India and China have always had a complicated relationship. They are neighbours, major economies and two of the most influential countries in Asia. They also trade with each other, compete in several industries and are both important members of BRICS.

At the same time, the relationship has gone through some difficult years. Border tensions, concerns about national security, restrictions on Chinese investments and technology, and the large trade gap between the two countries have made the relationship difficult for businesses as well as governments.

Things now appear to be moving in a somewhat different direction. Recent diplomatic engagement has created room for India and China to talk more openly again, while the latest BRICS Summit in New Delhi has brought the two countries together on a larger international platform.

But better communication between governments does not automatically mean that businesses will immediately return to doing business as usual. There is still a lot of caution on both sides.

The bigger question is whether India and China can improve their economic relationship while continuing to compete strategically.

A relationship that has slowly started changing

The India-China relationship changed significantly after the border tensions of 2020. India became more careful about Chinese investment, technology and companies operating in sensitive sectors.

For many businesses, this created uncertainty. Companies that depended on Chinese suppliers had to think about alternative sources. Businesses considering Chinese investment had to deal with greater regulatory scrutiny.

Over time, however, both countries have started taking steps to bring the relationship back to a more stable level. Diplomatic communication has increased, some restrictions have been eased and business travel has become easier.

This does not mean that all the problems have been solved. The border issue remains important and both countries continue to have strategic disagreements.

But there is a growing recognition that completely cutting economic ties is difficult.

Why the BRICS Summit matters

The BRICS Summit gives India and China a different environment in which to interact.

They are not meeting only as two neighbouring countries. They are also members of a larger group of emerging economies that wants to have a greater role in global trade, finance, technology and international decision-making.

For India, hosting the summit is an opportunity to demonstrate its growing influence. For China, BRICS provides an important platform for expanding economic and diplomatic relationships with developing countries.

There are areas where the interests of India and China overlap.

Both countries want stronger trade relationships with developing markets. Both want greater access to technology and investment. Both want their companies to become more competitive internationally.

That creates opportunities for cooperation, even when the two countries disagree on other matters.

Technology could become an important area

Artificial intelligence is one of the areas where this relationship could become particularly interesting.

China has invested heavily in AI, robotics, advanced manufacturing and other technologies. India also has a large technology workforce and a growing startup ecosystem.

Both countries understand that artificial intelligence is going to influence their economies and job markets.

China has been pushing for greater cooperation on AI among BRICS countries, including discussions around open-source AI and technology development.

For India, this could create opportunities to work with other countries on research, technology and innovation.

At the same time, India has to be careful about technology related to national security, sensitive data and critical infrastructure.

AI is no longer simply a business tool. It is becoming an important part of economic and strategic competition.

Trade remains the biggest challenge

One of the biggest problems in the India-China relationship is the trade imbalance.

India imports far more from China than it exports there. Indian companies buy Chinese electronics, machinery, components, chemicals, solar equipment and many other products.

For businesses, there is a practical reason for this.

China has developed a huge manufacturing ecosystem over several decades. Chinese suppliers can often produce components at large scale and at competitive prices.

Indian manufacturers benefit from those imports because lower input costs can help them keep their own products affordable.

But there is another side to the story.

When an industry becomes too dependent on one country for important components, any geopolitical or supply-chain problem can create difficulties.

That is why India wants to strengthen domestic manufacturing while also developing alternative suppliers.

Should India stop importing from China?

Completely stopping imports would be difficult and could create new problems.

Imagine an Indian company that uses a specialised component manufactured in China. If that component suddenly becomes unavailable, the company would have to find another supplier.

The alternative supplier might charge more. The quality might be different. The company may need to spend months testing the new product before using it in its manufacturing process.

That could increase costs and delay production.

A more practical approach is diversification.

India can continue trading with China while encouraging Indian companies to develop domestic suppliers and build relationships with businesses in other countries.

That way, companies have alternatives if one supply chain is disrupted.

India's manufacturing ambitions

This is where the China question connects directly with India's economic plans.

India wants to become a major manufacturing destination. The country wants more electronics, semiconductors, electric vehicles, batteries and industrial products to be manufactured locally.

India also wants global companies to use the country as part of their international supply chains.

China has a huge advantage because its manufacturing ecosystem has been developing for decades.

India will therefore need more than government incentives to compete.

It needs reliable infrastructure, efficient ports, good roads and railways, skilled workers, competitive suppliers and technology capable of supporting modern manufacturing.

If India can build these strengths, it will have a much stronger position when dealing with China and other major economies.

Chinese investment is another sensitive issue

Investment is perhaps even more complicated than trade.

Chinese companies have experience in manufacturing, electronics, batteries, industrial equipment and several other sectors where India wants to grow.

Investment from Chinese companies can bring money, manufacturing knowledge and access to established supply chains.

But investment in sensitive sectors can also raise national security concerns.

India therefore has to decide where foreign investment is beneficial and where additional restrictions are necessary.

This means the future may not be about completely accepting or completely rejecting Chinese investment.

It may be about choosing carefully.

Investment in one sector may be welcomed, while investment in another may receive much greater scrutiny.

There is still a trust problem

This may be the biggest challenge of all.

Businesses do not make major investments simply because political leaders have a good meeting.

A company investing hundreds of millions of dollars wants confidence that regulations will remain stable and that its investment will be protected.

It wants employees to be able to travel.

It wants predictable customs procedures.

It wants reliable access to suppliers.

It wants to know that a sudden political disagreement will not completely disrupt its operations.

That kind of confidence takes time to build.

The recent improvement in diplomatic relations is therefore only the beginning.

The real test will be whether businesses start feeling comfortable enough to make long-term decisions.

