Modi, Xi Pledge to Improve Ties Amid U.S. Tariffs, Border Tensions

Shanghai— Indian Prime Minister Narendra Modi and Chinese President Xi Jinping have agreed to enhance bilateral ties and expand trade and investment cooperation during a crucial meeting on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in China. This is Modi’s first visit to China in seven years and comes at a time of growing geopolitical tensions, including recent U.S. tariff hikes on Indian exports.

The meeting between the two leaders takes place amid renewed efforts to reset China-India relations after years of strain, particularly following the deadly 2020 border clashes in the Himalayas. In a significant shift, both sides acknowledged recent progress in creating a “peaceful and stable” atmosphere along their disputed 3,800-km border and agreed not to let border issues define the entirety of their relationship.

“We are committed to progressing our relations based on mutual respect, trust, and sensitivities,” Modi told Xi during their bilateral discussions.

The two leaders discussed expanding common ground on bilateral, regional, and global issues, including counterterrorism and promoting fair trade within multilateral frameworks. Modi emphasized that India and China pursue “strategic autonomy” and their relationship should not be influenced by third-party nations — a likely reference to the United States.

Trade and Investment in Focus

A major focus of the talks was economic cooperation. India expressed concerns over its massive trade deficit with China, which reached a record $99.2 billion this year. Both sides agreed to approach trade expansion with a “political and strategic direction” to help reduce imbalances.

China has recently taken steps to ease restrictions, including lifting export curbs on rare earths, fertilizers, and tunnel boring machinery during a recent visit by Chinese Foreign Minister Wang Yi to India. Direct flights between the two nations, suspended since 2020, are also set to resume.

Xi echoed a more conciliatory tone, stating:

“We must not let the border issue define the overall China-India relationship… If we view each other as partners instead of rivals, our ties can be stable and far-reaching.”

Shared Stance Against Western Pressure

The meeting followed closely on the heels of Washington’s imposition of 50% tariffs on Indian goods due to New Delhi’s continued purchases of Russian oil. Both leaders appeared to signal alignment in resisting what they view as undue Western pressure. Chinese Ambassador to India Xu Feihong recently stated that Beijing “firmly stands with India” against such tariffs.

The SCO summit, attended by leaders from Russia, Central Asia, and the Middle East, served as a platform for Global South solidarity amid global economic and geopolitical shifts. Modi and Xi’s meeting is seen by analysts as an attempt to redefine their bilateral relationship amid a changing international landscape.

Lingering Challenges

Despite recent diplomatic warmth, several long-term tensions remain. The planned Chinese mega-dam in Tibet has sparked Indian fears of potential water flow disruptions in the Brahmaputra River, with government reports warning of up to an 85% reduction in the dry season.

India’s hosting of the Dalai Lama, whom Beijing regards as a separatist threat, continues to be a flashpoint. Meanwhile, China’s unwavering support for Pakistan in defense, diplomacy, and infrastructure also adds friction to India-China ties.

The Road Ahead

While the tone of the Modi-Xi meeting suggests cautious optimism, experts warn the road to a fully normalized relationship remains complex.

“Both India and China are engaged in what is likely to be a lengthy and fraught process of defining a new equilibrium in the relationship,” said Manoj Kewalramani, a specialist in Sino-Indian relations at the Takshashila Institution.

The latest high-level engagement may mark a turning point, but it will require consistent dialogue, transparency, and mutual trust to overcome deep-rooted challenges.

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