Dr. S. Jaishankar’s first visit to China since the 2020 Galwan clash, alongside his participation in the SCO summit, marks a pivotal step toward easing border tensions and strengthening diplomatic ties amid rising U.S. economic pressures. This report analyzes the strategic balancing act between India and China as they manage their complex relationship and external challenges.
New Delhi (ABC Live): India’s External Affairs Minister Dr. S. Jaishankar embarked on a critical diplomatic mission to China in July 2025, attending the Shanghai Cooperation Organisation (SCO) summit — his first visit since the 2020 Galwan Valley clashes. This visit occurred amid escalating global economic tensions, including U.S. tariff threats targeting countries moving away from the U.S. dollar in international trade.
This report analyses India’s strategic approach to engaging China, contrasts China’s assertive diplomatic strategies, examines the persistent trust deficit and its implications, assesses the impact of Jaishankar’s visit, including his participation in the SCO summit, and explores how India and China can balance U.S. pressure aimed at driving a wedge between them.
1. U.S. Tariff Threats: Strategic Context and Implications
President Trump’s tariff threats target countries like India and China, pursuing de-dollarisation, seeking to maintain U.S. dollar dominance. Such tariffs risk disrupting supply chains, raising inflation, and triggering retaliatory trade barriers. For India, this necessitates diversifying diplomatic and economic partnerships to safeguard growth and development.
Source: Economic Times – Trump tariff threats
2. India’s Pragmatic Diplomatic Strategy with China
Dr. Jaishankar’s visit reflects India’s careful balancing act:
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Expanding Strategic Options: Reducing over-reliance on the U.S. by engaging China diplomatically and economically.
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Economic Realism: Leveraging regional frameworks like the SCO to counter tariff pressures and foster cooperation.
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Balancing Powers: Navigating U.S.-China rivalry with strategic flexibility.
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Promoting Regional Stability: Prioritising peaceful border management to reduce conflict risks.
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Asserting Sovereignty: Maintaining autonomy in foreign policy and strategic decisions.
Source: Times of India – Jaishankar China visit
3. China’s Assertive Diplomatic Manoeuvres
China counters U.S. pressures with systemic strategies:
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Diversifying Economic Partnerships: Through Belt and Road, and strengthening ties with the EU, Russia, and ASEAN.
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Renminbi Internationalisation: Challenging U.S. financial dominance by promoting its currency and alternatives to SWIFT.
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Building Multilateral Platforms: Leading AIIB, BRICS, and SCO to foster a multipolar global order.
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Maintaining Regional Assertiveness: Firm stance on territorial claims amid economic outreach.
Sources:
4. Trust Deficit Issue: Roots and Repercussions
The India-China trust deficit is a major impediment:
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Historical Origins: Lingering border disputes, especially Galwan 2020, cause enduring suspicion.
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Political Contrasts: Democratic India versus authoritarian China breeds different threat perceptions.
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Security Challenges: Militarisation along the LAC and the risk of escalation persist.
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Economic and Diplomatic Impact: Despite trade volume, mistrust restricts deeper integration and complicates multilateral cooperation.
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Regional Stability: Trust deficit adds volatility and hinders joint efforts on terrorism, climate, and pandemics.
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Fragile Confidence-Building: Existing CBMs remain vulnerable to political and tactical shifts.
Sources:
5. Impact of Dr. Jaishankar’s July 2025 Visit
The visit made key strides:
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High-Level Engagement: Meetings with top Chinese leaders signal a willingness to improve ties.
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De-escalation Emphasis: Both sides reaffirm peaceful border dispute management.
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Economic Cooperation: Advocacy against protectionism aims at sustaining trade relations.
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Limitations: Visit’s success depends on sustained diplomacy, transparency, and implementation of CBMs.
Sources:
6. Comparative Impact of Trust Deficit on India and China
| Dimension | Impact on India | Impact on China |
|---|---|---|
| Security Posture | Cautious, risk-averse; seeks de-escalation and dialogue | Assertive, maintains firm control; views India as a competitor |
| Economic Relations | Promotes balanced trade; wary of dependency | Uses economic leverage strategically |
| Diplomatic Engagement | Values transparency and sustained dialogue | Engages selectively; prioritises strategic gains |
| Regional Alliances | Joins Quad; cautious of China’s intentions | Distrusts India’s partnerships; promotes its own blocs |
| Conflict Sensitivity | Sensitive to border incursions; emphasises peace | Willing to assertively defend claims |
| Trust-Building Approach | Supports CBMs; demands reciprocal actions | Selective on CBMs; prioritises leverage |
Source: Economic Times – India-China trust deficit
7. Managing U.S. Pressure to Drive a Wedge: How India and China Can Balance
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Focus on Shared Interests: Leveraging economic interdependence, regional stability goals, and a multipolar world vision to build cooperation.
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Enhance Strategic Communications: Regular high-level and military dialogues to avoid misunderstandings.
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Expand Economic & Cultural Ties: Deepening trade and people-to-people exchanges to foster goodwill.
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Coordinate in Multilateral Forums: Joint action on global challenges through SCO, BRICS, G20 to demonstrate partnership.
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Resist Divide-and-Rule: Unified diplomatic messaging and strategic autonomy to avoid entangling alliances.
Conclusion
Dr. Jaishankar’s 2025 visit is a crucial step in navigating the complex India-China relationship amid global power shifts and external pressures. While it cannot alone erase deep mistrust, it sets a constructive tone for sustained efforts in diplomacy, security, and economic engagement. By managing the trust deficit and balancing external influences prudently, India and China can shape a more stable Asian and global order.
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