By Justice (R) Markandey Katju (India)

The BRICS Summit 2026 in New Delhi has once again revived the debate over whether India should seek a major improvement in its relations with China.

In a recent video discussion, the well-known Indian journalist Vinod Sharma argued that India should improve its ties with Beijing. Similar views have been expressed by several commentators and China specialists. Santosh Pai, for instance, has argued that there has rarely been a better time for India to pursue a trade arrangement with China and that selective Chinese investment could help India achieve several economic objectives.

With great respect to those who advance this view, I believe it overlooks some fundamental economic and geopolitical realities.

To understand the problem, one must first understand the nature of modern China.

China continues officially to describe itself as a socialist state, but its economic behaviour increasingly resembles that of a powerful capitalist and expansionist economy. Capital, by its nature, seeks profitable investment, access to markets and reliable supplies of raw materials. Once industrialisation reaches a sufficiently advanced stage and domestic markets become inadequate to absorb production, the pressure to expand economically abroad becomes increasingly powerful.

History provides many examples. Britain expanded into India and other territories in search of markets, resources and strategic advantage. France established colonial control over Algeria and Indochina. Imperial Japan expanded into Korea, Manchuria and China. Economic power was repeatedly converted into geopolitical influence.

The form of expansion, however, need not always involve military conquest.

In the contemporary world, influence can be acquired through trade, infrastructure, finance, technology, supply chains and control over strategic assets. Ports, telecommunications systems, energy infrastructure, transport corridors and industrial supply chains can sometimes become as strategically significant as military bases.

This is the context in which China’s rise must be examined.

China possesses an enormous manufacturing base, substantial financial resources and one of the world’s largest foreign-exchange reserves. Its industries require overseas markets, investment opportunities and access to commodities. The result has been a dramatic expansion of Chinese economic activity across Asia, Africa, Latin America, Europe and beyond.

The Belt and Road Initiative is perhaps the clearest manifestation of this strategy. It consists of roads, railways, ports, pipelines, power projects and other infrastructure connecting China with large parts of Eurasia, Africa and other regions.

Projects such as Gwadar in Pakistan, Piraeus in Greece and Hambantota in Sri Lanka demonstrate why ports and transport infrastructure occupy such an important place in Beijing’s international economic policy. These facilities are commercially significant, but they can also generate long-term political and strategic influence.

China’s competitive advantage is reinforced by economies of scale, comparatively lower production costs in many sectors, state-backed finance, industrial policy and large manufacturing ecosystems. Chinese products have consequently displaced domestic manufacturers in numerous markets.

Developing economies face a particular challenge. Cheap imports may benefit consumers in the short term, but if domestic industries cannot compete, prolonged dependence on imports may weaken national manufacturing capacity.

Another source of concern is the relationship between infrastructure financing and political leverage. Chinese lending has played an important role in developing infrastructure across the Global South. Some projects have undoubtedly provided genuine economic benefits. Yet questions have also arisen over debt sustainability, contractual transparency, strategic dependence and the influence that major creditors may acquire when borrowers face financial distress.

These concerns should not simply be dismissed as anti-China rhetoric. They are legitimate questions of economic sovereignty.

India has particular reason to examine them carefully.

Under British colonial rule, India was largely prevented from developing the kind of heavy industrial base capable of competing with British manufacturing. Colonial economic policy encouraged India to remain primarily a supplier of raw materials and a market for manufactured products.

After independence in 1947, India began developing domestic industrial capacity and gradually started manufacturing goods that previously had to be imported.

Today, however, India faces a new structural challenge: its economic relationship with China is heavily unbalanced.

In 2017, India’s exports to China were approximately $16 billion, while imports were around $68 billion. Indian exports largely consisted of raw materials and lower-value goods, whereas imports from China included electronics, machinery, electrical equipment, plastics and other higher-value manufactured products.

The imbalance subsequently widened.

By 2021, India’s trade deficit with China had crossed the $100 billion mark. In the financial year 2025-26, India imported approximately $131.6 billion worth of goods from China while exporting only about $19.4 billion.

This is not a minor statistical imbalance. It raises serious questions about India’s industrial dependence.

A major economy cannot indefinitely remain dependent on another strategic competitor for electronics, machinery, telecommunications equipment, industrial components and other critical manufactured goods without considering the consequences for economic and national security.

Chinese companies have already acquired substantial positions in several sectors of the Indian economy. Companies such as Huawei, ZTE, Lenovo, Xiaomi, Haier, TCL and others have demonstrated the extraordinary global reach of Chinese industry.

There is nothing inherently objectionable about foreign companies competing in India. The question is whether the competitive relationship is genuinely reciprocal.

Indian companies seeking access to the Chinese market have frequently confronted regulatory restrictions, market-access difficulties and other structural obstacles. Meanwhile, China’s industrial champions often benefit from the scale, financing and policy support of one of the world’s most powerful states.

A sustainable economic relationship therefore cannot be built merely on greater Indian openness to Chinese investment.

India must ask a more fundamental question: will such investment strengthen India’s own industrial capacity, technological independence and employment base, or will it deepen dependence on Chinese capital, technology and supply chains?

The economic principles associated with the nineteenth-century German economist Friedrich List remain relevant here. List argued that developing countries should not expose infant industries prematurely to overwhelming competition from more advanced industrial powers. National industrial capability, in his view, was not simply an economic matter; it was an essential component of national power.

India would do well to remember that lesson.

None of this means India should seek military confrontation or permanent diplomatic hostility with China. Geography cannot be changed. India and China are neighbours, major civilisations, nuclear powers and two of the most important states in Asia. Dialogue is therefore necessary.

But dialogue should not be confused with strategic complacency.

There is a tendency in some circles to believe that warmer rhetoric, increased trade or renewed slogans of Asian solidarity can somehow overcome the structural competition between India and China.

That is wishful thinking.

The problem is not the personal attitude of Chinese leaders or the friendliness of individual Chinese citizens. Nor should criticism of Beijing’s policies descend into hostility towards the Chinese people.

The issue is structural.

China’s industrial scale, economic ambitions and geopolitical strategy create powerful incentives for Beijing to expand its commercial and strategic influence. India must therefore approach the relationship not sentimentally but realistically.

The correct policy is neither reckless confrontation nor naïve accommodation.

India should maintain diplomatic channels, cooperate with China where interests genuinely coincide, and remain engaged through BRICS and other multilateral institutions. At the same time, it must reduce critical economic dependencies, strengthen domestic manufacturing, diversify supply chains, protect strategic sectors, insist upon genuine reciprocity and scrutinise foreign investment in sensitive industries.

BRICS may provide an important platform for cooperation among major emerging economies, but membership of the same organisation does not eliminate differences of national interest.

International politics is ultimately governed less by slogans than by power, economics and strategic interest.

India should engage China—but with its eyes open.

A nation of India’s size and potential cannot afford either hostility for its own sake or dependence disguised as cooperation.

Its objective should be strategic autonomy: trading with China where advantageous, resisting unhealthy dependence where necessary, and building the domestic industrial strength required to negotiate with Beijing as an equal rather than as an increasingly dependent market.

That would be a far more realistic foundation for India-China relations than either confrontation or romantic notions of renewed Hindi-Chini bhaichara.

The Author is Jurist and Former Justice of Supreme Court of Indi