India and China are also competitors

It would be a mistake to look at the relationship only through the lens of cooperation.

India and China are also competing.

Both countries want to attract global manufacturing investment. Both want stronger technology industries. Both want to increase exports. Both want greater influence in developing economies.

This competition is likely to continue.

In some areas, Indian and Chinese companies may become partners.

In other areas, they may compete directly.

That is not necessarily a bad thing.

Competition can force companies to improve their products, reduce costs and invest more in technology.

For India, stronger competition could encourage Indian businesses to become more globally competitive.

What does this mean for startups?

The changing relationship could create opportunities for Indian startups.

As companies rethink their supply chains, there will be greater demand for technology that can help businesses manage suppliers, logistics, inventory and manufacturing.

A startup does not have to build a factory to benefit from this trend.

It could develop software that helps manufacturers identify alternative suppliers.

It could build an AI system that predicts supply-chain disruptions.

It could develop technology for factory automation.

It could create cybersecurity products for manufacturing companies.

It could build platforms that connect Indian manufacturers with global buyers.

Geopolitical changes often create problems, but they can also create new markets for entrepreneurs.

Jobs could be another major opportunity

India's manufacturing ambitions could create opportunities for a large number of professionals.

Modern factories need engineers, software developers, technicians, quality-control specialists, supply-chain managers, data professionals and automation experts.

The nature of manufacturing jobs is also changing.

Factories are becoming more automated. Robots are taking over repetitive tasks. AI is being used to monitor production and identify problems.

This means future manufacturing workers will need a combination of technical knowledge and practical skills.

For young professionals, this could create an interesting career opportunity.

Manufacturing is no longer only about working on an assembly line.

It increasingly involves software, data, robotics, engineering and artificial intelligence.

Could India learn from China?

There is a lot India can learn from China's manufacturing journey.

China spent decades developing industrial clusters where factories, suppliers, logistics companies and skilled workers are located close to one another.

This makes production faster and more efficient.

India has started developing similar manufacturing ecosystems, but there is still a long way to go.

Learning from China's experience does not mean copying China.

It means understanding what helped the country build such a powerful manufacturing base and adapting useful lessons to India's own circumstances.

India can also learn from China's mistakes.

The property crisis is one example of why economic growth needs to be balanced.

A country cannot depend indefinitely on one sector.

Indian consumers also matter

There is another part of this discussion that is often overlooked.

Indian consumers benefit from affordable products.

If Chinese components make Indian products cheaper, consumers indirectly benefit.

A complete restriction on imports could increase prices.

That could affect everything from electronics and household products to industrial equipment.

So the goal should not simply be reducing imports.

The goal should be creating an economy where Indian companies can eventually compete successfully while consumers continue to have access to affordable products.

That is a much more difficult challenge, but also a more sustainable one.

The future may be selective cooperation

India and China may never become close allies.

Their strategic interests are too different.

But they do not necessarily have to.

They can compete in some areas and cooperate in others.

They can disagree on border issues while continuing diplomatic communication.

They can compete in technology while cooperating on selected international initiatives.

They can compete for manufacturing investment while still trading with each other.

This type of relationship may be the most realistic one.

Instead of expecting India-China relations to become completely friendly or completely hostile, we may see a relationship built around selective cooperation and strategic competition.

What India needs to focus on

For India, the most important priority should be strengthening its own economy.

A stronger domestic manufacturing sector gives India more choices.

A stronger technology industry reduces dependence on foreign technology.

More competitive Indian companies can increase exports.

Better infrastructure can attract global investment.

A skilled workforce can support advanced industries.

All of these things increase India's bargaining power.

The stronger India becomes economically, the easier it becomes to work with China without becoming overly dependent on China.

The bigger picture

The India-China relationship is entering an interesting period.

There are signs of diplomatic improvement, and the BRICS platform is creating opportunities for the two countries to engage with each other on trade, technology and economic issues.

But the old problems have not disappeared.

The border remains sensitive. The trade deficit remains large. Trust between businesses is still limited. Technology remains an area where national security concerns are important.

The challenge for India is to find the right balance.

India should not isolate itself from one of the world's largest economies. At the same time, it should not become so dependent on China that it loses economic flexibility.

The answer may lie somewhere in the middle.

India can trade with China, attract investment where appropriate, cooperate on selected technologies and participate in global supply chains while continuing to build stronger domestic capabilities.

That approach would allow India to benefit from international trade without depending too heavily on any single country.

The coming years will show whether the current improvement in diplomatic relations can translate into deeper economic cooperation.

The real test will not be the speeches made at international summits.

It will be what happens afterward.

Will Indian and Chinese companies start investing more confidently in each other?

Will trade become more balanced?

Will technology cooperation increase?

Will Indian manufacturing become competitive enough to reduce dependence on imports?

Will more jobs be created as India builds its manufacturing and technology ecosystem?

These questions will matter much more than any single diplomatic meeting.

India and China may continue to compete for decades.

But competition does not have to mean complete separation.

The two countries can cooperate where their interests meet, compete where necessary and continue building their own economic strengths.

For India, perhaps the most important message is simple.

The goal should not be to become dependent on China or to completely avoid China.

The goal should be to become strong enough that India can choose when, where and how it wants to cooperate.

That is what economic strength ultimately provides.

What do you think? Should India encourage more economic cooperation with China to accelerate growth and technology development, or should India focus more strongly on reducing its dependence on Chinese products and investment? Share your thoughts on UrNextDoor.

Reference: Reuters, reporting on the India-China relationship and the BRICS Summit, September 2026.

Additional reference: Ministry of External Affairs, Government of India, official BRICS and India-China diplomatic updates.

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