August 31, 2025

India's Prime Minister Narendra Modi is all set to visit China this weekend, and the timing couldn't be spicier! Just days ago, the US decided to hike tariffs to a whopping 50% on Indian goods like diamonds and shrimp. This move, explained by US President Donald Trump, is a punishment for India's ongoing purchase of Russian oil. Experts warn this could hurt India's booming export sector and its big dreams for growth. Meanwhile, China's leader Xi Jinping is battling a slowing economy, with US tariffs also casting a shadow on his grand ambitions. So, both leaders might just be looking for a fresh start in their chilly relationship, which has been full of mistrust, mostly due to border fights. Chietigj Bajpaee and Yu Jie from Chatham House say, "Put simply, what happens in this relationship matters to the rest of the world." They add that India's trip marks a "potential turning point." Why? Because India and China are giants in the global economy – fifth and second largest respectively – and their cooperation could shake up the world. India’s economy is projected to grow over 6% and may become the third largest by 2028, with its stock market hitting $5 trillion. Beijing-based Qian Liu of Wusawa Advisory says, "While the world has traditionally focused on US-China ties, it is time we shift more focus on how China and India can work together." But it’s not all sunshine. The two countries have a long, painful border dispute. The worst conflict in 40 years erupted in 2020 in Ladakh’s Galwan Valley. After that, direct flights were stopped, Chinese investments slowed, and India banned over 200 Chinese apps including TikTok. Antoine Levesques from IISS says, "Dialogue will be needed to better manage expectations of other powers who see India-China as key to Asia's stability." Other hot spots include issues like Tibet, the Dalai Lama, and water disputes over China’s mega hydroelectric project on a shared river. Also, tensions with Pakistan, which is friendly with China, complicate matters. Priyanka Kishore, an economist at Asia Decoded, is cautious: "I would be surprised if a BYD factory is coming to India, but there may be some soft wins." Already, it's announced that direct flights will resume, visas may be easier, and there could be fresh economic deals. Ms. Kishore calls the relationship “an uncomfortable alliance.” She explains, "Remember at one point, the US and India were coming together to balance China. But India is perplexed with the US and its position. So it's a smart move – and feeds into the multipolar narrative that both India and China believe in." Modi will attend the Shanghai Cooperation Organisation (SCO) summit, a group including China, India, Iran, and Russia, aimed at offering a new global perspective beyond the West. India has not always valued the SCO, and recent meetings have had issues, like India objecting to silence over a deadly attack in Kashmir. But, as India’s relations with Washington cool, the SCO’s importance rises. China also values showing Global South unity, especially with US tariff headaches. India and China are also part of BRICS, a group drawing US ire with tariff threats. Modi last met Xi and Russia's Putin at the BRICS summit in late 2024. Russian officials hope for new talks soon. Bajpaee and Yu say the trio could blend China’s factories, India’s services, and Russia’s resources to reduce reliance on the US and reshape world trade. On the way to China, Modi stopped in Japan, highlighting Delhi’s wider regional partnerships. Ms. Kishore notes, "Asean and Japan would welcome closer China-India ties. It helps with supply chains and the idea of 'Make in Asia for Asia.'" How might India and China team up economically? India depends on China for many factory parts and raw materials, hoping for lower import taxes. India's strict rules have slowed shifts from China to Southeast Asia so far. Ms. Kishore says there's strong partnership potential, especially if India makes more electronics, complementing China, not competing. She adds, "Faster visa approvals would be easy wins for China. They want market access in India because their options like the US and ASEAN are shrinking, and many Chinese apps are banned. Beijing would welcome selling to 1.45 billion people." Of course, one meeting won't fix everything. The path to better India-China ties is long and winding. But Modi’s visit may soften old wounds and send a big message to Washington: India has options. The plot thickens in this great game of global power and economy!

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Tags: India-china relations, Us tariffs, Modi visit, China economy, Trade tensions, Sco summit,