Indian Prime Minister Narendra Modi met Chinese President Xi Jinping on Sunday, August 31, stressing New Delhi’s commitment to improving China-India relations.

The meeting took place on the sidelines of the Shanghai Cooperation Organisation (SCO) summit, where leaders from Asia gathered in a display of Global South solidarity.

Modi’s first visit to China in seven years came shortly after Washington imposed steep 50% tariffs on Indian goods over New Delhi’s continued purchases of Russian oil. Analysts say both leaders sought to present a united front against Western pressure.

According to India’s Foreign Ministry, Modi told Xi that the relationship should be based on “mutual respect, trust and sensitivities” and not viewed through the lens of a third country.

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Investment and trade deficit take center stage

Both leaders agreed to expand bilateral investment and trade ties while addressing India’s persistent trade deficit with China. The deficit, which reached a record $99.2 billion this year, remains a longstanding source of frustration for Indian officials.

China also agreed to lift export curbs on key resources such as rare earths and fertilizers during a recent visit to India by Chinese Foreign Minister Wang Yi. Direct flights between the two countries, suspended since 2020, are also set to resume.

The leaders addressed the disputed Himalayan frontier, where clashes in 2020 froze much of the bilateral relationship. Modi said an atmosphere of “peace and stability” had been restored, adding that a new agreement had been reached on border management.

Xi, quoted by Chinese state media, said the two nations “must not let the border issue define the overall China-India relationship,” and emphasized that ties could be “stable and far-reaching” if both sides viewed each other as partners rather than rivals.

Regional and global dimensions of the relationship

China and India also discussed broader regional and global issues, including terrorism and fair trade within multilateral forums. Both leaders reiterated their countries’ pursuit of strategic autonomy in a shifting global order.

China has publicly opposed Washington’s tariff measures against India, with Beijing’s ambassador in New Delhi recently declaring that China would “firmly stand with India.”

The relationship has also seen cautious progress on cultural and people-to-people exchanges, with China allowing Indian pilgrims to visit sites in Tibet and both countries easing reciprocal visa restrictions.

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While cooperation on trade and diplomacy is growing, irritants remain, from water-sharing concerns linked to a planned Chinese mega-dam in Tibet, to Beijing’s support for Pakistan and New Delhi’s hosting of the Dalai Lama.

Still, the leaders’ latest meeting marks a significant step toward stabilizing ties and expanding common ground.