New Delhi: External affairs minister S. Jaishankar on Saturday (August 22) said India has to do business with China while building its own industrial and manufacturing capabilities, as the two countries are working to normalise ties after the four-year-old border stand-off froze relations.“We have to do business with the entire world. That includes China too. But it is important we deal with them confidently,” Jaishankar said at the Economic Times World Leaders Forum.His remarks come ahead of next month’s BRICS summit in New Delhi, where Chinese President Xi Jinping has been invited.If the visit goes ahead, it would be his first trip to India since the informal Mamallapuram summit with Prime Minister Narendra Modi in October 2019. Beijing has not formally confirmed Xi’s attendance, though Chinese foreign ministry spokesperson Mao Ning said last month that China “attaches great importance to and actively participates in BRICS cooperation” and supports India in making the summit a “full success.”Jaishankar said India’s engagement with China was ultimately meant to serve the larger goal of modernising the domestic economy, even as trade and other economic interactions between the two countries continue. “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.Responding to concerns raised by Indian businesses over difficulties in obtaining Chinese business visas, Jaishankar acknowledged the government was aware of the issue and had taken it up with Beijing.”Also read: India Eases Visa Rules for Chinese Professionals in Latest Move to Improve TiesThe minister described the period between 2020 and 2024 as a “particularly bad patch” in India-China relations due to the situation along the border.Ties between the two countries began to stabilise after Modi and Xi met on the sidelines of the BRICS summit in Kazan in October 2024. It had followed an agreement on patrolling arrangements along the Line of Actual Control, which ended the stand-off at eastern Ladakh and moved to restore some diplomatic and economic contacts, including direct flights and border trade.Jaishankar said that if bilateral relations remained stable and became more cooperative, there was scope for greater economic engagement between the two countries, which are both major markets.“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,” he said.He pointed to China’s much earlier and larger-scale industrialisation as a factor that had given it a significant manufacturing advantage, saying India had failed to develop comparable capabilities over several decades.Jaishankar said India had “lost” roughly half a century beginning in the 1960s in developing its industrial and manufacturing base.He framed India’s long-term objective as becoming a more self-reliant, industrialised and manufacturing-driven economy, one capable of competing with China as much as with any other major power. “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,” Jaishankar said.He clarified that this did not mean disengaging from China, but rather building the economic strength to deal with Beijing from a position of confidence.Asked about the India-US strategic partnership and the notion of a US-China “G2”, a framework under which Washington and Beijing are seen as jointly steering global affairs, Jaishankar cautioned against reading too much into the idea, describing the US-China relationship as fundamentally competitive despite pockets 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 US-China relationship, I think at its heart it’s a fundamentally competitive relationship,” he said.Also read: Behind the Pageantry of the Trump-Xi SummitThe term has resurfaced in diplomatic discourse because of President Donald Trump’s own repeated use of it, including in social media posts around his meeting with Xi in Busan in October 2025, when he described it as a “G2 meeting”.Jaishankar added that this competitive character did not mean the US and China would oppose each other on every front, noting that the two countries could cooperate in some areas and remain largely disengaged in others.“But as is often the case, it can also be collaborative in certain matters. It can be indifferent in certain sectors,” Jaishankar said, adding that Washington and Beijing would not necessarily compete “on every issue and every geography, in every time frame. So it’s a very complicated relationship as is natural, you know.”Neighbourhood remains first priorityJaishankar defended the government’s handling of India’s neighbourhood, rejecting the suggestion that New Delhi had “lost the plot” following political changes in Bangladesh, Nepal, the Maldives and Sri Lanka, and amid greater Chinese engagement in the region.He said the political volatility of India’s neighbours had to be understood in the context of their own domestic politics, rather than simply as a measure of India’s diplomatic influence. “I’m very glad you began by saying that this is political criticism,” Jaishankar said, before arguing that political debate often suffered from “amnesia”.He cited a recently released Pew survey which found that 79% of Sri Lankans had a favourable view of India, saying the finding challenged the suggestion that India’s regional influence had been fundamentally eroded.