‘We have to do business with China too’: Jaishankar says India can’t ignore Beijing, must become self-reliant

India must do business with the entire world, including China, while building its own industrial and manufacturing strength to compete with major global economies, External Affairs Minister S Jaishankar said at the Economic Times World Leaders Forum.

"We have to do business with the entire world. That includes China too. But it is important we deal with them confidently."

India-China economic ties need stability

Jaishankar said India's engagement with China should be driven by the need to modernise the Indian economy and strengthen domestic capabilities, while acknowledging that trade and other economic interactions between the two countries will continue.


Also Read: ‘Real life has a lot of Test matches’: Jaishankar says diplomacy cannot always be reduced to T20-style quick wins

"But for us, the interaction is the purpose of it is finally to modernise our economy and to develop our capabilities, but even as we do so, obviously there will be trade, there will be other economic interactions with them."

He said India and China had gone through a particularly difficult phase between 2020 and 2024, largely because of the border situation.

"I think we went through a particularly bad patch between the summer of 2020 and the autumn of 2024, and that was primarily an outcome of the situation in the border"

However, Jaishankar said the two countries remain major economies and markets for each other, with economic links through supply chains. He said greater cooperation would be possible if relations remain stable.

"Having said that, I think naturally, if assuming things are stable and the needle is more cooperative, obviously, I mean we are both very big economies in many ways, we are markets to each other. They industrialised much faster, on a much larger scale and much earlier, largely because of many of the policies we now advocate."

India missed decades of industrialisation

Jaishankar said India had missed opportunities to industrialise and deepen manufacturing over several decades and would now have to address those shortcomings.

Also Read: ‘Distrust and diversify’: Jaishankar’s mantra for businesses as global risks reshape supply chains

He pointed to the period beginning in the 1960s, saying India had lost nearly half a century in building manufacturing and industrial capacity.

"We stand our ground as we have stood in the border. We develop our strengths, which unfortunately, as I said, from the 1960s for half a century, we did not do."

"We have to make up for the shortcomings and you know the the mistakes of the past, and and that is really what we are hoping to do."

He said the challenge for India was now to strengthen its domestic economic capabilities while remaining open to international trade and investment.

Stronger India needed to compete with China

Jaishankar said India's long-term objective should be to become more self-reliant, industrialised and manufacturing-driven.

"So I think a stronger, more self-reliant India, a more industrialised India, a more manufacturing India will be able to actually compete with China as it will with other major countries of the world."

Also Read: ET World Leaders Forum 2026: ‘Just in time’ is over, says Jaishankar on why a riskier world needs a ‘just in case’ approach

He stressed that competing with China did not mean disengaging from it. Instead, India would need to develop sufficient economic strength to engage with China from a position of confidence.

India has taken up Chinese visa concerns

Addressing concerns over difficulties faced by Indian businesses in obtaining Chinese business visas, Jaishankar said the government was aware of the issue and had raised it.

"So, in seeing those stories about business visa issues, which our businessmen have been facing, yes, we have seen it, and I want to say, I mean, for those of you who may have an interest or who may have been affected, we have taken it up as well."

The minister said economic engagement would remain part of the broader India-China relationship, even as New Delhi works to strengthen its own capabilities.

India, China have interest in stable ties

At the political and strategic level, Jaishankar said both India and China have an interest in maintaining a stable relationship.

"I would also say, at a political level, at a strategic level, they, you know, it's both of us have an interest in maintaining a certain, you know, I would say stable relationship here."

His comments come against the backdrop of the prolonged tensions between the two countries following the 2020 border crisis, even as efforts have been made to stabilise bilateral ties.

Jaishankar cautions against US-China G2 narrative

Jaishankar was also asked about the India-US strategic partnership and the idea of a US-China G2, a concept that envisages Washington and Beijing playing a dominant role in global affairs.

He cautioned against viewing the US-China relationship through that framework, saying the relationship remains fundamentally competitive despite areas of cooperation.

"I think people use that term. I would advise you to treat it with some caution, because the fact is, if you look at the U.S.-China relationship, I think at its heart it's a fundamentally competitive relationship."

US and China can cooperate despite competition

Jaishankar said the competitive nature of the US-China relationship does not mean the two countries will oppose each other on every issue.

He said there could be areas where Washington and Beijing cooperate, as well as sectors where they may simply have little direct interaction.

"But as is often the case, it can also be collaborative in certain matters. It can be indifferent in certain sectors."

He added that the US and China would not necessarily compete on every issue, in every geography or at every point in time.

"So it is not that they will compete on every issue and every geography and every time flight."