Modi and Xi back stronger India-China trade ties amid border tensions
Talks in New Delhi focused on trade imbalances, supply-chain concerns and market access while advancing business, transport and cultural exchanges.
- Indian Prime Minister Narendra Modi and Chinese President Xi Jinping met at a BRICS summit, agreeing to strengthen economic ties despite ongoing border tensions.
- Discussions focused on addressing a significant trade imbalance, with India's deficit exceeding US$100 billion, and improving market access and supply chain issues.
- The leaders backed stronger business, transport, and cultural connections to help repair relations damaged by a 2020 military confrontation.
- Modi reiterated that peace in the border areas remains an essential basis for the continued development of the bilateral relationship.
Trade between India and China reached a record US$155.6 billion in 2025, according to Chinese customs data, but the flow remains heavily weighted towards Beijing.
China is India’s largest source of imports, with Indian purchases rising to about US$132 billion in fiscal 2025/26, while India’s considerably smaller exports left New Delhi with a deficit of more than US$100 billion.
These economic disparities were among the issues discussed when Indian Prime Minister Narendra Modi met Chinese President Xi Jinping on Saturday (September 12) on the sidelines of a summit of the BRICS group of emerging nations in New Delhi.
The meeting took place during Xi’s first visit to India in seven years.
“On economic and trade relations, they underlined the need to address each other’s concerns, including structural trade imbalance and supply chain issues, and facilitation of meaningful and predictable market access,” India’s foreign ministry said.
The leaders also backed stronger business and transport connections as their countries continued to repair relations damaged by the 2020 military confrontation on their disputed Himalayan border.
Although military tensions have eased, companies in both countries still report bureaucratic obstacles, visa delays and restrictions on the sale of industrial equipment.
“The two leaders … underscored the need to further promote cultural exchanges, business linkages and greater mobility between the two countries,” the ministry said.
Xi said Beijing had always taken a strategic and long-term view of relations with India, according to the state-run Xinhua news agency.
He said institutional exchanges were gradually resuming, opportunities for cooperation were increasing and two-way trade had reached a new high.
China and India fought a short but violent border war in 1962.
Their relationship deteriorated again following the 2020 clash, which killed 20 Indian and four Chinese soldiers.
Relations began to recover at the end of 2024 after Modi and Xi agreed to end the military stand-off in the western Himalayas.
Significant troop deployments remain in the region, however, while negotiations over the border continue to make slow progress.
Modi said peace in the border areas remained an essential basis for the continued development of bilateral relations.
The two nuclear-armed neighbours share a largely unmarked frontier extending roughly 3,800 kilometres, or 2,400 miles.
Source: Reuters
