The unprecedented rise of two Asian giants since the 1990s has become a major subject of academic discourse in contemporary Tinternational relations. China and India both launched economic reforms, the former in the late 1970s and the latter in the early 1990s; both witnessed high growth rates of 8-10 percent and 6-8 percent respectively. While both countries have registered high GDP growth, China maintains an edge over India in foreign trade, investment, foreign currency reserves, manufacturing, and aerospace and defence industry, while India has a sizeable advantage in the services sector.

The emergence of China and India as major regional powers raises hope that the two could help shape the future international system and contribute differently towards Asia’s development and harmony. This is in contrast to balance of power politics, which has dominated the discourse in the last few decades. While great opportunities exist in many areas for both Beijing and New Delhi to seek and strengthen bilateral cooperation given shared interest and priorities, competition and great power ambitions burdened by historical legacies rooted in territorial disputes largely offset hope for peace and tranquillity. The lack of trust and mutual suspicion amidst a tense strategic landscape defined by America’s ‘pivot’ to Asia is further driving both countries apart, at the cost of peaceful development.

There have been many positive developments in Sino-Indian relations over the past decade. Both nations have witnessed summit-level meetings, held joint military exercises and seen a significant increase in the volume of trade. Sino-India trade in 1987 was worth a mere $117 million, but an improved political environment and positive interactions have resulted in exponential growth of bilateral trade which could touch $100 billion by 2015. The current year has seen China emerge as India’s largest trade partner. The two countries have been communicating through strategic dialogues and both refer to their relationship as a ‘strategic and cooperative partnership for peace and prosperity,’ founded on the basis of the enigmatic concept of ‘Asian harmony.’

The relationship could be further strengthened by reducing the prevailing trust and trade deficit, institutionalising mechanisms and confidence building measures through goodwill and by carrying forward the momentum generated by high-level visits from both sides. Placing trade and economic development as top priorities in their engagement with each other could help resolve existing complexities and pave the way for a mutually beneficial relationship in the future. However, issues revolving around China’s arms transfers to Pakistan, the largest importer of Chinese weapons systems, and the recent border incursions by China like in Depsang and Burtse areas are becoming reasons for intractability, with Beijing shifting the focus of the discourse from vikas vaad (peaceful development) to creating unsustainable complications in Sino-Indian relations.