“I cite that to you really to say when you say, you know, you’ve lost the plot, maybe things have gone out of control. Let’s look really what have been the challenges of our neighbourhood,” he said.India’s relations with its smaller neighbours have indeed seen significant turbulence in recent years. Sri Lanka underwent a severe economic and political crisis in 2022, the Maldives elected a government that campaigned on reducing India’s influence in 2023, Nepal has continued to see political changes and tensions over issues including territorial claims, while Bangladesh’s relationship with New Delhi deteriorated sharply after Sheikh Hasina was ousted in August 2024 and fled to India.Jaishankar argued that such tensions were not entirely new and that India’s size itself meant it would inevitably figure prominently in the domestic politics of neighbouring countries.“These are neighbours. These are smaller neighbours of a bigger country, where it is natural that often their politics revolves around us or in some way is related to us,” he said.“And so, therefore, you know, you will never have a situation where people, you know, will not be a part of an agenda of a neighbouring country, good or bad.”He said India’s response should be to build economic stakes and mutual dependence that could provide some stability even when governments change. “The best way of dealing with it is actually, again, as I said, to de-risk it, to create enough cooperation, so that even if there are ups and downs of politics,” he said.He also acknowledged that India’s neighbours would not remain politically static and that New Delhi would have to deal with governments whose interests did not always coincide with its own.“We have to build in the fact that they too have their political processes and change will happen. They’re not going to remain static partners. So some of it may go in a way you like, sometimes it may not, but you handle that,” he said.Bangladesh and Sheikh HasinaThe comments have particular relevance to Bangladesh, where relations with India have remained strained since Hasina’s ouster following the mass protests of 2024. Hasina remains in India, while the government of Tarique Rahman, which took office in February this year, has repeatedly sought her extradition.Dhaka renewed the demand during a meeting between Rahman and India’s high commissioner earlier this month. It has also linked the creation of a “propitious environment” for Rahman’s proposed visit to India to progress on the extradition request.The proposed visit remains uncertain, with Bangladesh saying it is awaiting India’s response on the extradition issue.Also read: With New Delhi Keen on an Early Visit, Bangladesh PM Could Still Visit India Within WeeksAsked specifically about Rahman’s demand for Hasina’s extradition, Jaishankar declined to discuss the substance of India’s conversations with Dhaka.“I’m not going to sit here and discuss what could be or may not be conversations or not between us and a neighbouring country,” he said.But he said India expected bilateral relationships to be based on mutual interests rather than on one side simply accommodating the other’s demands. “What I can tell you is, for any relationship to work, it has to meet the test of mutual interest. You know, it has to work for them, it has to work for us,” Jaishankar said.“I’m also realistic. I’m not expecting neighbours to only do what’s in my interest. There has to be a fair degree of, a reasonable degree of my recognising and respecting what is their interest, just as I expect them also to do so.”“It is when you get that landing point, that common ground, that relationships work smoothly,” he said.Pakistan’s growing Gulf tiesJaishankar was also asked about Pakistan’s growing profile in the Gulf, including the Mecca Joint Defence Agreement signed by Pakistan, Saudi Arabia and Türkiye earlier this month.The August 7 agreement provides that an armed attack against any one of the three countries will be regarded as an attack against all three, although the signatories have described it as defensive and not directed against any particular country.Asked about defence cooperation involving Pakistan, Türkiye and China, he said New Delhi would necessarily factor such developments into its calculations.“Everything which happens on the part of any player who is not well disposed towards me, of course, counts in my calculation,” he said.He added that this did not mean he would publicly disclose how the government was assessing such developments. “But would I then proceed to bare my soul to you and everybody else? Of course, I will not,” he said.Jaishankar also rejected comparisons between India’s position in the Gulf and Pakistan’s, pointing to the unusual breadth of India’s relationships in the region.“How many countries are there who have very good relations with Israel and very good relations with Iran? Not too many,” he said.He also cited India’s large diaspora and maritime interests in the region, with 10 million strong diaspora in Gulf and 325,000 seafarers working on commercial shipping worldwide.“So my calculations are very unique. So I don’t think these kinds of comparisons are really fair. I don’t think they are really relevant,” Jaishankar added.