Reuters reported on Tuesday that relations between India and China are showing signs of improvement, with Beijing pledging to support New Delhi's requirements for rare earths, according to an Indian official and a source familiar with the matter.

The two Asian powers, whose ties had been badly strained by a deadly border confrontation in 2020, appear to be seeking common ground as Prime Minister Narendra Modi prepares to travel to China at the end of August for the Shanghai Cooperation Organisation (SCO) summit in Tianjin, his first visit since 2018.

Chinese Foreign Minister Wang Yi is in New Delhi for the 24th round of border negotiations with India's National Security Advisor Ajit Doval, and is also scheduled to meet Modi ahead of the trip.

"There has been an upward trend. Borders have been quiet. There has been peace and tranquillity," Doval told Wang at the start of the discussions. "Our bilateral engagements have been more substantial. The new environment that has been created has helped us in moving ahead in the various areas that we are working on."

Diplomatic recalibration

Wang, according to a translation published by Indian news agency ANI, acknowledged that the difficulties of recent years "were not in the interests of the people of the two countries." He also stressed that China "attaches great importance" to Modi's participation in the SCO summit, saying that "a healthy and stable China-India relationship serves the fundamental and long-term interests of both of our countries."

An Indian source told Reuters that Wang had assured Foreign Minister Subrahmanyam Jaishankar that Beijing was addressing India's concerns in three specific areas: fertilisers, rare earths, and tunnel boring machines.

Neither India's Foreign Ministry nor its Mines Ministry commented on the assurances, while China's Commerce Ministry also did not provide an immediate response to Reuters' request. It is still unclear whether Beijing has agreed to grant faster approvals for exports to India or broader exemptions.

Strategic signaling

Beijing has previously promised to accelerate export licensing for the United States and Europe, though it has not loosened its broader control regime. Customs figures show Chinese exports of rare earths and related magnets surged in June as backlogs were cleared, yet shipments to India were still 58% below January levels. Despite possessing the world’s fifth-largest rare earth reserves, estimated at 6.9 million metric tons, India lacks domestic magnet manufacturing and remains dependent on imports, mostly from China.

Since the Galwan Valley clash in 2020, the deadliest border confrontation between the two countries in decades, New Delhi has restricted Chinese tech investment and banned dozens of Chinese apps, while continuing military deployments along the Line of Actual Control. At the same time, both sides have kept trade flowing, with China remaining India’s largest goods supplier.

Now, Washington’s revival of sweeping tariffs under President Donald Trump has created new economic pressures. For Beijing, facing restrictions from the US and Europe, and for New Delhi, seeking to expand its export base, selective cooperation on critical inputs offers a way to hedge against global turbulence.

Modi’s upcoming visit, analysts say, will be less about resolving the long-standing border dispute and more about signaling a readiness to balance rivalry with pragmatic engagement. Alongside security confidence-building measures, discussions are expected to touch on trade facilitation and coordination within the SCO framework, as both countries look to manage competition while mitigating the risks of external economic shocks.

Read more: China holds the rare earth power behind US military might: FP