Indian Prime Minister Narendra Modi reiterated on Saturday that establishing and maintaining “peace and tranquility” along the contentious border region is paramount for the flourishing of bilateral relations with neighboring China. This crucial statement comes as ties between the two Asian giants, which experienced a severe downturn following a deadly border skirmish in 2020, have shown signs of improvement over the past year.
Chinese President Xi Jinping made his first visit to India since 2019, marking a significant step in the diplomatic thaw. During their bilateral meeting, held on the sidelines of the high-profile BRICS Summit, both Modi and Xi committed to finding a “fair, reasonable, and mutually acceptable” resolution to their longstanding border issues.
The leaders agreed on the necessity of adopting a “strategic and long-term perspective” on their relationship, emphasizing that existing differences should not be allowed to escalate into disputes. Border disputes, which date back decades and famously led to the 1962 Sino-Indian War, along with a significant trade imbalance heavily favoring China, have historically been central points of contention.
Recent diplomatic efforts have seen progress; last month, the two nations conducted their 25th round of talks, resulting in an eight-point consensus aimed at resolving their boundary questions.
Economically, India grapples with a substantial trade deficit with China, relying heavily on imports from the world's second-largest economy. China remains India's largest business partner, with total trade reaching a record $151.1 billion in the year ending March 2026. However, India's deficit with Beijing has also surged to an unprecedented $112.16 billion, up from $99.21 billion.
Addressing these concerns, the readout from the bilateral meeting indicated that Modi and Xi agreed to tackle the structural trade imbalance, supply chain vulnerabilities, and the need for predictable market access.
The improving relationship follows a key meeting between Modi and Xi in Tianjin last year, which contributed to the current positive momentum. Practical steps reflecting this thaw include the resumption of direct flights between India and China, the reopening of several ancient Silk Road trade routes, and India’s easing of investment regulations for Chinese entities in March.
