How India-China reset requires much more than Trumpian disruption

Prime Minister Narendra Modi and Chinese President Xi Jinping have highlighted cooperation, peace and stability for a long-term, strategic partnership between the two Asian giants.

As the two leaders met on the sidelines of the two-day Shanghai Cooperation Organisation (SCO) summit in China’s Tianjin on Sunday, there was a noticeable difference in PM Modi’s choice of words, which emphasised three missing factors on the Chinese side.

“We are committed to further strengthening our relations based on mutual trust, respect and sensitivity,” the PM said.

While President Xi said the right choice for “the dragon and the elephant” is to come together and be friends “who have good neighbourly and amicable ties and partners who enable each other’s success”.

Mentioning the most important source of friction between the two nations, Xi said that the border issue shouldn’t define their overall relationship.

The Chinese leader forgot that only “mutual trust, respect and sensitivity”, as Modi rightly said, can result in a long-term relationship—and the border issue is the most important factor in bilateral ties.

This SCO Summit has hogged the most limelight with the India-China relationship drawing international attention.

Donald Trump’s Tariff War

There was a deluge of media commentary on how the summit could start a détente between New Delhi and Beijing.

With Modi meeting Xi in China seven years after his last visit to the neighbouring country at the 2018 SCO Summit, political commentators and strategic and security affairs experts expect a thaw in ties, which nosedived following the Galwan clash in June 2020.

A ray of hope for a realignment of ties between the two nuclear powers was seen at the 16th BRICS summit in Kazan, Russia, last October, when Modi and Xi met.

The two leaders “affirmed that stable, predictable and amicable bilateral relations between India and China … will also contribute to a multipolar Asia and a multipolar world”.

Modi and Xi underlined the “need to progress bilateral relations from a strategic and long-term perspective, enhance strategic communication and explore cooperation to address developmental challenges”.

Soon, the disengagement at the Line of Actual Control (LAC) followed.

In fact, National Security Advisor Ajit Doval and Chinese Foreign Minister Wang Yi had set the stage for disengagement when they met in Saint Petersburg on the sidelines of the Meeting of Brics High-Ranking Officials Responsible for Security Matters/National Security Advisors in September.

Commentaries aside, even the government expects a new beginning with China.

In an interview with the Japanese daily The Yomiuri Shimbun on Friday, Modi said , “Given the current volatility in the world economy, it is also important for India and China, as two major economies, to work together to bring stability to the world economic order.”

“Re-emphasising the importance of a multipolar Asia and a multipolar world,” the PM said, “Stable, predictable and amicable bilateral relations between India and China, as two neighbours and the two largest nations on earth, can have a positive impact on regional and global peace and prosperity.”

The Chinese tone was similar back in March when Wang called on India and China to “take the lead in opposing hegemonism and power politics”. “… Making the elephant and dragon dance together is the only right choice,” he had said.

In July, Chinese vice-president Han Zheng emphasised the “dragon-elephant tango” and said that “becoming partners” was the right choice for India and China.

An India-China thaw will be good not only for India, especially regarding its relations with Pakistan, but also for China in countering American hegemony and strong-arm tactics. A coming together of the two Asian giants, with Russia’s backing, could be the best bulwark against US coercion—as Modi rightly called for a multipolar world.

However, expecting a reset in India-China ties should be seen in the larger context, the players involved and their equations.

Trump Tariffs and India-China Ties

What most political commentators and strategic and security affairs experts are missing is that the notion of “the adversary of adversary is my friend” will not hold for long between the two Asian rivals.

Joe Biden’s NSA Jake Sullivan said that “the Indians are saying, ‘I guess maybe we have to go show up in Beijing and sit with the Chinese because we’ve got a hedge against America’”.

Former Trump NSA John Bolton recently told CNN that President Trump’s additional 25 per cent tariffs on India or purchasing Russian oil could bring India, China and Russia closer against the US.

However, though Trump’s aggressive tariffs are a common problem that India and China face, they should be viewed logically to expect a recalibration of New Delhi-Beijing ties.

The problem’s magnitude is much more severe for India, which has been slapped with 50 per cent tariffs, including 25 per cent for purchasing Russian oil.

The Trump administration has dealt with India and China on the tariff front differently.

