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Modi's China Visit: Could it reset links amid Trump's tariff war?

As India marks 75 years of diplomatic ties with China, the Prime Minister's potential visit to the SCO Summit could help redefine relations shaped by Galwan, US-led tariff battles and global realignments

By Rucha Sharma Forbes India Staff

Published: Aug 8, 2025 02:57:49 PM IST

Updated: Aug 8, 2025 02:59:06 PM IST

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(File) India's Prime Minister Narendra Modi (L) shaking hands with Chinese President Xi Jinping in Wuhan. Photo by Handout / PIB / AFP

India's relationship with China has one of the most complicated dynamics in the world, and the recent tariff war initiated by US President Donald Trump has added another layer to it. That is why Indian Prime Minister Narendra Modi's potential visit to Beijing later this month holds even more significance from the political, economic, and diplomatic lenses.

According to reports, preparations are underway to schedule PM Modi's visit to attend the Shanghai Cooperation Organisation (SCO) Summit in Tianjin from August 31 to September 1. It is being speculated that during his visit to the neighbouring country for the first time in seven years, Modi will hold bilateral talks with Chinese President Xi Jinping on the sidelines of the Summit. The last time the two leaders met was in October 2024 when the BRICS Summit was held in Kazan, Russia.

The Indo-China relationship has been strained since the clash in Galwan Valley in the Ladakh region in June 2020—the deadliest skirmish between the armed forces of both countries since the 1962 war. But the meeting on the margins of the BRICS Summit in Russia in October 2024 set the stage for disengagement of troops along the Line of Actual Control (LAC) in Ladakh. Here is how the relationship has played out since Galwan.

June 2020: Indian government bans 59 Chinese mobile and desktop applications.
August 2020: The Ministry of External Affairs adds extra scrutiny and asks for prior security clearance for visas for Chinese businesspersons, academics, industry experts, and advocacy groups.
October 2020: India signs the Basic Exchange and Cooperation Agreement with the US to improve information sharing and further defence cooperation to counter China.
January 2021: A 'minor face-off' along the LAC in Sikkim.
December 2022: Another skirmish breaks out along the LAC in the Tawang sector of Arunachal Pradesh, where Beijing said the Indian army obstructed a routine patrol, while New Delhi said Chinese soldiers were encroaching upon Indian territory.
August 2023: On the margins of the 15th BRICS Summit in Johannesburg, South Africa, Modi and Jinping meet and agree to de-escalate the tensions at the border. They 'underline that the maintenance of peace and tranquillity in the border areas, and observing and respecting the LAC are essential for the normalisation of the India-China relationship.'
June 2024: S Jaishankar, India's Minister of External Affairs, meets with Chinese Foreign Minister Wang Yi on the sidelines of the SCO Summit in Kazakhstan and discusses efforts to resolve the border issue.
October 2024: Foreign Secretary Vikram Misri says India and China have had a breakthrough and have agreed to patrolling arrangements in border areas along the LAC. "We reached an agreement on patrolling, and we have gone back to the 2020 position. With that, we can say the disengagement with China has been completed. Details will come out in due course," S Jaishankar said at the time.
October 2024: Modi and Jinping once again meet in Kazan, Russia, on the sidelines of the 16th BRICS Summit, and reiterate the need to resolve differences. "The two leaders affirmed that stable, predictable, and amicable bilateral relations between India and China, as two neighbours and the two largest nations on earth, will have a positive impact on regional and global peace and prosperity," MEA said in a statement.
April 2025: New Delhi announces resumption of the Kailash Mansarovar Yatra. The Ministry of External Affairs said, "Kailash Mansarovar Yatra organised by the Ministry of External Affairs is set to take place from June to August 2025." The negotiations for the yatra picked up pace after Foreign Secretary Vikram Misri visited China in January.
June 2025: India's Defence Minister Rajnath Singh meets with his Chinese counterpart, Admiral Dong Jun, on the sidelines of the SCO Defence Ministers' meeting in Qingdao, China. Singh called for “bridging the trust deficit created after the 2020 Border standoff, by taking action on the ground.” India's stance was clear: Dialogue is welcome, but disengagement must precede normalisation. As the first batch of 50 pilgrims began the Kailash Mansarovar Yatra on June 13, both countries agreed to expedite resuming direct flights between the two nations.
July 2025: India resumes tourist visas for Chinese nationals.

