Reset or Stopgap?

During the meeting, Xi said that China and India are each others’ development opportunities rather than a threat. Stressing that both countries are key members of the Global South, Xi said the two countries need to view and handle their relationship from a strategic and long-term perspective and should achieve a “cooperative pas de deux of the dragon and the elephant.” 

　

Xi called on the two countries to work together for a multi-polar world and greater democracy in international relations, and to make due contributions to peace and prosperity in Asia and the wider world. 　

Modi agreed, saying that  India and China are “partners, not rivals,” and that their differences should not turn into disputes. Pledging that India is ready to develop bilateral ties with a long-term perspective, Modi stressed that India and China are pursuing strategic autonomy, and their relations should not be seen through the lens of a third country. 　

Modi announced that the two countries will resume direct flights after more than five years, though he did not provide details on when the flights will start. 　

The talks, their first formal engagement since October 2019, mark a significant step toward resetting ties strained by years of border tensions and geopolitical rivalry. 　

Coming against the backdrop of US President Donald Trump’s escalating tariff policies and on the sidelines of a major platform for Global South members to enhance their voices, the meeting carries implications well beyond the bilateral agenda. 　

Modi’s last visit to China in 2018 was also on the sidelines of an SCO summit, and his last meeting with Xi was held in October 2024 on the sidelines of the BRICS summit held in Khazakstan. 　

Analysts believe that his latest trip sends a positive message about closer collaboration between the two countries and among Global South countries. 　

Mechanisms such as the SCO and BRICS represent the Global South’s efforts to build a fairer and more equitable international order, according to Qian Feng, a researcher at the National Strategy Institute of Tsinghua University. 　

He told the China News Service that closer coordination between China and India within these frameworks would enhance the collective strength and solidarity of the Global South. 

Immediately after the border clash, India imposed stringent restrictions on Chinese investment and banned some 60 Chinese apps, including TikTok, owned by ByteDance, and Tencent’s WeChat. Starting in 2022, Indian authorities launched extensive investigations against Chinese companies operating in India, including smartphone makers Huawei, Vivo and Oppo, and automakers BYD and Great Wall Motor, citing alleged tax violations. 　

India also tightened visas for Chinese nationals for all purposes. Direct flights between the two countries, suspended in 2020 during the pandemic, remained halted. While China resumed issuing tourist visas to Indian nationals in March 2023 after the pandemic, India continued its visa freeze. 　

However, signs slowly emerged in recent months that both sides were seeking to restore political trust. In October, 2024, Xi and Modi held their first formal talks since 2019 on the sidelines of the BRICS summit in Kazakhstan. Highlighting the importance of bilateral relations, the two leaders agreed to step up dialogues to resolve relevant issues. 　

In April, China announced it will allow  Indian pilgrims to travel to holy sites in China’s Xizang Autonomous Region for the first time in five years, and in July, India resumed issuing tourist visas to Chinese nationals. 　

During a keynote visit to India by Chinese Foreign Minister Wang Yi on August 19, which paved the way for the Xi-Modi meeting two weeks later, the two sides agreed on a 10-point consensus, including stepping up diplomatic mechanisms to maintain peace in border regions, enhancing trans-border river cooperation and reopening traditional border markets. 　

The Tianjin Summit, which built upon a string of interactions, indicates both countries want to institutionalize dispute management rather than allow episodic crises to dominate the agenda. By endorsing the idea that China and India are “development partners, not rivals,” the two sides are widely thought to have sent a clear message that the world’s two most populous countries have entered a new and more pragmatic phase of engagement. 

According to data released by the Reserve Bank of India (RBI) in May, India witnessed a sharp 96.5 percent drop in net foreign direct investment (FDI) in the 2024-2025 fiscal year that ended in March, with net FDI falling to just US$353 million from US$10 billion in the previous fiscal year, the lowest on record. 　

“Although India has long promoted ‘Made in India’ and a strategy of decoupling from China, the economic data reveals the economy’s underlying vulnerabilities,” wrote Xie Chao, an associate professor at the Institute of International Studies, Fudan University in an August 31 commentary posted to a WeChat account run by Chinese media outlet guancha.cn. 　

Highlighting that the manufacturing sector only accounts for about 14 percent of India’s GDP, Xie argued that India’s economic growth relies more on government spending and financial expansion, and lacks strong employment growth. In the meantime, India has found that its economic development remains heavily dependent on China’s supply chain. Data released by the Indian government showed that India’s trade deficit with China surged to US$99.1 billion in the 2024-2025 fiscal year, more than double the figure from four years ago. 　

“The Modi government’s efforts to normalize relations with China are a pragmatic move aimed at alleviating domestic industrial pressures and stabilizing supply chains,” Xie added. 

India has long been considered a natural ally of the US due to similar political systems, shared geopolitical interests and concerns over China’s rise. For more than a decade, spanning the Obama administration, Trump’s first term and the Biden administration, India has been a key member of the Quadrilateral Security Dialogue (Quad), which also includes the US, Japan and Australia, and is a key partner of Washington’s Indo-Pacific strategy. Both initiatives are widely seen as targeting China’s regional influence. 　

This status has enabled India to simultaneously maintain a close relationship with Russia and largely escape the brunt of Western sanctions for its massive purchases of Russian oil following the breakout of the Russia-Ukraine conflict in 2022. 　

