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This article examines India's China policy in the 1950s with reference to the balance of power theory. Using the logic of internal and external balancing, this article investigates the policy that India followed to contain the China threat. I argue that since Prime Minister Jawaharlal Nehru failed to perceive the China threat, India's policy did not aim at balancing China. In substantiating this argument, I focus upon the perceptions of Nehru, the key Indian policy maker on China, and analyse how his perceptions influenced the actual policy on ground. Studying this period in the bilateral relationship is relevant even today as some of the key issues afflicting the relationship originated during the 1950s.