Tibet is a key factor in India-China relations. It is only after the 1950 Chinese occupation of Tibet that India and China came to share the now disputed common border. In recent years, China’s military buildup and infrastructure development in Tibet, as well as reported plans to divert or dam rivers that rise in Tibet and flow into India, have raised India’s anxieties. Conversely, China’s insecurity about Tibet is an important driver of its approach toward India. India has been unable to assuage China’s fears about its possible use of the presence of the Dalai Lama in India and its large Tibetan refugee population of about 120,000 to create trouble for China in Tibet. The presence of the Dalai Lama and a large community of Tibetan refugees in India has kept the “Tibetan question” alive. Given India’s open democratic system and long tradition of giving refuge to persecuted peoples, India will find it politically impossible to meet China’s expectations on the Tibet question without a significant quid pro quo. The breakdown of talks between the Chinese government and representatives of the Dalai Lama does not augur well for the future, and a post-Dalai Lama situation could become much more complicated. Of late, China’s aggressive territorial claims on India, the deepening of the China-Pakistan alliance and a shift in China’s position on Kashmir has led to a hardening of India’s position on Tibet. India is now seeking satisfaction on what it considers to be the core issues relating to India’s sovereignty and territorial integrity. India-China relations are unlikely to be on an even keel until this tangled knot is unraveled.