Table of Contents

PART – A

Q1. What is Unipolarity?

Ans. Unipolarity in international relations refers to a power structure where one state or actor holds significantly greater power and influence than other states. In a unipolar system, the dominant power possesses unrivalled military, economic, and political capabilities, giving it a significant advantage over other actors in shaping global affairs. 

Q2. Define ‘Collective Security’.

Ans. Collective security is there to manage national power. It is based on the principle that states collectively achieve peace and security in case of violation by any one state or states. It is a device of power management and its purpose is to maintain international peace and security by collective efforts of all the states.

Q3. What is foreign policy?

Ans. Foreign policy is a set of strategic principles and actions adopted by a state to manage its relationships with other nations. Its primary purpose is to protect and advance national interests such as security, economic prosperity, and the well-being of its citizens, within the complex environment of global interdependence.

Q4. What do you understand by emerging trends?

Ans. Emerging trends refer to new, developing patterns or significant shifts in political behaviour, governance, international relations, and ideologies that are currently gaining momentum and are likely to shape the future political landscape.

Q5. When was UNO established?

Ans. October 24, 1945.

Q6. Name the persons who signed Panchsheel.

Ans. The Panchsheel Treaty (Five Principles of Peaceful Coexistence) was formally signed on April 29, 1954, by the Indian Prime Minister Jawaharlal Nehru and the Chinese Premier Zhou Enlai.

Q7. Into how many countries did USSR disintegrate?

Ans. In 1991, USS got disintegrated into 15 countries.

Q8. What is Détente?

Ans. Détente is a French word which means relaxation of tensions. It was used to describe the normalisation of relations between the USA and the USSR in international relations. During the 1970s, both superpowers decided to overcome the cold war and relax their relations into the era of détente. But a new cold war was started on early 1980s. Fortunately, the new cold war got replaced by new détente in 1987. The new détente played a big role in ending the cold war in international relations.

Q9. What was the nature of Cold War?

Ans. The nature of the Cold War was a state of intense ideological, political, and economic rivalry between the US-led Western bloc and the Soviet-led Eastern bloc; a global struggle between Liberal Democracy/Capitalism (USA) and Communism (USSR). It was "cold" because the two superpowers never engaged in a direct full-scale military conflict, instead relying on proxy wars, the arms race, and diplomatic manoeuvring.

Q10. Define 'Neo-colonialism'.

Ans. Neo-colonialism refers to the continued economic, political, and cultural dominance of former colonial powers and other developed countries over former colonies and developing nations, despite their formal independence. It is characterized by indirect forms of control and exploitation, often through economic mechanisms and unequal power dynamics.

PART – B

Q11. Discuss the significance of Foreign Policy.

Ans. The most important significance of foreign policy of a nation is its national interest. All nations conduct their foreign relations for attainment of national interest. It helps in clearly reflecting the national policy as well as traditional values of a country.

The importance of foreign policy is that it helps the national government to device strategies, guidelines, methods, and agreements, and assist them in dealing in the international arena. Sovereign states interact with each other by keeping in view their foreign policy. Thus, foreign policy acts as a charter.

Foreign policy states the points on which a state can agree with the other state and where they cannot get into terms with each other. The sole reason behind the possibility of this agreement and disagreement is the national interest of a state.

Q12. Examine the scope of international relations.

Ans. As a subject of study, international relations is relatively new and developing subject. Its scope is continuously expanding and developing.

The scope of international relations includes:

  1. State System – The study of international relations begins with the state system as it has a great impact on international scene since last three centuries. Sovereign states strive to fulfil their interest. The incompatible interest of these sovereign states cause conflict, and international politics studies those national outcomes of conflict of sovereign states. Not all states come in conflict with other states. Some due to military, economic, racial, or cultural links cooperate with each other peacefully.
  2. Relation in conflict and cooperation – International relations studies relations between two or more states which are often complex and influenced by a variety of geopolitical, historical, social, religious, ideological, strategic, and leadership factors. Broadly speaking, these relationships have taken the form of cooperation and conflict. In spite of the fact there are more conflict in international history than cooperation, both have co-existed throughout the various period of history of international relations.
  3. National Interest – It is an unclear concept that carries a meaning according to the context in which it is used. Governments have always used it in ways suitable to them and to their objective of justifying the actions of their state. It is the national interest that determines the shape of scope of international relations of countries. This in turn, affects the direction of global relations. Accordingly, the scope of international relations includes the study of objectives of various countries, they try to achieve under their national interest.
  4. Power – It is ultimately the power that determines the inter-state relations. The success or failure of a country that achieves the objective it has set under its national interest is depending upon the extent of national power of a country. Thus, super power will be in better position to pursue its national interest agenda, than a regional or smaller power. The study of national power forms an important part of the subject matter of international relations.

