In October, China and India reached an agreement on patrolling a stretch of their long-disputed shared border. The deal brought an end, for the time being, to a four-year standoff in the high mountains of the Himalayas that had severely strained ties between the two countries. It also allowed Indian Prime Minister Narendra Modi and Chinese President Xi Jinping to meet in Russia and hold talks for the first time in five years. In 2020, a bloody confrontation in the Galwan Valley had left dozens of soldiers dead and led to a deep freeze in bilateral relations between the two Asian giants. The Indian public fumed at what it saw as Chinese aggression, and Modi’s government canceled direct flights between the countries and banned the social media app TikTok, among other measures meant to punish China. Now, many analysts see the possibility of a reset and a return to normal ties.

But China and India have no desirable “normal” status quo to return to. Challenges abound in the bilateral relationship, and China’s ambitions continue to circumscribe India’s ability to act at the regional and global levels. Many flash points remain along the border and could be reactivated at any time by Xi’s aggressive regime. Although Modi has tried harder than his predecessors to hold a strong line against Chinese expansionism, India’s economy remains hugely dependent on China. Even as India’s exports to China have dropped somewhat in the last five years, its imports from China have ballooned. India relies on China for sophisticated technology, such as personal computers, laptops, and the components used in making telecommunications equipment and mobile phones. When the Indian government moved in August 2023 to institute licensing controls on the import of laptops and personal computing devices in the hope of stemming the influx of Chinese technology, a swift backlash from Indian industry groups forced it to scrap its plans.

That deference to industry reveals a larger problem. Indian leaders, like many in other countries, have long separated matters of national security and economic growth. But they are inextricable. India needs to reach a more comprehensive understanding of the threat China poses. It should, for instance, establish a ministry of economic security, tasked with assessing the scale and scope of Chinese economic involvement in India and finding ways to protect India from the risks of this engagement. In this way, India will finally act on the recognition that economic might bolsters a country’s capacity to protect itself, and national security fosters a positive environment for growth. But if Indian policymakers do not break the conceptual barrier between economics and security, India will remain vulnerable to China and its ambitions for hegemony in Asia.

In 1962, China and India fought a hugely one-sided war in the Himalayas that resulted in India’s losing vast tracts of land; spats over the long, contested border are still ongoing. The two countries have never formally agreed on the exact line of their shared border, which snakes over 2,000 miles, largely through high, inhospitable terrain. The defeat in 1962 has haunted India’s political elite for decades. A thaw in relations in the 1980s allowed both countries to pursue closer cultural and economic engagement, but resolving the contentious border question was left to future generations. In the 1990s, the neighbors signed accords that emphasized the principle of not using military force to settle the border dispute, allowing India to believe it had won peace even though no conclusive agreement about the border had been reached. But in the years that followed, China strengthened its infrastructure along the border to better support troop deployments. India was not oblivious to these moves, but it opted not to develop corresponding infrastructure on its side out of fear that a Chinese invasion could be abetted by Indian-built roads.

Indian governments also hoped that conflict between the two countries was a thing of the past. Under Prime Minister Manmohan Singh, who ruled from 2004 to 2014, many officials and analysts assumed that China and........

© Foreign Affairs