Xi Jinping’s expected visit to Narendra Modi this weekend will be the first since China and India fought deadly border clashes in 2020 and the culmination of years of careful diplomacy aimed at warming relations between the world’s two most populous countries.
The neighbors have been at loggerheads for decades, although their growing importance to the global economy has raised the stakes for both. Relations deteriorated sharply after clashes in the Himalayas left at least 20 Indian soldiers and an unknown number of Chinese soldiers killed and dozens more wounded. Political dialogue has stalled, activity has slowed, and trade and investment have fallen.
Since then, Xi and Modi have taken tentative rapprochement steps at regional forums from Russia to Kyrgyzstan and China last year. But Xi’s trip to the upcoming BRICS summit in New Delhi will be his first trip to India in seven years and shows efforts to put differences aside and demonstrate his global role while the US is mired in conflict with Iran.
“Structural differences and strategic trust deficits in bilateral relations are significant, so multilateral forums such as BRICS provide a platform to address these issues,” said Praveen Donti, senior analyst at Crisis Group.
The two sides, led by officials including Chinese Foreign Minister Wang Yi and Modi advisers including senior security official Ajit Doval and External Affairs Minister S Jaishankar, are gradually moving closer to each other.
This year, leading trade negotiators held their first bilateral meeting since 2019. Soon after, New Delhi allowed two major state-owned companies to purchase critical components from China, lifting restrictions imposed in 2020.
Two-way trade between China and India rose 12.4% last year to a record $155 billion, more than double the $71.6 billion recorded 10 years earlier, according to Chinese customs data. In the first seven months of this year, bilateral trade grew by another 23 percent compared with the same period a year ago.
Investment flows are also growing. Over the past 18 months, Chinese companies in the technology and energy sectors have increasingly expanded capabilities in India, including clean technology developer Envision, Geely-backed engine supplier Horse Powertrain and battery maker CosMX.
In March, the Modi administration decided to relax scrutiny of Chinese investments in the solar energy and electronics sectors. The preliminary change to foreign investment rules means Chinese companies will get automatic permission for non-controlling stakes of up to 10 percent in Indian businesses.
The two countries have agreed in 2024 to resume patrols along their 3,500-kilometer border, which were suspended following clashes in 2020. They also resumed direct flights last year for the first time since 2020, and this year resumed cross-border trade at three Himalayan crossings and jointly organized Hindu and Buddhist pilgrimages to sacred sites in Tibet.
Donty called it a “cautious re-engagement,” returning them to the “regional rivalry disguised as competition and cooperation” dating back decades.
“There has been a thaw in relations, but once you start not trusting a nation… it will take a long time to get things right,” said Amitabh Kant, India’s former emissary to the G20. “This correction is happening now because Prime Minister Modi has spent a lot of political capital on China.”
Brian Wong, a research fellow at the Center for Contemporary China and the World at the University of Hong Kong, said there were certainly “clear and positive signs.”
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The détente also coincided with the tumultuous foreign policy of US President Donald Trump’s second presidency, which has worsened American relations, especially with India, which has sought closer ties with Washington.
Beijing appears to hope that India can be further removed from American influence and also offer China’s slowing economy a large potential market for its companies.
Yong Sun, director of the China program at the Stimson Center, a think tank in Washington, said China believes India is in a period of adjustment due to Trump’s policies, so outreach and efforts to improve ties have been aimed at bringing New Delhi closer.
“China wants to shape India’s strategic choices. It wants India not to see China as a threat. It also wants India not to side with the US by default because of China,” she said.
In an article published by Chinese state media after the latest India-China talks in Beijing, People’s Daily commentator Ding Gang said both sides “acknowledged that US influence has shaped their relationship, a constant, behind-the-scenes presence” but argues that the situation is changing.
“The shadow of the United States, which lingered so palpably in this dialogue so many years ago, is now weakening—not because of diplomatic efforts on both sides, but because of the deeper adjustment now taking place in the international order itself,” he said.
There is still resistance in India to Chinese participation in sensitive sectors, including IT.
Beijing, meanwhile, remains wary of India becoming an alternative to export manufacturing as the country continues its efforts to bolster domestic manufacturing to compete with China, such as wooing Apple to make the iPhone and design and produce semiconductors domestically.
Even though Beijing agreed to New Delhi’s requests during Wang’s visit last year, Indian companies were still struggling to obtain Chinese licenses that would allow them to supply rare earth magnets and industrial equipment, diplomats familiar with the matter said.
Sanchari Ghosh, an Indian foreign policy expert writing for the Lowy Institute think tank, argues that the 2020 clashes have fundamentally changed New Delhi’s view of China.
“India appears to be embracing a form of competitive coexistence,” Ghosh said, “accepting China as a long-term rival while maintaining enough engagement to prevent competition from escalating into endless confrontation.”
Additional reporting by Eleanor Alcott in Beijing
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