I share your pessimism in this regard CD. Looking at the way the things are going (even the recent back and forth's here in the forum) I doubt there is going to be any groundbreaking improvement in relations.
At the same time; I don't think there will be a shooting war anytime in the near future...not only would it make zero economic sense for the two growing nations; but would also make zero military sense due to insurmountable geographical problems.
we will just see the status quo being maintained, while the globe tries to jockey for position around centers/conglomerates of power...in other words; a multi polar world.
I predict the UN becoming less and less powerful as more NATO-like alliances gain prominence. We might even see yet another League of Nations in the making unless there is considerable reform.
In the future India would align itself with America and Japan more and more while trying to maintain a semblance of neutrality to the outside, and I foresee China doing something similar with its Allied nations. I wonder what would become of the EU...they might even side with the Americans or maybe a future association with an ascendant Russia(they have huge natural Gas reserves in Siberia). While this might seem to be a rehash of the usual line of thought regarding these nations; I really do not see much evidence to root for a contrary opinion. While some might see India's friendship with America and Japan as a form of Neo Colonialism, I would beg to differ; as I believe India is astute enough not to be a conjoined twin of the US. One could term it a coalition of the similarly inclined. lol