Developing an Effective Trilateral Partnership

The relationship between India and China is one of Asia’s great paradoxes. The two nations are continental neighbours and civilizational peers, and their bilateral trade in FY 2024-2025 amounted to approximately $128 billion,  signifying a deep economic co-dependence. Yet, this economic reality is built upon a foundation of growing amount of strategic distrust, frozen by the decades-old border dispute which rose to the fore again in the Himalayas in 2020.

Indian scholars have often noted another source of friction as China’s strategic calculus perceives India as a South Asian power, not an emerging global one, leading to a persistent disconnect. These issues are further compounded by fundamental differences in foreign policy; Beijing often segregates political disputes from economic engagement, while New Delhi defines bilateral collaboration more holistically where a secure border is the non-negotiable prerequisite for a healthy economic relationship.

Indian scholars have often noted another source of friction as China’s strategic calculus perceives India as a South Asian power, not an emerging global one, leading to a persistent disconnect.

This Chinese approach is evident even in the US-China dynamic, where massive trade coexists without strategic trust. However, the situation is different with India, as India’s External Affairs Minister S. Jaishankar has emphasized, the relationship“ cannot be normal if the peace and tranquillity in the border are as is disturbed”. This principle, the primacy of the border, makes strategic trust an essential, not optional, ingredient for any meaningful deepening of India-China ties. Without it, the immense economic potential remains capped by political and security risks.

Instead of India and China pursuing a relatively uncertain bilateral relationship, a trilateral framework involving the UAE offers a more stable and pragmatic path forward. This model creates a new geoeconomic architecture where the unique strengths of each nation can be leveraged for mutual gain. India offers its vast and growing market, immense human capital and a rapidly scaling manufacturing base.

In this framework, it would secure access to UAE and Chinese capital along with Chinese technology for its development. China offers its world-class technology, advanced logistics and vast capital reserves. A UAE-based framework would grant it a de-politicized and reliable gateway into the Indian market. The UAE also offers its established neutrality, world- class infrastructure, sophisticated financial centres, and robust legal systems. As an economic hub connecting Asia’s two largest engines of growth, it would further its ambition of being a global nexus for capital and trade.

As an economic hub connecting Asia’s two largest engines of growth, it would further its ambition of being a global nexus for capital and trade.

It is precisely within the China-India deadlock that the UAE emerges as a unique geoeconomic player. Having successfully developed its foreign policy to one of strategic neutrality and business-first pragmatism, the UAE has cultivated deep, trusted and independent relationships with both Asian giants. It is positioned not as a political mediator, but as a geoeconomic guarantor, and its role extends beyond providing capital.

Given its formation of deep strategic and economic alliances with both New Delhi and Beijing, the UAE is uniquely positioned to act as a guarantor of trust. Both India and China have an interest in maintaining their strong relationship with the UAE, so they have a powerful incentive to honour agreements made under its aegis. This structure creates a ‘trust-by-proxy,’ where the UAE’s credibility underwrites the commercial engagement, allowing the two South Asian powers to realize common geoeconomic interests.

This commentary originally appeared in AGDA.