The limited hostilities could be confined to a specific section of the border, limited in duration and amenable to a negotiated termination, the Institute for Defence Studies and Analyses (IDSA) said in its report.
Projecting conflict scenarios between the two Asian giants, a report titled 'A Consideration of Sino Indian Conflict' by Ali Ahmed said, "The lower end of the conflict at this level could be a Kargil-like situation. China's aim could be to teach India a lesson so as to influence India's rise before its capacity building underway acquires traction."
The report warned this "could be a limited war confined to a specific section of the border or LAC, limited in duration and amenable to a negotiated termination".
The Kargil hostilities were triggered by infiltration of Pakistani soldiers and Kashmiri militants into positions on the Indian side of the Line of Control (LoC) in 1999.
Ahmed warns at a higher level, China could indulge in a "territorial grab" by entering an area such as Tawang in Arunachal Pradesh.
"At the next rung, it could be a more ambitious bid southwards up to its claim line. Lateral or horizontal expansion of conflict from one theatre to another is the next step, with the conflict engulfing one or more of the four possible theatres -- Ladakh, Central Sector, Sikkim and Arunachal," the report said.
The think-tank said in view of India becoming better prepared in future with its capability-development programmes, it could engage China's "hegemonic attention."
"Since India would be better prepared by then, China may instead wish to set India back now by a preventive war. This means current day preparedness is as essential as preparation for the future," it said.