The India–China thaw is real, and it is narrower than it looks
Direct flights, visas and rare-earth licences have resumed. The border has not been settled, and the trade deficit has not closed.
Direct flights between India and China resumed on 27 October 2025, after a five-year suspension. Visa restrictions have been relaxed. The Kailash Mansarovar pilgrimage has restarted. In March 2026, New Delhi relaxed investment restrictions by amending Press Note 3, the 2020 rule requiring government approval for investment from countries sharing a land border with India.
Read as a list, it looks like a reset. Read carefully, it is something more limited and more interesting.
What actually changed
The sequence began with the 2024 agreement on border patrolling, which cleared the remaining face-off points at Depsang and Demchok. That disengagement made everything subsequent possible; without it, none of the people-to-people measures would have been politically available to either government.
On trade, China has partially lifted restrictions on exports of tunnel boring machines and fertilisers to India, and has gradually resumed issuing licences for rare-earth magnets to Indian firms.
That last item is the most consequential and the least discussed. Rare-earth magnets are inputs to electric vehicles, wind turbines and electronics. India’s manufacturing ambitions in all three depend on a supply China controls. The licences resuming is not a diplomatic gesture; it is a dependency being managed.
What did not change
The border is not settled. Disengagement at specific points is not de-escalation, and de-escalation is not demarcation. Troop levels along the Line of Actual Control remain substantially elevated relative to 2019, and no agreement addresses the underlying dispute.
The trade imbalance has not narrowed. Nor have the structural roadblocks in the economic relationship.
The framing that fits
Analysts have converged on a similar reading from different directions: that this is pragmatic stabilisation rather than a strategic reset, tactical rather than substantive, a supply-chain truce rather than a realignment.
That is the right frame, and it is not dismissive. A supply-chain truce is valuable. Indian manufacturers need Chinese inputs; Chinese firms want access to the Indian market; neither government wants a border incident during a period when both are managing tariff pressure from Washington. Stabilisation serves both.
What it does not do is change either country’s assessment of the other’s long-term intentions.
What to watch in the next phase
The easy measures have been taken. Advancing further requires addressing the difficult ones: managing and moving toward resolving the boundary, the trade imbalance, and the investment restrictions that remain.
The specific indicator worth tracking is whether Press Note 3 relaxation translates into actual approved Chinese investment in Indian manufacturing, or whether approvals remain scarce in practice. Policy change that does not produce transactions is a signal, not a shift.