China’s decision to block Pakistani Masood Azhar’s designation as a terrorist at the UN yet again is likely to test the limits of the tactical ‘reset’ in Sino-Indian relations in place since the Wuhan summit between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi in April last year. Another recent, if low-key, development has the potential to set the tone for the future of the relationship between the two countries. The Dalai Lama, the spiritual leader of the Tibetan community, has thrown a spanner in the works by saying that his next reincarnation, who will be the 15th Dalai Lama, could ‘come from India’.

Unsurprisingly, the Chinese government has rejected this statement and insists that the Dalai Lama’s reincarnation ‘must follow Chinese law’. India has provided sanctuary to thousands of Tibetan refugees including the current Dalai Lama since 1959, something that’s a major thorn in Sino-Indian relations, even though India maintains that it doesn’t challenge Beijing’s sovereignty over Tibet.

The Panchen Lama is an important Tibetan spiritual figure whose duties include anointing the Dalai Lama. In 1995, China kidnapped and imprisoned the 11th Panchen Lama (when he was six years old) days after he was appointed by the current Dalai Lama and his whereabouts are unknown. China has nominated its own Panchen Lama and will undoubtedly anoint someone as a Dalai Lama in due course.

In an interview in India, the Dalai Lama recently remarked, ‘In future, in case you see two Dalai Lamas come, one from here, in free country, one chosen by the Chinese, then nobody will trust, nobody will respect [the one chosen by China].’ Until now, the Dalai Lama has been vacillating on the question of his reincarnation (saying it might not happen), but his latest statement complicates things. Two years ago, in a move that could assist the next Dalai Lama, India started allowing Tibetan refugees (though they are officially called ‘foreigners’ in India) to apply for Indian passports.

That the Tibetan government in exile in India is likely to nominate a Dalai Lama was made clear in an interview given last year by the prime minister in exile, Lobsang Sangay. The candidate chosen by the Tibetans is likely to enjoy far more legitimacy than one China nominates. This could mean that the next Dalai Lama is an Indian citizen or a Tibetan refugee in India.

The nomination of the next Dalai Lama is significant to China because the figure is greatly revered by Tibetans globally and because Tibet is one of the restive ‘separatist’ provinces that Beijing has been trying to assert control over since the 1950s. Tibet is one of the ‘three Ts’ that modern-day China is most sensitive about (the other two are Taiwan and Tiananmen).

The ethnically, linguistically and culturally distinct region of Tibet had over centuries existed as an autonomous kingdom under the suzerainty of Chinese emperors, but asserted its independence in the early 20th century. The newly formed Chinese government under Chairman Mao, however, refused to recognise Tibet’s independence and invaded it in 1950 and tried to seek a cooperative arrangement with the political and spiritual head of the Tibetan state, the Dalai Lama. Brutal Chinese policies and fear of assassination forced the Dalai Lama to flee to India in 1959. Beijing’s suspicions about what it feared were Indian designs on Tibet are thought to be the ‘principal reasons’ for China’s surprise invasion of India in 1962, in which India was badly humiliated.

China has been reacting sharply to visits by Indian leaders to the Indian state of Arunachal Pradesh—which Beijing calls ‘South Tibet’—for several years now. During Modi’s last visit to the state, Chinese Communist Party mouthpiece the Global Times published an editorial attacking Modi for trying to change the demographics of South Tibet and make the population more ‘“Indianized”’.

The emergence of two claimants to the Dalai Lama’s position, one nominated by the CCP and the other possibly an Indian citizen nominated by the Tibetan government in exile, would add a major irritant to China–India relations. The notion presents an interesting conundrum and underscores the distinction between an authoritarian China and a democratic India, and highlights Tibetans’ aspirations for a more a free political system. The emergence of a Dalai Lama in India could cause disquiet among the six million Tibetans living in China, and potentially galvanise their quest for separatism.

In the last couple of years, India has been generally cautious about not stirring up Chinese sensitivities on Tibet (except where Arunachal Pradesh is concerned), in keeping with the spirit of the so-called reset. Last year, for example, the Indian government instructed its ministers and officials to stay away from a major interfaith meeting organised by the Tibetan administration as part of its ‘Thank you India’ campaign. The event, which was originally meant to be held in New Delhi, was moved to the seat of the Tibetan government in exile, Dharamshala.

India’s response to China’s protection of Azhar at the UN is being criticised as weak. A growing number of Indian analysts say that India should seek other ways to bargain with or even ‘punish’ China for consistently trampling Indian interests.

India could play the ‘Tibet card’ with China, including by using ambiguous language on Tibet’s status, issuing stapled visas for Tibetans—as China does for Indian citizens from Kashmir and Arunachal Pradesh—and ramping up engagement with the Tibetan government in exile. If it were so inclined, India could choose to press the Dalai Lama issue and use it as a lever to extract bargains from Beijing like a favourable decision on Azhar’s status at the UN. However, going by recent trends, New Delhi is likely to distance itself from the Dalai Lama’s statement.

India would do well to realise that the Tibet issue is far more important to the CCP than China’s ‘all-weather’ relationship with Pakistan; for China, protecting Azhar at the UN isn’t as important as keeping Tibet under control. This offers some much-needed space for a serious discussion on core interests between New Delhi and Beijing.