Modi-Xi meet signals tactical Sino-Indian rapprochement amid US tariff pressures

The aggressive US tariff policy under the Trump administration has had the unintended consequence of pushing India and China closer together. Faced with American antagonism, India has recalibrated its foreign policy and is seeking closer relations with China. This has not gone unnoticed by the White House and might even be a cause of some anxiety.

This cautious rapprochement follows years of strained relations due to military clashes and ongoing border disputes. With a growing middle class, India represents a critical and potentially expanding consumer market for Chinese exports. This is especially important as the US closes its market to Chinese goods through tariffs and other barriers.

Trade negotiations between the US and China in 2025 are ongoing but subject to uncertainty, largely shaped by the re-election of President Donald Trump. Following a renewed tariff dispute earlier in the year, a temporary truce was established in May and later extended in August to allow for further talks. High tariffs and a complex diplomatic landscape continue to define the relationship.

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China is driven to seek better ties with India primarily by economic motives and strategic considerations. Facing protectionist pressures from the United States, Beijing sees improved relations with New Delhi as a way to secure its economic interests and counter Western influence in the Indo-Pacific.

Since the US imposed major new tariffs on India in August 2025, China has worked to improve its relationship with New Delhi. Beijing has indicated it will provide greater access to its markets for Indian goods to help India offset the impact of the U.S. tariffs. Chinese officials have publicly condemned the US for imposing a 50 per cent tariff on Indian goods, with the Chinese Ambassador to India, Xu Feihong, explicitly stating that his country will “firmly stand with India to uphold the multilateral trading system”.

Chinese Foreign Minister Wang Yi said recently, upon arriving for a two-day visit to Delhi, that the “setbacks that we faced in the last few years were not in our interest” and that India and China should view each other as “partners” rather than “adversaries or threats”.

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These sentiments have been fully reciprocated by India. During his recent visit to Japan, in an interview with Japan’s largest newspaper, The Yomiuri Shimbun, PM Modi said that, given the current volatility in the world economy, it is important for India and China, as two major economies, to work together to bring stability to the world economic order. He added that “stable, predictable and amicable bilateral relations between India and China can have a positive impact on regional and global peace and prosperity.”

Against this backdrop, PM Modi and President Xi Jinping had a highly significant meeting on 31st August on the sidelines of the SCO summit in the Chinese port city of Tianjin. Xi said in his opening remarks that “the world today is swept by once-in-a-century transformations,” and that “it is the right choice for both sides to be friends who have good neighbourly and amicable ties, partners who enable each other’s success, and to have the dragon and the elephant dance together,” referring to traditional symbols of the two nations.

In response, PM Modi said India was “committed” to taking their countries’ relations forward “on the basis of mutual trust and respect”. He added, “The interests of 2.8 billion people in both our countries are tied to our cooperation.” PM Modi also highlighted their shared stated aim to make the international order more “multipolar”, a term used by both countries to call for international power to be more broad-based as opposed to being dominated by the US and its Western allies.

Despite the recent positive developments, major impediments will still prevent full normalization. Xi Jinping said during his meeting with PM Modi that India and China should work together to maintain peace and tranquillity in the border areas and should not let the border issue define the overall China-India relationship. However, while China has traditionally advocated improving the overall bilateral relationship irrespective of the border issue, India has insisted that the resolution of the border is central to the broader relationship.

Thus, while China and India have economic incentives to collaborate against US tariffs, deep strategic rivalry and long-standing border disputes persist. A fundamental and complete realignment is unlikely, and India will continue to maintain a cautious stance towards China.

There can be no doubt that the biggest obstacle to normalization is the unresolved border dispute along the Line of Actual Control (LAC), which has been an irritant since the 1962 Sino-Indian War. The situation remains fragile despite some progress on de-escalation. India has insisted on restoring the “peace and tranquillity” that existed on the border before the deadly 2020 skirmishes, viewing a resolution of the border as central to the broader relationship.

The India-China territorial dispute stems from differing interpretations of the border, with China continuing to dispute India’s claims over regions like Aksai Chin and Arunachal Pradesh. China has issued maps showing Aksai Chin — an area of Kashmir mostly controlled by China since the 1962 war — and the Northeastern state of Arunachal Pradesh within Chinese territory.

As recently as May 14 this year, China has reasserted its territorial claims in Arunachal Pradesh. Despite professed claims about efforts to improve diplomatic ties with India, the Chinese Ministry of Civil Affairs published its latest names for places in Arunachal Pradesh, which China calls Zangnan and says is part of the Tibetan autonomous region. The renaming of 27 places covered an array of geographical features: 15 mountains, five residential areas, four mountain passes, two rivers, and one lake. India rejected the new Chinese names for places in Arunachal Pradesh as a “preposterous” attempt to alter the “undeniable” reality that the state “was, is, and will” always be an integral part of India.

It is, in fact, an old Chinese habit to periodically issue lists of new names for locations in Arunachal Pradesh. India describes the names as “inventions” by China and has consistently and unequivocally dismissed them. China’s renaming of places in Arunachal Pradesh is a strategic move to assert unilateral claims, which India firmly rejects, emphasising Arunachal’s integral status. Strengthening infrastructure, military deterrence, and global alliances is crucial for India to counter China’s tactics and safeguard sovereignty.

There are important geopolitical considerations that also need to be considered. China supports Pakistan against India through various means, including providing military equipment, intelligence, and economic assistance. This support is often seen as part of a strategic alliance aimed at countering India’s influence in the region.

Consequently, India feels that the China-Pakistan axis, characterized by strong military and economic ties, poses a strategic challenge for India. This axis is working against Indian interests, particularly due to China’s support for Pakistan in regional disputes. China is a major supplier of military equipment and technology to Pakistan, further strengthening their relationship but escalating mistrust with India. China has emerged as Pakistan’s largest arms supplier, accounting for almost 81 per cent of Islamabad’s weapon systems inventory. Among the weapons supplied by China to Pakistan are fighter jets, missiles, drones, radar systems, warships, and submarines. China has also been implicated in assisting Pakistan’s nuclear weapons programme.

Following the Pahalgam terror attack, China moved swiftly to arm Pakistan. Reports suggest Beijing delivered advanced PL-15 air-to-air missiles to Pakistan’s air force within days. Debris from one such missile, found undetonated in India’s Punjab, points to Chinese involvement in Pakistan’s latest assault. Pakistani jets used in combat were also Chinese-made. During the recent clashes with India, China reportedly provided Pakistan with air defence and satellite support, including adjusting satellite passes to monitor Indian troop movements.

China’s support for Pakistan in the context of terrorist groups further fuels India’s concerns. China and Pakistan reportedly objected to the inclusion of The Resistance Front (TRF) and Lashkar-e-Taiba (LeT) in a UN Security Council statement condemning the April 22, 2025 Pahalgam attack. This aligns with a past pattern where China has blocked India’s attempts to designate Pakistan-based terrorists and outfits under the UN’s 1267 sanctions regime. China had blocked India’s proposal at the United Nations Security Council (UNSC) to ban five Pakistan-based terrorists who carried out terrorist acts against India.

Thus, the recent improvements in China-India relations should be viewed as a calculated, tactical détente. While dialogue has resumed on issues like trade and people-to-people exchanges, deeper strategic and security cooperation remains unlikely. The trust deficit runs deep, and India views China with suspicion after the 2020 border clashes. While driven by a shared interest in responding to a shifting US foreign policy, the deep structural competition and distrust mean that a fundamental realignment of relations may not yet be on the horizon.

The writer is a retired Indian diplomat and had previously served as Ambassador in Kuwait and Morocco and as Consul General in New York. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.