India and China must build a pragmatic and functional relationship that allows both nations to pursue their respective interests without allowing differences to escalate into open confrontation, according to a recent analytical report. The assessment, published on 1 September, comes as the two Asian giants navigate a cautious normalisation following years of diplomatic strain rooted in the 2020 Galwan Valley crisis.

The Asymmetry at the Heart of the Relationship

Former Indian diplomat Sanjay Kumar Verma, writing in India Narrative, argues that a fundamental imbalance defines how New Delhi and Beijing view each other. 'India and China are often described as the two great civilisational powers of Asia, two of the world's largest countries and increasingly important poles in a changing international order. All of this is true. Yet there is an important asymmetry in their relationship that is less often acknowledged: India and China do not attach the same strategic importance to each other,' Verma wrote.

For India, he notes, China shapes nearly every dimension of national interest — border security, neighbourhood dynamics, economic policy, and strategic alliances. For China, India is significant but competes for attention alongside the United States, Taiwan, Russia, Japan, Europe, and Southeast Asia.

Normalisation in Progress, But Fragile

Verma acknowledges that the sharp deterioration triggered by the Galwan clash of 2020 has gradually given way to cautious diplomatic repair since 2024. Direct flights have resumed, visa procedures have been eased, the Kailash Mansarovar pilgrimage has restarted, and several institutional and people-to-people exchanges are being restored.

'The latest border consultations in August 2026 again underlined the importance of maintaining peace and tranquillity along the frontier. The continuing sensitivity of the border is a reminder that normalisation remains a work in progress,' he noted. The core challenge, according to Verma, is not merely reducing tensions but determining whether intense competition can be kept from spiralling into confrontation.

The Economic Dimension

The report argues that a more balanced economic relationship would serve both countries. It would reduce India's vulnerability to supply-chain disruptions while giving China greater access to one of the world's fastest-growing major markets. Critics of the current trade structure have long pointed to India's significant bilateral trade deficit with China as a structural risk.

What Beijing Needs to Acknowledge

Verma is direct about an adjustment he believes Beijing must make. 'India is no longer a peripheral Asian power whose strategic choices can be influenced primarily through pressure. Its economic weight, military capabilities, geographic position, international partnerships and growing influence in the Global South make India's rise a structural feature of the Asian order,' he wrote. This framing signals that any durable bilateral framework must treat India as an equal actor, not a secondary one.

The People-to-People Deficit

Beyond diplomacy and economics, Verma flags a widening societal gap as a long-term risk. Strained bilateral ties have sharply curtailed engagement between students, scholars, journalists, business communities, and tourists on both sides. 'When societies stop talking to each other, governments increasingly encounter one another through narrow strategic narratives,' he warned. Restoring academic, cultural, business, and tourism exchanges, he argues, is not a matter of goodwill alone — it can help close the growing perceptual gap between the two societies. With neither country able to afford a permanently adversarial relationship, the path forward, the report suggests, lies in structured pragmatism over ideological alignment.