The India as a nation cannot afford to ignore the friendship of China as both have a copmmon past of colonial subjugation and both attained freedom almost simaltenously. While China progressed its economy with a levelled development of all strata of the society, Indian development has not parcolated to the down trodden in the country. India spends more on defence out of imaginary fear from a country which is building its economy restricting its defence expenditure. An improved relation with China would help India to reduce its defence expenditure and it may gain from trade relation with China more than it gains from the capitalist countries.