Q13. Describe the role of MNCs in developing countries.

Ans. A multinational corporation (MNC), also known as a multinational enterprise (MNE), is a company that operates and has business activities in multiple countries. These corporations have a presence in various countries beyond their home country and conduct business operations, such as manufacturing, sales, and services, in multiple locations worldwide.

Role of MNCs in developing countries:

  1. Capital Investment and FDI - MNCs provide a major source of Foreign Direct Investment (FDI). Developing nations often face a shortage of internal capital; MNCs fill this gap by investing in infrastructure, manufacturing units, and service sectors. This inflow of capital helps stabilise the local currency and stimulates domestic economic growth.
  2. Technology and Knowledge Transfer - One of the most vital roles of MNCs is the introduction of advanced technology and modern management practices. They bring in state-of-the-art machinery and digital infrastructure that might otherwise be unavailable. By training the local workforce to operate complex systems, MNCs help upgrade the human capital of the host country.
  3. Employment Generation and Competition - MNCs create direct and indirect employment opportunities, ranging from factory workers to high-level managerial roles. Increased job availability often leads to a rise in the average income and standard of living. The entry of MNCs forces local companies to become more competitive, often resulting in better quality products and lower prices for consumers.
  4. Integration into the Global Value Chain - MNCs help developing countries integrate into the global economy. By setting up production bases, these countries become part of a global supply chain, allowing them to export goods and services to international markets. This boosts the country’s export earnings and reduces its isolation from global trade trends.

While MNCs drive growth, political scientists often point out that they can also exert undue influence over national policies (lobbying), prioritize profit over environmental standards, and lead to the "repatriation of profits," where the wealth generated is sent back to the corporation's home country rather than being reinvested locally.

Q14. What were the causes of emergence of Neo-Colonialism?

Ans. Neo-colonialism refers to the continued economic, political, and cultural dominance of former colonial powers and other developed countries over former colonies and developing nations, despite their formal independence. It is characterized by indirect forms of control and exploitation, often through economic mechanisms and unequal power dynamics.

Causes of Emergence of Neo-Colonialism

The emergence of neo-colonialism can be attributed to a combination of historical, economic, and political factors. Here are some key causes that have contributed to its emergence:

  1. Colonial Legacy - The historical legacy of colonialism laid the foundation for neo-colonialism. Former colonial powers established economic and political systems that continued to favour their interests even after formal independence. They maintained control over key sectors, resources, and markets, perpetuating economic and political dependency.
  2. Economic Interests - The pursuit of economic interests by developed countries is a significant driver of neo-colonialism. Developed nations seek to secure access to natural resources, cheap labour, and new markets in developing countries. They utilize economic mechanisms such as unfair trade practices, unequal investment flows, and debt dependency to maintain control and extract wealth from these nations.
  3. Geopolitical Strategies - Neo-colonialism can also be driven by geopolitical strategies of developed nations. They may seek to maintain spheres of influence, strategic military bases, and political control in regions rich in resources or of strategic importance. This allows them to project power and protect their national security interests.
  4. International Financial Institutions - International financial institutions, such as the World Bank and the International Monetary Fund (IMF), play a role in perpetuating neo-colonialism. Conditions imposed by these institutions as part of loan agreements often prioritize economic policies that align with the interests of developed countries, leading to the erosion of national sovereignty and exacerbating economic dependency.
  5. Political Interference - Developed countries exert political influence and interference in the affairs of developing nations to safeguard their interests. This can involve supporting or undermining governments, influencing elections, or promoting policies that align with their own objectives rather than the welfare of the local population. Political interference helps maintain control and perpetuate neo-colonial relationships.
  6. Technological Advantages - Developed countries often possess superior technological capabilities, which they use to their advantage in neo-colonial relationships. They control advanced technologies, patents, and intellectual property rights, creating barriers for developing nations to access and develop their own technological capabilities. This perpetuates dependency on developed nations for technology transfer and innovation.
  7. Information and Media Dominance - Developed countries, through their dominance in information and media outlets, shape narratives and influence public opinion globally. This allows them to promote their own perspectives, values, and interests, further solidifying their influence and control over developing nations.

