India and China are taking steps to reset their strained relationship, with both nations signaling greater cooperation in trade, border management, and resource security. The recent visit of Chinese Foreign Minister Wang Yi to India has opened a new chapter in dialogue, even as the backdrop of US tariff pressure on Indian goods accelerates the incentive for closer bilateral ties.
A Diplomatic Reset
During his 18–19 August visit, Wang Yi held key meetings with Prime Minister Narendra Modi, National Security Adviser Ajit Doval, and Foreign Minister S. Jaishankar. The discussions revolved around resuming direct flights between India and China, reopening traditional border trade routes at Lipulekh, Shipki La, and Nathu La, and easing tensions along disputed frontiers through patrol coordination and troop drawdowns. On 21 August, Chinese Ambassador Xu Feihong reinforced Beijing’s position by expressing support for a multilateral trading system with India and by sharply criticizing the United States’ decision to impose a 50% tariff on Indian goods.
The Background of Strained Relations
India–China ties have long been overshadowed by conflict and mistrust. The 2020 Galwan Valley clashes marked a low point in relations, and renewed tensions surfaced again in May 2025, when Beijing supplied weapons to Pakistan during a cross-border escalation with India. Despite these setbacks, shifting global dynamics have created room for cautious engagement. The imposition of steep US tariffs on Indian goods—linked to India’s purchase of Russian energy—appears to have accelerated New Delhi’s willingness to explore deeper cooperation with Beijing. This recalibration follows the October 2024 BRICS summit, where Modi and Xi Jinping had already begun the process of reopening lines of dialogue.
Key Areas of Progress
One of the most visible steps toward normalization has been the resumption of direct flights, journalist visas, and border trading posts. These measures not only encourage people-to-people contact but also restore long-standing commercial flows. On the security front, the two sides agreed to a new framework for patrol coordination and partial drawdowns along sensitive border areas. While this signals progress, India remains cautious, especially regarding China’s plans for hydropower development on the Yarlung Tsangpo, which carries downstream implications. Another significant area of discussion has been resource security. China’s reported willingness to ease restrictions on rare earth and mineral exports could prove crucial in reducing India’s dependence and supply-chain vulnerabilities, particularly in electronics and advanced manufacturing sectors.
Outlook: A Balancing Act
The road ahead will be tested when Modi and Xi meet again at the Shanghai Cooperation Organisation summit in Tianjin on 31 August. Bilateral trade remains deeply imbalanced, with India exporting just USD 14 billion to China while importing USD 113 billion in FY 2024–25, giving Beijing considerable leverage. Still, the two sides are likely to pursue tactical benefits from closer cooperation. For India, engagement with China offers an economic counterweight at a time when US tariffs pose new challenges. For China, India represents another important partner as Beijing diversifies its economic outreach beyond the European Union and Australia. Meanwhile, India’s concurrent talks with Russia on energy supply introduce the possibility of a trilateral dimension involving India, China, and Russia within the BRICS framework. Yet, the sustainability of improved relations will depend on how effectively both nations address three unresolved challenges: border security, trade asymmetry, and China’s continuing alignment with Pakistan.
Conclusion
The latest round of diplomatic outreach between India and China reflects both strategic necessity and tactical pragmatism. Faced with global trade pressures and shifting alliances, the two countries appear ready to cautiously cooperate while remaining aware of their unresolved differences. Whether this marks a genuine turning point or a temporary alignment remains uncertain, but the momentum suggests that India and China are edging toward stronger bilateral ties under the shadow of US tariff measures.
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