004; free trade negotiations launched in 2007 and suspended in 2013; relaunched in 2021 alongside the creation of a Connectivity Partnership; the Trade and Technology Council established in 2022, which the Union has only with the United States and India; and negotiations on trade, investment protection and geographical indications continuing.
Content. The Union is India’s largest trading partner taken as a bloc and a major source of investment and technology. Cooperation has extended to green hydrogen, semiconductors, digital governance and connectivity, with the India-Middle East-Europe Economic Corridor announced at the 2023 G20 as the flagship, though its implementation has been affected by conflict in West Asia.
Frictions. Agricultural and dairy market access; the Union’s Carbon Border Adjustment Mechanism, which India regards as a unilateral trade measure inconsistent with common but differentiated responsibilities; deforestation and due-diligence regulations; data adequacy; intellectual property and access to medicines; and European parliamentary resolutions on Indian domestic matters.
The 2025 question asks whether tariff threats elsewhere have pushed the two closer. The evidence for: both face the same external pressure, both seek supply-chain diversification away from China, and the negotiations have acquired urgency. The evidence against: the substantive differences on agriculture, carbon and data are unchanged by external pressure, and a partnership formed by a common irritant is less durable than one formed by common interest. The measured answer: external pressure has raised the political will to conclude, which is real, without resolving the issues that stalled the agreement in 2013.
Where answers lose marks
- Saying the LAC is demarcated. It has never been jointly delineated, which is the technical cause of recurrent standoffs.
- Treating the 2024 patrolling understanding as a settlement. Disengagement is not de-escalation, and the boundary question is untouched.
- Presenting India–China as purely adversarial. Trade interdependence, BRICS, the SCO, the AIIB and climate differentiation are all real.
- Omitting the sectoral concentration of the trade deficit. The dependence in APIs, electronics and solar is the analytically significant fact, not the aggregate number.
- Treating the EU as a single interlocutor. Bilateral relationships, especially with France, have delivered more than the collective one.
- Forgetting Japan’s uniqueness in the North-East. It is the only external partner invited to work there, which is a deliberate signal about China.
Asked before
- The tariff threats have pushed India and the European Union closer. Evaluate the India-EU partnership. (2025, Paper II, 15 marks)
- India-China border related issues have become a security issue for India. Discuss. (2024, Paper II, 10 marks)
Answer skeleton
India-China border related issues have become a security issue for India. Discuss. (10 marks, 150 words)
Frame. The boundary question has moved from a territorial dispute managed by agreement to a continuing security commitment, and 2020 is the hinge.
Why it recurs. No jointly delineated Line of Actual Control in three sectors; each side patrols to its own perception; differing claims in Aksai Chin in the west and south of the McMahon Line in the east.
The management regime and its failure. Agreements of 1993, 1996, 2005 and 2013 held for nearly three decades; Doklam 2017 was resolved; the Galwan clash of June 2020 produced the first fatalities since 1975 and ended the assumption that the border could be quarantined from the wider relationship.
Why it is a security issue and not only a diplomatic one. Sustained forward deployment and its cost; infrastructure competition along the line; the two-front problem created by the China-Pakistan relationship; and the extension of competition into the Indian Ocean and the neighbourhood.
India’s responses. Border infrastructure and the Vibrant Villages programme; force posture changes; investment screening from land-border countries and application restrictions; external balancing through the Quad and partnerships; and continued engagement to prevent escalation.
Where it stands. The October 2024 patrolling understanding permitted disengagement and a leader-level meeting; de-escalation and de-induction are incomplete and the boundary question is untouched.
Close. The lesson India has drawn, stated by its own government, is that the relationship cannot be normal while the border is not, which converts a boundary dispute into the organising constraint on the entire relationship.
Last-mile revision
- Sectors: western Aksai Chin, middle, eastern McMahon Line and Arunachal; LAC never jointly delineated.
- Agreements: 1988 visit and JWG; 1993 peace and tranquillity; 1996 CBMs; 2003 Special Representatives, Tibet and Sikkim; 2005 political parameters; 2013 BDCA; Doklam 2017; Galwan 15 June 2020; October 2024 patrolling understanding.
- Irritants: trade deficit concentrated in APIs, electronics, solar and rare earths; CPEC and 1267 technical holds; BRI declined; NSG and UNSC opposition.
- Cooperation: BRICS, SCO, AIIB, NDB, climate differentiation.
- Japan: sanctions 1998, Global Partnership 2001, Strategic and Global 2006, Special Strategic and Global 2014; 2+2 from 2019; ACSA 2020; high-speed rail, freight corridors, North-East connectivity; Asia-Africa Growth Corridor.
- EU: strategic partnership 2004; FTA launched 2007, suspended 2013, relaunched 2021; Connectivity Partnership 2021; Trade and Technology Council 2022; IMEC 2023. Frictions: agriculture, CBAM, deforestation rules, data adequacy, IP.
- France as the distinct bilateral: Rafale, Scorpène, Indian Ocean logistics, ISA co-founder.
Read the rest. This chapter is one of 58 in the complete PSIR Optional Notes, covering Paper I and Paper II in full — free to download.
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