Indian Prime Minister Narendra Modi arrived in China on Sunday, carrying the weight of fresh US tariffs that have sharply increased duties on Indian exports.
Since Wednesday, tariffs on key Indian goods such as diamonds and prawns bound for the US have risen to 50%, a move US President Donald Trump described as punishment for India’s continued purchase of Russian oil.
Analysts warn the levies could inflict lasting damage on India’s export sector and threaten its ambitious growth targets.
Modi’s visit comes as Chinese President Xi Jinping also grapples with a faltering economy amid steep US tariffs that are clouding Beijing’s recovery prospects.
Against this backdrop, the leaders of the world’s two most populous nations may be looking for a reset in their relationship, long characterised by mistrust rooted in border disputes.
“Put simply, what happens in this relationship matters to the rest of the world,” wrote Chietigj Bajpaee and Yu Jie of Chatham House, noting that Modi’s visit could mark “a potential turning point.”
India and China are major economic powers – ranked fifth and second globally – with India expected to rise to third by 2028, according to the International Monetary Fund. “While global focus has traditionally been on US-China relations, it is time we pay closer attention to how the second and would-be third largest economies can work together,” said Qian Liu, chief executive of Wusawa Advisory in Beijing.
Yet relations remain fraught. A long-standing territorial dispute, most violently exposed in June 2020 during clashes in Ladakh’s Galwan Valley, continues to overshadow ties. The fallout saw direct flights suspended, visas and Chinese investments frozen, and India banning more than 200 Chinese apps, including TikTok.
Broader issues also persist, including Tibet, the Dalai Lama, and China’s controversial hydroelectric project on a transboundary river, alongside India’s tensions with Pakistan. Regional dynamics complicate matters further, with China serving as a key trading partner to Pakistan, Bangladesh, Sri Lanka, and Afghanistan, while India struggles with strained ties across South Asia.
“Dialogue will be needed to help better manage the expectations of other powers who look to India-China as a key factor in Asia’s wider stability,” said Antoine Levesques, senior fellow at the International Institute for Strategic Studies (IISS).
While experts remain cautious about prospects for major breakthroughs, some incremental steps have already been signalled. Direct flights between India and China are set to resume, with potential relaxations on visas and further economic agreements also under discussion.
Source: BBC
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