Supply, Strategy, and Statecraft: India’s China Policy in an Era of Economic Rebalancing

(Soumya Bhowmick – Observer Research Foundation) India’s China policy is best understood not as a choice between engagement and confrontation, but as an effort to manage economic interdependence amid strategic competition. Since 2020, New Delhi has treated deep commercial ties with Beijing as simultaneously indispensable and potentially risky, given the extent to which Chinese intermediates, machinery, and components remain embedded in India’s industrial economy. This report argues that India’s response is best described as managed interdependence: not decoupling, but selective de-risking. Through industrial policy, regulatory guardrails, trade remedies, and controls in digital and critical sectors, India seeks to reduce exposure to dependencies that create strategic vulnerability while preserving access to regional production networks. The analysis finds that progress remains uneven, especially in substitution-resistant upstream inputs, critical minerals, and rare-earth-linked supply chains. India’s objective is not lower trade per se, but resilience, diversification, and greater strategic autonomy. – Supply, Strategy, and Statecraft: India’s China Policy in an Era of Economic Rebalancing