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India and China have moved closer to a complex relationship with their 2020 border conflict, as the growing tariff promotes an environment for the reconstruction of the crims and supply chains.
Prime Minister Narendra Modi met Chinese President Xi Jinping in Tianjin, in Northern neighbor’s first visit from 2018 on Sunday. The two leaders emphasized the need to expand business and investment relations with a political and strategic vision, addressing the concerns of New Delhi over their trade deficit with Beijing.
According to a statement issued by the Prime Minister’s Office, Modi and Xi also pointed out the role of their economies in stabilizing global commerce, as the leaders of the Shanghai Cooperation Organization (SCO) met Beijing in Port City on a few hours drive. Modi said that both India and China chase strategic autonomy, and that their relationship should not be seen through the prism of the third country.
Modi’s visit takes place at a time when two Asian giants face tariffs standing from Washington. Last week, the United States extended the tariff on India by 50%, citing Russia’s relation to India, which defends New Delhi. Meanwhile, trade talks with the US are limited.
The SCO was established in 2001 by China, Russia and four Central Asian countries. The primary objective of the group is to address regional security threats, while also promoting economic and cultural cooperation among its members.
The leaders agreed to promote people’s exchange of people, including direct flights, visa facilities and re-starting Kailash Mansarovar Yatra. Modi also expressed support for China’s SCO Presidency and invited XI to attend the BRICS summit in India in 2026. Xi thanked him for the invitation and assured his support for the presidency of India.
Tianjin talks come against the background of New Delhi, which weighs easy rules for Chinese investment in select areas. India is considering exemption of curb levied in 2020, which proposes to allow 20-25% Chinese investment through automatic route in areas such as manufacturing, renewable energy and auto components, Mint Informed on 18 August. In turn, India is demanding more market access to its goods in China, especially in areas such as pharmaceuticals, IT services and agriculture. India’s trade deficit with China reached around $ 100 billion in FY 25 as imports increased to $ 113.45 billion, while exports were $ 14.25 billion.
“International situation is both liquid and chaotic,” Xi said PTI Video of the meeting. This is right for China and India “There are friends who have good neighbors and cordial relations, companions who enable each other’s success, and keep the dragon and elephant dances together,” he said.
The two leaders agreed that cooperation between their 2.8 billion people is necessary for global development, but also admitted that the differences should not be allowed to be converted into controversies. He insisted that it was important for the construction of the sustainable trust, addressing the economic imbalance along with the expansion of investment.
While the trade formed the center of discussion, Modi reiterated that there was a condition for continuous progress in peace and peace relations with the border. The leaders welcomed the successful disintegration achieved last year and promised to work towards the continuous calm, a fair and mutually acceptable border disposal with the line of real control (LOC). He supported the decisions made by his special representatives earlier this month and promised to further support that process.
Xi said that India should not allow border issues to define their relationship, A Bloomberg The report said, quoting Chinese news agency XinhuaAdding that the “right choice” is to be a friend. Xi said, “As long as the two countries remain partners instead of rivals, and see each other as development opportunities rather than threats, China-India will flourish and continuously move forward,” Xi said.
On the issue of American tariffs, Foreign Secretary Vikram Misri said in Tianjin, “The two leaders reviewed the international economic situation and accepted the challenges arising from the current global development. The attention of their discussion remained on the domain, however, remained on the bilateral domain. He discovered ways to take advantage of these global changes.
On a question about the two leaders who discussed multilateral cooperation to protect common interests, Misri said that understanding was compulsorily associated with the need to improve global trade and financial institutions.
He pointed to deficiencies in the United Nations System along with a decrease in the functioning of the World Trade Organization and multilateral financial architecture. Given that both India and China are prominent players of global economic and commercial places, it was naturally seen for them to understand more and more on strengthening these institutions, which basically address such issues.
Modi will hold a bilateral meeting with Russian President Vladimir Putin on Monday, said Misri said.
In a separate meeting with CAI QE, a member of a senior Polit Bureau Standing Committee, Modi shared his vision for bilateral relations and sought support in implementing the consensus at the leadership level. The CAI expressed Chinese readiness to expand exchanges and strengthen cooperation, according to the PMO’s statement.
Experts noted that India’s push to reduce the trade deficit reflects growing pressure at home to secure more equitable words of engagement, even both sides share projects on multilateral forums.
“Discussion in Tianjin suggests that New Delhi is demanding to balance his call for more business access with its insistence on border stability, while Beijing has indicated openness to re-linking the relationship after years,” said the Delhi-based think tank, a business policy expert for social development, Biswajit Dhar said.
India banned Chinese investments in 2020 after a deadly conflict between soldiers of the two countries in the Galvan Valley of Ladakh. Nevertheless, trade continued to grow as India depends on its neighbor which is for the import of drug raw materials in electronic parts. India’s import from China increased from $ 94.57 billion in FY 222 to $ 113.45 billion in FY 25. In contrast, the export financial year 222 to China declined from $ 21.26 billion to $ 14.25 billion in FY 25.
Inbound shipment from China during April -Zulai 2025 with $ 40.66 billion, from a year ago up to 13.1%. Exports to China rose by 20% to $ 5.76 billion during this period.
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