PART – C

Q15. Examine the implications of collapse of USSR.

Ans. The collapse of the Soviet Union in 1991 had profound implications for global politics, regional dynamics, and the international order. Here are some key implications of the collapse of the USSR: 

  1. End of the Cold War - The collapse of the USSR marked the end of the Cold War, the decades-long ideological and geopolitical rivalry between the United States and the Soviet Union. With the disappearance of the Soviet Union as a superpower, the world moved away from the bipolar global order to a more unipolar system with the United States as the sole superpower. 
  2. Disintegration of the Soviet Union - The collapse of the USSR resulted in the emergence of independent states, including Russia, Ukraine, Belarus, and others. The disintegration of the Soviet Union led to political and economic transformations, the establishment of new governments, and the realignment of borders in the post-Soviet space. 
  3. Transition to Market Economies - The collapse of the USSR brought about significant economic changes in the newly independent states. Many former Soviet republics transitioned from centrally planned economies to market oriented systems, adopting economic reforms and liberalizing trade and investment. 
  4. Geopolitical Shifts - The collapse of the USSR brought about significant geopolitical shifts, particularly in Eastern Europe and Central Asia. NATO expanded its membership to include former Soviet satellite states, and the European Union grew in size. The dissolution of the Warsaw Pact and the withdrawal of Soviet forces from Eastern Europe reshaped the security landscape in the region.
  5. Rise of Russia as a Regional Power - With the collapse of the USSR, Russia emerged as the successor state and retained a significant portion of Soviet military and economic infrastructure. It embarked on a process of political and economic transformation, seeking to regain influence and establish itself as a regional power in Eurasia.
  6. Regional Conflicts and Instability - The collapse of the USSR led to several regional conflicts and internal tensions within newly independent states.  Conflicts such as the war in Chechnya, the Nagorno-Karabakh conflict, and the conflicts in Transnistria and Abkhazia emerged, leading to political instability, humanitarian crises, and border disputes in the post-Soviet space. 
  7. Nuclear Non-Proliferation - The collapse of the USSR had significant implications for nuclear non-proliferation efforts. As the Soviet Union disintegrated, the newly independent states inherited nuclear weapons and infrastructure. However, through negotiations and international agreements, efforts were made to prevent the spread of nuclear weapons and to secure and dismantle the Soviet nuclear arsenal. 
  8. Shift in Global Balance of Power - The collapse of the USSR and the end of the Cold War altered the global balance of power. The United States emerged as the dominant superpower, with increased influence and a larger role in shaping global politics. This shift in power dynamics had implications for global governance, international institutions, and the pursuit of national interests by various countries. 
  9. Impact on Globalization and Integration - The collapse of the USSR opened up new opportunities for globalization and integration. Former Soviet republics sought to establish economic ties and diplomatic relations with other countries, leading to increased global interconnectedness and the integration of post-Soviet states into the global economy.
  10. Challenges of Nation-Building - The collapse of the USSR presented significant challenges of nation-building for the newly independent states.  These challenges included establishing democratic institutions, addressing ethnic and national tensions, developing effective governance structures, and managing economic transitions.

Collapse of the Socialist Bloc and the Liberalisation of Socialist Regime

The new policy initiatives of the USSR and the signing of INF Treaty with the USA in 1987 gave a boost to process of arms control, peaceful coexistence and cooperation between East and West. Gorbachev adopted the policy of encouraging liberalisation towards the West. The concepts of Perestroika and Glasnost became instrumental in producing a movement towards liberalisation and democratisation in the socialist countries of Europe, between 1988 and 1990, the process of liberalisation of East European countries started. The communist regimes in all these states began getting replaced by liberalised non-communist democratic regimes. In the USSR, the new liberalisation and restructuring got transformed into a movement for democratic rights and freedom. The economic weakness of the USSR reflected in shortages in consumer goods and food, provided fuel to the movement for liberalisation.

The Union Republics of USSR, one after the other, started declaring their independence. The Baltic states of Estonia, Lithuania and Latvia were first to secure their independence from the USSR. By November 1991, the soviet authority got almost totally eclipsed. All the soviet republics declared their independence. In November 1991, 9 republics of the USSR which had declared themselves as sovereign independent states, signed a treaty to form the Commonwealth of Independent States (CIS). In December 1991, the flag of the USSR was replaced by the flag of Russia. Boris Yeltsin became the President of Russia. Russia inherited permanent seat of the USSR in the UN Security Council. With this, the collapse of the USSR became complete and a superpower got confined to the pages of history.