During his February US visit, Modi agreed to sign a trade deal by this year, increase bilateral trade to $500 billion by 2030 and pledged to purchase up to $25 billion in American energy and increase defence imports.

After Trump declared a global tariff war, India held five rounds of dialogue with the US and even offered zero duties on American industrial goods, which comprise 40 per cent of exports to India, hoping that Trump would reduce the tariff fate to 15 per cent.

However, the India-US talks eventually collapsed, ending in an impasse, after India refused to import American agricultural and dairy products. Trump didn’t extend the August 1, 90-day tariff deadline and instead imposed an additional 25 per cent duties on India for buying Russian oil.

The US alleged that India, the “Maharaja of tariffs” and a “laundromat for the Kremlin” , was funding Russia’s war with Ukraine. Trump’s trade and manufacturing advisor, Peter Navarro, has dubbed the conflict “Modi’s war” .

On the other hand, Trump offered several concessions to China.

The US didn’t slap secondary tariffs on China despite it being the largest purchaser of Russian crude. China imported 109 million tonnes (MT) of Russian crude in 2024 compared to India’s 88 MT.

Moreover, Trump has extended the 90-day tariff deadline with China twice with trade representatives from both nations meeting thrice.

After the US imposed 145 per cent duties on Chinese goods, China hit back with 125 per cent tariffs. However, the two sides agreed to a 90-day tariff pause on May 11.

Following the first round of talks in Geneva, America slashed tariffs on Chinese imports to 30 per cent while China reduced them to 10 per cent. Trump extracted another concession from China, which agreed to restart exporting some rare earth minerals critical for American electronics, aerospace and cars.

The second round of US-China talks was held in London in June. Subsequently, Trump reciprocated and paused the freeze on tech exports, like graphic processing units, to China to secure a meeting with Xi in October or November.

After the third round of talks in Stockholm in July, Trump extended the 90-day deadline for the second time.

India has more at stake in Trump’s tariff war.

The US was India’s largest trading partner for the fourth consecutive year in 2024-25. The bilateral trade was worth $131.84 billion with a surplus of around $45 billion in India’s favour.

India’s exports to the US increased by 11.6 per cent to $86.51 billion compared to $77.52 billion in 2023-24. Similarly, imports rose by 7.44 per cent in 2024-25 to $45.33 billion as against $42.2 billion in the last financial year.

According to Barclays, around 70 per cent of merchandise exports ($55 billion), mainly electrical machinery and gems and jewellery, to the US are under “serious threat” due to the 50 per cent tariffs.

In contrast, the economies of the US and China together comprised 43 per cent of the global GDP and about 48 per cent of international manufacturing output in 2023, per the World Bank.

China is America’s third-largest export market after Canada and Mexico. Besides, China holds around $760 billion worth of US treasury bonds, second after Japan.

The China-US bilateral trade in 2024 was almost five times that of between India and America—an estimated $658.9 billion, up 2.6 per cent ($17 billion) from 2023.

The US imported goods worth $438.7 billion from China in 2024, up 2.7 per cent ($11.5 billion) from 2023. Chinese goods, primarily computers, electric batteries and video displays, make up around 13.5 per cent of the US market, trailing only Mexico.

Despite having the largest trade deficit with China in 2024, $295 billion, the lowest since 2009, the US didn’t impose the same or a higher rate of tariffs compared to India.

China has a massive advantage over the US in trade—rare earths, a group of 17 chemically similar elements that are used to in fighter jet engine radar (F-35), missiles (Tomahawk), drones (Predator), computer hard drives, EV motors and also used in laser surgery and MRI scan.

China has monopolised rare earths extraction, a hazardous process, and refinement. Per the International Energy Agency, China’s share in rare earths production and processing is 61 per cent and 92 per cent, respectively.

In 2020-23, the US imported 70 per cent of its total rare earths requirement from China. When Trump slapped tariffs in April, China restricted exports of seven rare earth minerals critical to the US defence sector.

However, after China relaxed the restrictions on rare earths exports following the talks with the US in Geneva, shipments to America galloped by 660 per cent (353 tonnes) in June. After Germany, the US imported the maximum quantity of rare earths from China.

Therefore, expecting China to reset its ties with India over the tariff differences with the US sounds fantastical.