After Trump returned to the White House in January, India quickly moved to engage with the new US administration, with Modi among the first foreign leaders to visit Washington. Announcing the “Mission 500” to boost bilateral trade to US$500 billion by 2030, Modi pledged to advance a series of trade proposals largely in line with US demands. 　

When Trump imposed sweeping “reciprocal tariffs” worldwide in early April, raising tariffs on Chinese products as high as 145 percent, many in India saw a potential opportunity. While initiating trade negotiations with the US, Indian officials noticeably escalated their criticism of China. 　

On April 7, Indian Minister of Commerce and Industry Piyush Goyal publicly claimed that China’s growth has fueled unfair trade practices. On April 11, Goyol attributed China’s joining the WTO as a root cause of the current global trade crisis, while calling US tariff policies a “great opportunity” to reset US-India trade ties. 　

However, the initial optimism faded rapidly. While the US and China soon reached a framework agreement to roll back reciprocal tariffs, India’s negotiations with the US stalled, as New Delhi refused to yield in the agricultural and dairy sectors. 　

Trump’s insistence that his threat of tariff hikes forced India and Pakistan to stop their brief conflict in May, along with his apparent olive branch toward Pakistan by hosting Army Chief Asim Munir in Washington in June, led to further tensions. 　

Eventually, US-India trade negotiations collapsed, and Trump decided to hit India with 50 percent tariffs, including 25 percent reciprocal tariffs and 25 percent tariffs for its purchases of Russian oil. 　

“The abrupt turn in US policy toward India caught many in New Delhi off guard,” Professor Lin Minwang, vice dean of the Institute of International Studies at Fudan University, told NewsChina. 　

“For years, India’s strategic community assumed that a tough line on China would ensure US goodwill and flexibility toward India,” Lin added. “Under Trump’s second term, that assumption no longer appears to hold, prompting India to recalculate its strategies to adopt a more pragmatic approach towards China.” 

During the SCO summit, Modi continued to refuse to endorse China’s ambitious Belt and Road Initiative (BRI), making India the only SCO member to withhold support. During a plenary session of the SCO summit, Modi said that connectivity should always respect sovereignty and territorial integrity and that connectivity that bypasses sovereignty loses trust and meaning, which was considered as a veiled criticism of the BRI. 　

Instead, India is promoting its own regional infrastructure initiative. “That is why we are working on Chabahar and the International North-South Economic Corridor, which will enhance connectivity to Afghanistan and Central Asia,” Modi said. 　

Modi is also the sole SCO summit attendee who skipped China’s Victory Day parade held immediately after the SCO summit on September 3. 　

Moreover, in the run-up to the XiModi meeting, Indian and Chinese diplomats exchanged remarks regarding India’s stance on the Taiwan question, a core concern for China. 　

According to the statement China released, during his meeting with Wang Yi in India, Indian External Affairs Minister S. Jaishankar noted that Taiwan is part of China. India last affirmed the one-China policy in its 2008 joint communiqué with Beijing, and has not repeated the phrase in any statement since. The readout released by China was widely reported to have filled a 17-year gap. 　

However, India swiftly clarified that Jaishankar had been misquoted and there was no change in its position on the island of Taiwan, though it did not clarify what its stance is. In response, Chinese Foreign Ministry spokesperson Mao Ning said at a regular press conference on August 21 that the Indian side’s “clarification” came as a surprise, which she said was “inconsistent with the facts.” 　

“It would seem that some people in India have tried to undermine China’s sovereignty on the Taiwan question and impede the improvement of China-India relations,” Mao said. 

“Deeply appreciate and fully reciprocate President Trump’s sentiments and positive assessment of our ties,” Modi responded in a statement posted on X the following day, adding that India and the US “have a very positive and forward-looking comprehensive and global strategic partnership.” 　

It remains unclear how US-India relations will unfold in the following months. Several planned trips involving senior officials were canceled due to trade frictions, including a visit in late August by a US trade delegation to India. 　

On India’s part, a plan for Indian Defense Minister Rajnath Singh to visit Washington in August over military cooperation and procurement was canceled. 　

Modi has also opted not to travel to New York to attend the high-level session of the United Nations General Assembly in September 2025. Meanwhile, US media reported that Trump “no longer plans” to visit India for the Quad Summit later this year. 　

Trump indicated in a statement posted on his Truth Social on September 9 that the US would continue to negotiate with India to reach a deal. “I look forward to speaking with my very good friend, Prime Minister Modi, in the upcoming weeks. I feel certain that there will be no difficulty in coming to a successful conclusion for both of our Great Countries!” said Trump. 　

Professor Xie warned that as India continues to adopt a balancing strategy, New Delhi may once again shift toward the US if Washington makes some concessions. 　

Xie pointed out that US-India military cooperation, covering equipment, intelligence sharing and semiconductors, is still at an all-time high, which means Washington still has significant sway over India’s strategic decisions. 　

“Although India projects an image of strategic autonomy, the US still holds various forms of leverage over India’s foreign policy, with tariff pressure being just one of them,” Xie said. 　

Xie’s view is shared by Professor Lin. “It is encouraging that China-India relations are recovering, but whether the vision of the ‘Dragon and Elephant dancing together’ can be realized is highly uncertain given India’s apparent focus on short-term tactical gains rather than long-term strategic objectives,” Lin said. 　

“Only when India changes its perception and embraces a long-term mindset can China-India relations achieve lasting stability,” Lin added.