Disintegration of the USSR led to disintegration of entire Socialist Bloc. The Socialist Bloc now came to be a Liberalised Bloc. The Eastern European States throwed themselves now closer to the Western European States. East Germany merged with West Germany to become one single Germany.

Q16. Give a detailed accounts of the events during Cold War.

Ans. The Cold War was a period of geopolitical tension and rivalry between the United States and the Soviet Union (USSR) and their respective allies. It lasted roughly from the end of World War II in 1945 to the early 1990s. Although direct military conflict between the two superpowers did not occur, there were numerous proxy wars, arms races, and ideological clashes during this time. 

Events during Cold War:

  1. The Truman Doctrine (1947): President Harry Truman pledged to support "free peoples" resisting attempted subjugation by armed minorities or outside pressures, effectively the birth of the Containment Policy.
  2. The Marshall Plan: A massive US economic aid package to rebuild Western Europe, designed to make capitalism more attractive than communism.
  3. The Berlin Blockade and Airlift (1948–1949): Stalin blocked all land routes into West Berlin. The Allies responded by flying in supplies for nearly a year, marking the first major "battle" of the Cold War without a single shot fired.
  4. Creation of Alliances: In 1949, the West formed NATO (North Atlantic Treaty Organization). The Soviets eventually countered this in 1955 with the Warsaw Pact.
  5. The Korean War (1950–1953): The first "proxy war" where the US-led UN forces fought the Soviet-backed North. It ended in a stalemate at the 38th Parallel. While the fighting ended in a stalemate near the 38th parallel, the actual border today is the Military Demarcation Line (MDL) within the Demilitarized Zone (DMZ).
  6. The Space Race: In 1957, the USSR launched Sputnik, the first man-made satellite. This panicked the US, leading to the creation of NASA and the eventual moon landing in 1969.
  7. The Berlin Wall (1961): To stop East Germans from fleeing to the West, the USSR erected a wall through the heart of Berlin, becoming the ultimate physical symbol of the "Iron Curtain."
  8. The Cuban Missile Crisis (1962): After the US discovered Soviet nuclear missiles in Cuba, a 13-day standoff ensued. President John F. Kennedy and Nikita Khrushchev eventually reached a deal: the USSR removed the missiles, and the US secretly agreed to remove its own missiles from Turkey.
  9. The Vietnam War: A long, gruelling conflict where the US attempted to prevent North Vietnamese communists from taking over South Vietnam. It became a significant blow to US prestige and domestic unity.
  10. SALT Treaties: Strategic Arms Limitation Talks aimed to cap the number of nuclear weapons both sides possessed.
  11. Soviet Invasion of Afghanistan (1979): This ended the period of Détente. The US backed the Afghan mujahideen against the Soviet military, leading to a "Soviet Vietnam".
  12. The Reagan Era: In the early 80s, President Ronald Reagan took a hard-line stance, calling the USSR an "Evil Empire" and launching the Strategic Defence Initiative (SDI), nicknamed "Star Wars."
  13. Gorbachev’s Reforms: Mikhail Gorbachev introduced Glasnost (openness) and Perestroika (restructuring). He realized the Soviet economy could no longer keep up with US military spending.
  14. 1989: The Year of Miracles: Peaceful revolutions swept through Eastern Europe. The Berlin Wall fell in November 1989, symbolizing the end of Soviet control over the satellite states.
  15. Dissolution of the USSR (1991): After a failed coup by hardliners, the Soviet Union officially dissolved on December 26, 1991, leaving the United States as the world's sole superpower.

Q17. Discuss the impact of third world countries on International relations.

Ans. The concept of the "Third World" originated during the Cold War era and referred to a group of countries that were not aligned with either the capitalist "First World” (led by the United States and its allies) or the communist "Second World" (led by the Soviet Union and its allies). The term "Third World" was initially used to describe countries that were newly independent from colonial rule and faced common challenges of poverty, underdevelopment, and political instability.

