The Shanghai Cooperation Organisation (SCO) opened its latest summit today with a subtle yet significant diplomatic shift. India and China—two Asian giants often locked in a bitter border standoff—appear to have agreed on a temporary truce of pragmatism. By setting aside their border dispute, they have signalled willingness to work more closely in other sectors on the basis of “mutual respect” and “mutual interest.” “For an organisation designed to counterbalance Western dominance, this development carries weight far beyond photo opportunities and joint statements.
The first question that arises is: what does this convey? At the very least, it demonstrates that both nations recognise the futility of an endless impasse. The border question will not vanish overnight, but refusing to engage in other areas only strengthens third-party powers that benefit from an India-China rift. The SCO has historically been a forum to promote regional security, connectivity, and trade. If India and China continue to bicker, the organisation risks irrelevance. Today’s optics suggest that both sides understand the larger stakes.
But beneath the smiles lies a harder truth: economics. India’s trade imbalance with China is stark. While New Delhi exports raw materials, minerals, and low-value agricultural produce, it imports high-value electronics, machinery, and chemicals from Beijing. The deficit hovers around $100 billion—a gaping economic wound that Indian policymakers are desperate to narrow. If India is to correct this imbalance, it must both push China to open its markets for Indian goods and simultaneously diversify its export destinations.
This urgency has only grown sharper in the wake of U.S. trade measures against India. Washington’s tariff regime—whether directly aimed at India or packaged within its wider trade wars—effectively acts as an indirect sanction on Indian producers. American restrictions limit India’s ability to expand market share in sectors where it is globally competitive, such as steel, textiles, and agriculture. India has therefore begun looking eastward and northward: to China, Russia, Central Asia, and even SCO observer states, as alternate markets to absorb its exports.
Agricultural produce is a case in point. India is the world’s largest exporter of rice, a significant supplier of wheat, sugar, and a host of other farm products. Yet access to Chinese and Central Asian markets remains limited due to tariffs, sanitary regulations, and political reluctance. A serious effort within the SCO framework could break these barriers and unlock opportunities for Indian farmers. For China, too, this is not charity but necessity—food security is a strategic concern, and diversifying imports beyond the United States and Latin America fits Beijing’s interests.
Add Russia into this mix, and the geopolitical calculus becomes sharper. Moscow, already estranged from the West due to the Ukraine conflict, is pivoting decisively towards Asia. Energy, defence, and strategic technology partnerships between Russia, India, and China could become the backbone of a new regional order. The SCO, often derided as a “talk shop,” now has the chance to evolve into a serious counterweight to Western-led institutions such as NATO, the G7, or even the IMF-World Bank combine.
Does this mean India is abandoning its ties with the United States? Not necessarily. New Delhi’s strategy is one of multi-alignment, not blind allegiance. It engages Washington in defence and technology while simultaneously working with Moscow and Beijing to build an alternative order. For a country of 1.4 billion, caught in the crosscurrents of global power shifts, pragmatism demands keeping all doors open.
That said, India must tread carefully. The memory of Galwan, the bitterness of Chinese trade practices, and the shadow of the Belt and Road Initiative all demand caution. Cooperation cannot mean capitulation. Mutual respect must be earned and enforced, not taken at face value. If China truly wants to turn a new page, it must demonstrate a willingness to accommodate Indian concerns on both security and trade.
For India, the SCO is not merely about diplomacy—it is about shaping the architecture of a multipolar world. With the U.S. increasingly weaponising tariffs and financial tools to preserve its hegemony, Asian powers have little choice but to build parallel structures that serve their interests. Today’s tentative thaw between India and China is not about sentiment; it is about survival in a global order that punishes the weak and rewards the unified.
Interestingly, China, which has of late become Pakistan’s all-weather friend, also faces a test on cross-border terrorism. This is one area where India and China could find common ground in the fight against global terror. On the opening day of the three-day summit, Beijing as host appeared to have conveniently sidelined Pakistan. If India and China can reach a meeting point, they might together nudge Islamabad to abandon the path it has chosen. For Beijing, it may be wiser to quietly distance itself from Pakistan—even though it remains an SCO member—given that the country’s military establishment seems once again to be drawing it closer to Washington.
The SCO summit, therefore, should be seen as a testing ground. If India, China, and Russia can synchronise their interests—even partially—it could mark the beginning of a genuine alternative to U.S. dominance. If not, the organisation risks becoming another alphabet soup of grand statements and little action. The world is watching.
