This is another Asian capital, another handshake between S. Jaishankar and Wang Yi and yet another rehash of the same sentence that has been repeated in Astana, Moscow, Rio, Johannesburg, Beijing and in Manila this week. Peace on the border is at all times the price of any normal India-China relationship. The statement comes from the external affairs minister at the sidelines of the East Asia Summit and ASEAN Regional Forum, and it is nothing new. A Chinese foreign minister is holding a tense conversation with Washington in the same city, and an Indian economy that's finding out just how far-reaching its reliance on Chinese inputs is.

The tone of Jaishankar's inaugural remarks in Manila was no different from what he had often done in the past. He also reminded Wang that ties between the two countries have been "gradually normalising" since the heads of the two countries met in October 2024 in the Russian city of Kazan, a development he said was “reaffirmed” by the meeting between Modi and Xi Jinping in the Chinese city of Tianjin last August. Then, and there, he raised the topics that truly concern India's industry: access to market, a trade imbalance which has become one of the largest in the world, and the uncertainty of supply chains that Beijing can choke any time it likes.

The final one warrants more attention than is usually lavished on it in the diplomatic write-ups. Trade deficit with China has reached symbolic $100 billion mark in the previous financial year and by some estimates is approaching $106-116 billion, whichever of the two numbers you believe the figures provided by the commerce ministry or an independent think-tank. Finally, the import from China has increased from about $88 billion in 2021 to well over $120 billion this year, whereas exports to China have not budged from the $15-17 billion level for the past five years. Almost 80% of the inflow from China is limited to only four categories electronics, machinery, organic chemicals and plastics, all the inputs which Indian manufacturing has not been able to replace despite the years of talk about self-reliance. The government scheme for incentivizing domestic manufacturing, announced as a key measure to cut down imports, has only attracted just over ₹2 lakh crore of investment since its inception in 2020.

Then there are the rare earths troubles, which have become a serious point of contention. Last year, Beijing tightened up export restrictions on components such as terbium and dysprosium, having Indian auto majors publicly state that they would see production bottlenecks in weeks. India relies on China for more than 90 percent of its rare earth magnets, which are used in India's electric vehicle and electronics industries, and a new string of export regulations by China's commerce ministry in October required product licensing for products even if they included a small amount of Chinese-origin material. It is not an abstract irritant for an economy that is trying to ramp up capacity for semiconductors and EVs from the ground up; it's a chokepoint Beijing has shown it's prepared to employ.

This is the context in which the border language has to be understood. It is simple and much in vogue today to talk about the past eighteen months as a thaw resumed direct flights, reopened pilgrimage routes to Kailash Mansarovar, restored tourist visas, and the deployment of troops along LAC which brought an end to the Ladakh standoff. Of course, all of that is true, and worthy of recognition. However, a more levelheaded perspective, broadly held by those who closely follow the relationship between the two, is that none of it represents a fundamental rebalancing. The arrangements for the border do not constitute a settlement but confidence-building measures. China has not backed down from its military presence in the Indian Ocean. It has yet to cool with Pakistan. Nor has much changed in the fundamental asymmetry between an economy like India's, which is far from being ready to treat New Delhi as an equal and not as a target in its larger contest with Washington. In general, Indian strategic planners have not been interested in changing the paradigm and the engagement with Beijing has been one of the tactics they have adopted. And there is not much in Manila that would shift that perception.

The regional theatre just can't help but emphasize it. The same week, a meeting widely interpreted as reaching a resolution for a potential meeting between Trump and Xi, Wang Yi was due to meet US Secretary of State Marco Rubio, having just told the secretary-general of ASEAN that Manila's own security establishment had "deliberately" provoked incidents in the South China Sea. India is in fact having a conversation with China, which is taking place within a far bigger conversation in the Indo-Pacific, where Washington, Beijing and the ASEAN capitals are all making realignment. New Delhi's policy of “strategic autonomy” how it engages China on the economic and diplomatic fronts while simultaneously taking a hard stance on China's border actions seems more like a wise strategy for a nation that must rely on the Chinese for its current infrastructure needs and on the Chinese as a buffer on the border tomorrow, rather than a state of indecision.

What comes out of Manila is not a breakthrough, but a conversation about maintenance, which is needed, low-risk and almost non-surprising. Presumably, the next round of military talks will take place, the trade issues will be "noted," and the two ministers will repeat this scene in whichever city hosts the next multilateral meeting. Its test will not be in the communiqués' but whether the export licenses relax, the deficit shrinks and the patrols on the LAC remain uneventful long enough not to have to mention peace as a condition at all.Here is a chart to go with it that shows how India's trade deficit with China has actually expanded over the last few years:India's trade deficit with China has been widening in reality, and as the figures indicate, it has crossed $120 billion mark while exports are still hovering around $15-18 billion, Manila's polite language hides.