The rise of the Third World can be attributed to several factors: 

  1. Decolonization - The process of decolonization, which took place primarily in the mid-20th century, led to the emergence of numerous newly independent countries in Africa, Asia, the Caribbean, and the Pacific. These countries sought to establish their own identities and pursue socio-economic development after centuries of colonial rule. 
  2. Non-Aligned Movement - Many newly independent countries formed the Non-Aligned Movement (NAM) in the 1950s and 1960s. NAM aimed to promote the interests of developing nations, maintain neutrality during the Cold War, and advocate for global justice and equality. It provided a platform for Third World countries to collaborate, share experiences, and assert their collective voice on international issues. 
  3. Economic Development and Modernization - The rise of the Third World was marked by efforts to promote economic development and modernization. Many countries implemented policies aimed at industrialization, infrastructure development, and improving education and healthcare systems. This included initiatives such as import substitution industrialization, agrarian reforms, and investment in social welfare programs. 
  4. Global South-South Cooperation - Third World countries increasingly engaged in South-South cooperation, fostering economic, political, and cultural ties among themselves. This involved exchanging knowledge, technology, and resources, as well as promoting regional integration and solidarity. Institutions like the Group of 77 (G77) and the African Union (AU) played key roles in promoting cooperation among developing countries. 
  5. Resource Wealth and Geopolitical Significance - Some Third World countries possessed abundant natural resources, such as oil, minerals, and agricultural products, which attracted the attention of global powers. The strategic significance of these resources in the global economy contributed to the rise of certain Third World nations as key players in international relations. 
  6. Globalization and Changing Dynamics - The forces of globalization, advancements in technology, and changing geopolitical dynamics have also influenced the rise of the Third World. The integration of global markets and the emergence of new economic powers have created opportunities for developing countries to participate in global trade, attract foreign investment, and exert greater influence on the international stage.

Impact of Third World

The impact of the Third World on international relations has been significant and has shaped the dynamics of global politics in various ways. Here are some key impacts: 

  1. Non-Aligned Movement - The Third World, through the Non-Aligned Movement (NAM), exerted influence on international relations during the Cold War. NAM countries pursued a policy of neutrality and independence, seeking to distance themselves from the ideological rivalry between the superpowers—the United States and the Soviet Union. NAM provided a platform for Third World countries to assert their collective voice and advocate for their interests on issues such as decolonization, disarmament, and economic justice. 
  2. Increased Global Influence - The rise of Third World countries has diversified and expanded the geopolitical landscape. These countries, with their growing populations, natural resources, and economic potential, have gained increasing importance in global affairs. They have emerged as significant actors in international organizations, such as the United Nations, shaping policy debates, influencing resolutions, and pushing for reforms to address the needs and concerns of developing nations. 
  3. South-South Cooperation - Third World countries have fostered South-South cooperation, promoting economic, political, and cultural ties among themselves. This has facilitated the exchange of knowledge, technology, and resources, and enabled developing countries to support each other’s development efforts. South-South cooperation has challenged the traditional North-South power dynamics and contributed to a more multipolar world. 
  4. Global Development Agenda - The Third World's concerns and priorities have influenced the global development agenda. Issues such as poverty eradication, sustainable development, climate change, and social justice have gained prominence on the international stage due to the advocacy of developing countries. The Millennium Development Goals (MDGs) and the subsequent Sustainable Development Goals (SDGs) reflect the global recognition of the importance of addressing the needs of the Third World. 
  5. Economic Influence - Third World countries have become significant players in the global economy. Rapid economic growth, industrialization, and technological advancements in countries like China, India, Brazil, and other emerging economies have reshaped global trade, investment patterns, and supply chains. These countries have become major markets, investors, and sources of innovation, challenging the economic dominance of traditional powers. 
  6. Global South Solidarity - The Third World has fostered a sense of solidarity among developing nations. This has been evident in joint diplomatic efforts, voting blocs, and regional cooperation mechanisms. Through regional organizations like the African Union (AU), Association of Southeast Asian Nations (ASEAN), and the Community of Latin American and Caribbean States (CELAC), Third World countries have worked together to address common challenges, promote regional stability, and pursue shared goals.

Q18. Write an essay on India-China relations.

Ans. India-China relations are complex and dynamic shaped by historical ties, economic collaboration, and persistent border disputes. Formal diplomatic relations were established on April 1, 1950, when India became the first non-socialist bloc country to recognise China. However, the 1962 border conflict caused a major setback. Efforts by the Indian government in 1988 revived bilateral ties, fostering trade, cultural exchanges, and people-to-people connections.

