New Delhi — India and China are actively restoring economic links that were severely strained after the deadly 2020 border clash, marking a new phase in India-China relations. Prime Minister Narendra Modi is now moving closer to BRICS countries, especially after United States President Donald Trump imposed a 50% tariff on Indian goods.
Modi Pushes for Direct Flights with China
Modi has decided to resume direct flights with China as early as next month, according to people familiar with the negotiations. Officials expect the formal announcement during Modi’s first visit to China in seven years, where he will meet President Xi Jinping at the Shanghai Cooperation Organization summit in Tianjin on August 31. India suspended flights during the Covid-19 pandemic, a period that also saw a steep decline in India-China relations after the Himalayan clashes that killed 20 Indian soldiers and an undisclosed number of Chinese troops.
Trump’s Tariffs Shift Modi’s Economic Strategy
Trump’s decision to double tariffs on Indian goods India for purchasing Russian oil has significantly altered Modi’s economic calculus. The US president’s remarks that India’s economy was “dead” and its tariff barriers “obnoxious” have further strained US-India ties. Consequently, Modi has sought strategic autonomy by strengthening India-China relations and expanding cooperation with BRICS partners. Beijing has responded positively, easing restrictions on urea exports to India and opening avenues for broader trade, including potential battery manufacturing partnerships between Adani Group and Chinese EV leader BYD Co.
Thaw in Ties Amid Ongoing Rivalry
India has also lifted visa restrictions for Chinese tourists, signaling another step forward in India-China relations. However, experts note that trust will not be fully restored overnight due to deep-rooted rivalry and recent frictions, including China’s reported support for Pakistan in its dispute with India. Despite this, both nations recognize the need for dialogue as leaders of the Global South. Furthermore, Modi is simultaneously strengthening relations with Brazil and Russia, challenging US trade pressure while continuing to import discounted Russian oil.
In this shifting geopolitical landscape, India-China relations are entering an “up cycle,” driven by economic pragmatism and shared resistance to US tariff policies.
