Indian Prime Minister Narendra Modi and Chinese President Xi Jinping met on the sidelines of the BRICS summit in New Delhi to rebuild diplomatic ties and address trade imbalances following a 2020 Himalayan military clash, according to statements from the Indian Ministry of Foreign Affairs and state news agency Xinhua. The talks mark Xi’s first visit to India in 7 years as both nations navigate a complex economic relationship featuring a record bilateral trade volume alongside persistent structural deficits for New Delhi.
Bilateral Trade Reaches Record High Amid Structural Deficits
Bilateral trade between India and New Delhi reached an unprecedented 155.6 مليار دولار in 2025, according to Chinese customs data cited by the Indian Foreign Ministry. However, the economic exchange reveals a steep trade imbalance. China has become India’s largest import source, with New Delhi’s purchases from Beijing climbing to roughly 132 billion dollars in the 2025–2026 fiscal year. Because Indian exports to China remain significantly lower, India faces a trade deficit exceeding 100 billion dollars.
During the summit discussions, both leaders emphasized the necessity of tackling these specific economic hurdles. The Indian Foreign Ministry stated that Modi and Xi agreed on addressing each party’s concerns, which include structural flaws in the trade balance, supply chain bottlenecks, and the need for more concrete and predictable market access. Despite the easing of military tensions, companies in both countries continue to encounter bureaucratic obstacles, including delayed visa issuances and restrictions on selling industrial equipment.
Strategic Alignment and Regional Stability at BRICS
Chinese President Xi Jinping told Indian Prime Minister Narendra Modi that Beijing views and develops Sino-Indian relations from a strategic and long-term perspective, according to Xinhua. Xi stressed that China and India are partners rather than adversaries, urging both nations to find a balanced settlement for their trade concerns and leverage each other’s strengths for shared development.
The diplomatic thaw follows a severe rupture in relations sparked by a deadly 2020 border clash in the western Himalayas that resulted in the deaths of 20 Indian soldiers and four Chinese soldiers, following a brief 1962 border war. Relations began recovering late in 2024 after Xi and Modi agreed to end the military standoff. Prime Minister Modi noted during the recent talks, as reported by the Indian Foreign Ministry, that peace in the border regions remains an essential foundation for the continued development of bilateral ties. Reuters analysts observed that while Xi’s visit bolsters the diplomatic thaw, trade friction points remain largely unaddressed.
Did you know?
The BRICS bloc, founded in 2009 with Brazil, Russia, India, China, and South Africa, expanded to include Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates. Member states collectively comprise over 40% of the world’s population and nearly a quarter of the global economy.
Frequently Asked Questions
Why did Indian and Chinese leaders meet in New Delhi?
Prime Minister Narendra Modi and President Xi Jinping met on the sidelines of the BRICS summit to continue rebuilding bilateral ties damaged by a 2020 Himalayan military clash and to discuss trade and transport links, according to the Indian Ministry of Foreign Affairs.
What is the current state of India-China trade?
Bilateral trade reached a record 155.6 مليار دولار in 2025 based on Chinese customs data. However, India runs a trade deficit of over 100 billion dollars, driven by roughly 132 billion dollars in imports from China during the 2025–2026 fiscal year against much lower Indian exports.
What are the main obstacles facing businesses in both countries?
According to corporate reports from both nations, companies still face bureaucratic hurdles, delayed visa approvals, and restrictions on industrial equipment sales despite the easing of military tensions.
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