Despite ongoing security and strategic concerns, both nations continue to work toward a structured framework for cooperation. The focus remains on balancing national interests while fostering a constructive partnership that enhances regional stability and mutual growth.

Bilateral Relations / Cooperation

Political Relationship

India-China political relations are complex, marked by both cooperation and conflict. While the two nations have a long history of interaction, including periods of close ties and shared principles like the Five Principles of Peaceful Coexistence, border disputes, particularly the 1962 conflict and the more recent Line of Actual Control (LAC) tensions, have significantly strained their relationship. Despite these challenges, both countries have also pursued economic cooperation and engaged in high-level diplomatic exchanges.

As we discussed above, India-China relations were first established in 1950 with India becoming the first non-socialist bloc country to establish diplomatic relations with China. The relations between both the countries evolved over time with high-level visits from both the countries and increase cooperation using several multilateral forums.

Some major developments include:

  1. Panchsheel Agreement – The Panchsheel Agreement of 1954 includes five principles of peaceful co-existence. These five principles are:
  1. Mutual respect for territorial integrity and sovereignty.
  2. Mutual non-aggression.
  3. Mutual non-interference.
  4. Equality and mutual benefit.
  5. Peaceful co-existence.
  1. Dialogue Mechanisms - Over thirty dialogue mechanisms exist between India and China, covering political, economic, cultural, people-to-people, consular matters, and regional and global issues. Few major talks include:
  1. During Prime Minister Atal Bihari Vajpayee’s visit in 2003, India and China signed the Declaration on Principles for Relations and Comprehensive Cooperation, and mutually decided to appoint Special Representatives (SRs) to explore the framework of a boundary settlement.
  2. During President Xi Jinping’s visit to India in September 2014, the two sides redefined their bilateral engagement as a ‘Closer Developmental Partnership’. In May 2015, Prime Minister Narendra Modi visited China and held meetings with President Xi Jinping and Premier Li Keqiang. Prime Minister Modi and President Xi held their first informal Summit in Wuhan on 27-28 April 2018 and their second informal Summit in Chennai on 11-12 October 2019.

Multilateral Relationship

India and China actively engage in multilateral fora such as BRICS, SCO, G-20, and Asian Infrastructure Investment Bank (AIIB). The two leaders have met on the side lines of various multilateral summits. Prime Minister Modi visited China to participate in the G20 Summit in Hangzhou (Sept 2016), the BRICS Summit in Xiamen (Sept 2017) and the SCO Summit in Qingdao (June 2018). President Xi visited India in October 2016 to participate in the BRICS Summit in Goa. China’s Premier Li Qiang attended the G20 Summit chaired by India in New Delhi on 09-10 September 2023. 

  • BRICS: BRICS, which originally stand for Brazil, Russia, India, China and South Africa, is a group formed by eleven countries: Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Indonesia, and Iran. It serves as a political and diplomatic coordination forum for countries from the Global South and for coordination in the most diverse areas. India and China are among its founding members.
  • SCO: Shanghai Cooperation Organization (SCO), is an intergovernmental organization established in 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan with the aim of promoting cooperation and peace among its member states, as well as fostering “a new democratic, fair and rational international political and economic order.” India joined the grouping in 2017 and, since then, remained an important contributor.
  • G20: Group of Twenty (G20) is an intergovernmental forum for international economic cooperation. India and China have cooperated in the progress of the G20.  
  • AIIB:  Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that provides financing for infrastructure in Asia and beyond. India and China are included among its founding members.

Economic Relationship

India and China have a complex economic relationship characterized by significant trade volume, particularly in imports from China, but also by investment imbalances and ongoing geopolitical tensions. While trade has flourished, reaching $118.4 billion in FY24, with China regaining its position as India's largest trading partner, investment flows, especially from China to India, remain relatively low. This disparity, coupled with border disputes, creates a dynamic of managed rivalry where cooperation and competition coexist. 