Trump tariffs don’t have a role to play in ending disputes or resolving issues between India and China. The SCO Summit can result in a temporary bonhomie, but it can’t be a permanent solution to the border dispute.

Further and expansive dialogue between New Delhi and Beijing and a dispute resolution mechanism is the only way to peaceful coexistence.

For example, the LAC disengagement was the result of bilateral dialogues. What 21 rounds of Corps Commander-level talks couldn’t do was achieved by the political leadership of both nations.

China Has Upper Hand with Russia’s Backing

India has not stopped importing Russian oil despite the secondary US tariffs and threats by Trump administration senior officials—but New Delhi hasn’t retaliated either.

India’s approach is cautious and pragmatic as Trump, advised by irrational aides like Navarro, could increase tariffs against India, in case of retaliation.

The best India can hope for from the SCO Summit is more trade with China, which has an advantage in imports.

China imported $15 billion worth of goods from India in 2024-25 On the other hand, India’s imports from China increased by 11.52 per cent to $113.45 billion against $101.73 billion in 2023-24. Exports decreased by 14.5 per cent to $14.25 billion compared to $16.66 billion in 2023-24.

China is India’s second-largest trading partner after the US with $127.7 billion bilateral trade in 2024-25 as against $118.4 billion in 2023-24.

China’s biggest advantage in dealing with the US, without India’s assistance, is Russia’s backing and the personal bond between Xi and his Russian counterpart Vladimir Putin.

Putin, who will also attend the SCO Summit, will be in China for four days, unusual for the Russian leader, and will be the chief guest of the military parade marking 80 years since the end of WW II.

Both leaders have met more than 40 times since 2012. Twenty days before Russia invaded Ukraine in February 2022, Putin and Xi announced their “no limits” friendship.

As the US seeks to contain China’s rise and continues to assist Ukraine against Russia, Xi affirmed their “no limits” friendship on the third anniversary of the war this February.

“China-Russia relations have strong internal driving force, unique strategic value and are neither aimed at nor influenced by any third party,” Xi said in a phone call with Putin.

“The development strategies and foreign policies of China and Russia are long-term. The two countries are good neighbours that cannot be moved apart,” he added.

The China-Russia trade volume reached a staggering $245 billion in 2024, more than double the 2020 figure and a 66 per cent rise compared to 2021. Last year, Russia exported crude oil worth $62.26 billion to China, a 54 per cent increase compared to 2021.

The Biden and the Trump administrations have brought China and Russia closer.

China, under Xi, refuses to buckle under American pressure, especially on Taiwan, and its military and strategic influence is increasing much to the US’s chagrin.

Russia, under Putin, continues with its grinding war of attrition in Ukraine despite massive military aid worth billions to Kyiv by the US and Europe.

India too has Russia’s backing. For decades, the Indian military, especially the Indian Air Force (IAF), has relied on Russian equipment, which has demonstrated its effectiveness in wars with Pakistan. Russian equipment comprises 86 per cent of India’s military inventory.

But the India-Russia relationship has its limits. For instance, Russia was initially neutral following the Galwan clash and refused to mediate.

During the RIC (Russia, India and China) 2020 virtual summit between the foreign ministers of the three nations, Russian Foreign Minister Sergey Lavrov said, “I don’t see any reason for a third-party intervention to solve the current issue.” However, Russia did engage in discreet diplomacy to de-escalate the India-China conflict.

The troika was formed years ago as an Eurasian power that could counter Western dominance. In May this year, Lavrov expressed “genuine interest in the earliest resumption of the work within the format of the troika”.

Conclusion

India faces a very complex situation. China is Pakistan’s steadfast ally and is also very close to Russia. In case of another border dispute with China, Russia will not come to India’s rescue considering the strong bond Moscow and Beijing share. Meanwhile, Trump has jolted India-US ties and is moving closer to Pakistan.

The SCO Summit definitely comes at a critical time in the context of Trump’s tariffs. However, hoping for an immediate reset in India-China relations would be expecting too much.

The writer is a freelance journalist with more than two decades of experience and comments primarily on foreign affairs. He tweets as @FightTheBigots. Views expressed in the above piece are personal and solely those of the writer. They do not necessarily reflect Firstpost’s views.