Here's an interesting take:
Border conflict with China/Pakistan provides an unification force within India. It's this "guys we have to stop fighting amongst ourselves, we are surrounded by enemies" thing. This rally around the flag effect is in effect regardless of weather India win or lose. Indian elites care little for the lives of their low cast foot soldiers and in any event their media can paint a loss into a win. What matters most is there is some sort of 1984-isk conflict at the border when internal unity is threatened.
By de-escalating, China takes this tool away from India, and at a precise moment when India could really use some unifying force.
Border conflict with China/Pakistan provides an unification force within India. It's this "guys we have to stop fighting amongst ourselves, we are surrounded by enemies" thing. This rally around the flag effect is in effect regardless of weather India win or lose. Indian elites care little for the lives of their low cast foot soldiers and in any event their media can paint a loss into a win. What matters most is there is some sort of 1984-isk conflict at the border when internal unity is threatened.
By de-escalating, China takes this tool away from India, and at a precise moment when India could really use some unifying force.