India-China Economic and Commercial Relations are shaped through various dialogue mechanism such as:

  • Joint Group on Economic Relations, Science and Technology (JEG), led by the Commerce Ministers of both sides. Joint Economic Group (JEG) was established in 1988 during the visit of Prime Minister Rajiv Gandhi to China, to discuss trade cooperation issues. So far 11 JEGs were held with the last one in Delhi in March 2018. During the 9th JEG held in 2012, the two sides also set up three working groups on Economic and Trade Planning Cooperation (ETPC), Trade Statistical Analysis (TSA) and Service Trade Promotion (or Trade in Services – TIS)
  • Strategic Economic Dialogue (SED) was established during the visit of China’s Premier Wen Jiabao to India in December 2010, to discuss macro-economic cooperation. So far 6 SED meetings have taken place with the last one held in New Delhi in September 2019. There are 5 Working Groups under SED: Infrastructure, Environment, Energy, High Technology, Policy Coordination and Pharmaceuticals. The SED is co-chaired by Vice-Chairman NITI Aayog and Chairman, Chinese National Development and Reforms Commission (NDRC), PRC.
  • The NITI Aayog – Development Research Centre of China (DRC) Dialogue was established pursuant to the MoU signed during the visit of Prime Minister Narendra Modi to China in May 2015, to discuss global economic cooperation issues. Vice-Chairman NITI Aayog leads the Indian delegation while President (Minister-level) of DRC of China leads the Chinese delegation. The fifth NITI-DRC dialogue was held in Wuhan on 28-29 November 2019.
  • India-China Financial Dialogue is held in accordance with the MoU signed during China’s Premier Wen Jiabao’s visit to India in April 2005. The ninth India-China Financial Dialogue was held in New Delhi on 25 September 2019 which was co-chaired by Finance Secretary.

Cultural Relations

China and India have been leading the way of civilizational exchanges in Asia since ancient times. There are early mentions of China in ancient Indian literature dating back to the 2nd century BCE, when cultural interactions between China and India began.

The cultural relations between India and China include people-to-people ties, the influence of yoga & Bollywood, education exchanges, etc.

  • Religious sites: India constructed a Buddhist temple in Luoyang, Henan Province, in honor of the Indian monks Kashyapa Matanga and Dharmaratna in 2010.
  • Diaspora: As of 2024, the Indian diaspora in China is relatively small, with a population estimated at around 56,000 individuals, primarily consisting of medical students and business professionals.
  • Bollywood Movies and Yoga: The popularity of Indian Bollywood movies like Dangal and Yoga in China has improved India’s cultural relations with China.
  • Education: In 2006, India and China signed the Education Exchange Programme (EEP), an umbrella agreement that governs educational cooperation between the two countries.

Military Relationship

India China Military Relations have gone through cycles of conflict and cooperation. Military relations include peace agreements, confidence-building measures, and military exercises among others.

Military exercise between India and China: The primary joint military exercise between India and China is called "Hand in Hand". It's an annual event focused on counter-terrorism operations under a UN mandate, enhancing interoperability between the two armies. The exercises involve tactical operations and drills in various combat skills. 

Challenges in India-China Relationship

The relationship between India and China faces significant challenges, primarily stemming from a long-standing border dispute, a trade imbalance, and growing strategic competition in the Indo-Pacific region. These factors contribute to a complex dynamic where cooperation and competition coexist. 

Key Challenges include –

  1. Border Disputes: The unresolved Line of Actual Control (LAC) remains a major source of tension, with multiple military standoffs and clashes, including the Galwan Valley clash in 2020. India prioritizes resolving border issues before normalising broader relations, while China seeks to decouple border talks from other aspects of the relationship.
  2. Five Finger Policy: It regards Tibet as China’s right-hand palm, with five fingers on its periphery: Ladakh, Nepal, Sikkim, Bhutan, and the North-East Frontier Agency (now known as Arunachal Pradesh), which China considers its responsibility to “liberate”.
  3. Huge Trade Imbalance: India has the largest trade deficit with China. Concerns exist about India's dependence on China for certain critical goods and technologies.
  4. China’s growing influence: China's economic and military power, coupled with its assertive foreign policy, causes unease in India.
  5. China's relationship with Pakistan: China's close ties with Pakistan, including its support on issues related to Kashmir, are viewed as a security threat by India.

Conclusion

The India-China relationship is complex, marked by both cooperation and competition. While high-level exchanges suggest a potential easing of tensions, particularly after the 2020 border clashes, a deeper strategic rivalry persists. The unsettled border, trade imbalance, and China's growing influence in South Asia are key concerns for India. Despite these challenges, both nations recognize the importance of managing their relationship, especially given their global significance as economic powers and their shared interests in regional stability and development.

The India-China relationship has significant global implications, particularly for the future of Asia and the global order. Cooperation between these two major powers can contribute to global stability and development, while their competition can exacerbate tensions and instability.