Experts say the India-China thaw is motivated by economic and security objectives and is a “good restart.”

India and China have agreed to ease border restrictions with resumed patrols, a move experts say is driven as much by economic imperatives as by security concerns, with both nations looking to bolster trade ties.

The Indian government announced on Monday that the two nations would restart patrols in the contested region, where tensions have simmered since the Galwan Valley clash in 2020.

China’s Ministry of Foreign Affairs spokesman Lin Jian confirmed the development, stating that Beijing would work with New Delhi to implement the agreement.

Experts view the move as a positive step towards stabilising bilateral relations after years of fraught tensions.

Saheli Chattaraj, assistant professor of Chinese studies at Somaiya Vidyavihar University, said India remained cautiously optimistic about Beijing’s intentions but that stability at the border served both nations’ interests.

“Our differences at the border still continue, with China’s stand being that differences left from history need to be resolved through mutual consultation,” Chattaraj said.

She noted that breaking the diplomatic deadlock implied both countries were motivated to improve relations through peaceful and political means.

“There is impetus for improving the relation by bringing in positive impact and by narrowing down differences,” she said.

The disengagement announcement followed a bilateral meeting between India’s Prime Minister Narendra Modi and China’s President Xi Jinping on the sidelines of the Brics summit in Kazan, Russia – the first such in-person meeting between the two leaders since 2019.

Both leaders stressed the importance of handling their border disputes and agreed that India and China could have a “peaceful and stable” relationship by displaying maturity and mutual respect.

Atul Kumar, a fellow of the Delhi-based Observer Research Foundation’s strategic studies programme, said building trust would take time.

“As long as mutual respect and sensitivity to each other’s national interests and red lines can be reflected in this bilateral relationship, the situation will remain stable,” he said. “It’s indubitably a good restart for the bilateral relationship, and both countries are cautiously optimistic at present.”

Kumar said Brics had helped build momentum for China and India to discuss and seek resolution to their bilateral problems under its framework.

“President Xi Jinping gives enormous importance to this alternative global platform, and the fact that he decided to use it to seek a resolution to the current stalemate also speaks volumes about his consistent effort to promote Brics in the changing geopolitical environment,” he said.

Bilateral ties nosedived after the deadly 2020 clash in the Galwan Valley, which left 20 Indian soldiers and at least four Chinese troops dead. The two countries also experienced tensions during the 2017 Doklam stand-off and confrontations along the border in Sikkim and Arunachal Pradesh.

Rakesh Sharma, a defence analyst and distinguished fellow at the Delhi-based Centre for Land Warfare Studies, noted that while the latest attempts to resolve the prolonged impasse in eastern Ladakh were encouraging, rebuilding trust would require sustained effort.

“Previous confidence-building measures [CBMs] established between 1993 and 2013 have lost their efficacy. Newer CBMs will take quite some time to establish. So, it will be essential to remain cautious,” he said.

M.S. Prathibha, an associate fellow at the Institute for Defence Studies and Analyses, told This Week in Asia that China had been very diligent in resuming economic ties with India given its security and trade tensions with the West.

“The agreement has given cautious optimism in India-China relations. India wanted the border situation to de-escalate and resolve issues of patrolling at all friction points before resuming any economic ties,” Prathiba said, adding that India also hoped China could abide by the bilateral agreements signed between the two countries.

Analysts say economic interests between India and China have driven both countries to address and resolve their border issues.

“India and China are interdependent on each other. India doesn’t want to entirely rely on the West and is finding it hard in negotiating with Korea and Japan. Meanwhile, China needs access to the Indian market, especially given its strained relations with the West,” said an economic analyst working in a think tank organisation, who requested anonymity.

China is seen as easier to work with from Delhi’s perspective, compared to countries such as Japan and South Korea which tend to treat India as a junior partner, analysts say. Commerce and Industry Minister Piyush Goyal said on July 30 that India was pushing to speed up negotiations to review the free-trade agreements implemented with Japan, South Korea and Asean.

“There is also pressure from Indian business houses on the government to improve trade relations ties with China, given the economic opportunities and benefits such ties could bring,” the unnamed analyst said.

“Both countries have larger economic interests and they can’t afford to be bereft of economic benefits because of their border disputes.”

In the financial year that ended in March 2024, India’s exports to China stood at US$16.65 billion, while imports totalled US$101.75 billion, resulting in a trade deficit exceeding US$85 billion, according to data from the economic think tank Global Trade Research Initiative.

India’s annual Economic Survey report, issued in July, emphasised the importance of attracting foreign direct investment from China to enhance India’s exports to the United States and other Western countries, thereby addressing Delhi’s escalating trade deficit with Beijing.

Arun Kumar, a retired professor of economics at Jawaharlal Nehru University, offered a different view, saying that the latest agreement concerned the geopolitics of the region.

“The West wants India to be [the] counterpoint to China [in Asia], that is why the US has been building a strategic relationship with India,” Kumar said.

“So, it is in China’s interest to see that India doesn’t go too much to the West and remains neutral between the two blocs, that is why China has agreed to tone down on the border issue.”