(File) Chinese Defence Minister Dong Jun, Russia's Defence Minister Andrei Belousov and India's Defence Minister Rajnath Singh visit a meeting hall where the 2018 SCO Summit was held, at the Shanghai Cooperation Organisation (SCO) Defence Ministers' Meeting in Qingdao, Shandong province, China June 26, 2025. Photo by REUTERS/Florence Lo

Cooperation and Competition

The year 2025 marks the 75th anniversary of India–China diplomatic ties, and both governments look keen to leverage it to nudge the relationship back on track. But the task is easier said than done. India's diplomatic, trade, and security relations with China are a delicate structure. There is cooperation but also competition. For long, India has been perceived as a counterweight to China, hence the red carpet welcome into forums like the QUAD (Quadrilateral Security Dialogue), IMEC (India-Middle East-Europe Economic Corridor), ASEAN (Association of Southeast Asian Nations) and G20. China, on the other hand, has pushed in with its Belt and Road Initiative to make strategic and economic alliances.

India has been playing an active role in the Indo-Pacific Maritime Domain Awareness (IPMDA) military drills with the US and Japan. It has port access in Vietnam, Indonesia, and the Seychelles, which are viewed cautiously by China. Beijing's deepening military and economic links with Islamabad remain a concern for India, which were highlighted during the clashes across the border after the Pahalgam attack. In South Asia, China's investments in Sri Lanka (Hambantota Port) and Myanmar (Kyaukpyu Port) are viewed in New Delhi as encirclement strategies.

Also read: Except trade, little integration between India and China

Bilateral trade between India and China continues despite political tensions. Trade volume for FY25 stood at over $125 billion and China maintained its position as India's second-largest trading partner. Yet, India's trade deficit with China remained uncomfortably high, hovering near $99 billion. This imbalance is propelled by heavy imports of electronics, solar components, Active Pharmaceutical Ingredients (APIs), and more, while Indian exports to China continue to lag. India had previously imposed restrictions on Chinese investments to prevent opportunistic takeovers of Indian companies during the economic uncertainty of the COVID-19 pandemic. China also introduced its own set of curbs amid concerns over India's expanding manufacturing ambitions, making it increasingly difficult for Chinese firms to engage in business with Indian counterparts.

In the thick of the tariff war

China tightened export controls on critical rare earth materials and industrial magnets after the US imposed tariffs on China in April. India has been caught in the crossfire of China's aim at the US and faces supply disruptions that impact the automobile, technology, and clean energy sectors. India's push for self-reliance (Aatmanirbhar Bharat) and China+1 supply chain diversification has accelerated domestic manufacturing but it will be years before these efforts shift the trade imbalance in a meaningful way.

Also read: USA imports 3 times more from Russia than it does from Ukraine

While China is still negotiating a trade deal with the US, President Donald Trump signed an executive order on Thursday placing an additional 25 percent tariff on Indian goods, taking the total import duty to 50 percent. The steeper tariffs have been imposed on Indian goods over New Delhi's continued purchase of Russian oil, even as Beijing has been getting warnings from US Treasury Secretary Scott Bessent about the same. Trump's order also threatens penalties on other countries who "directly or indirectly" import Russian oil, which could affect the Russian economy and its war effort in Ukraine.

India found a surprising ally when Chinese Foreign Ministry spokesperson Guo Jiakun said, "China's opposition to the abuse of tariffs is consistent and clear," when asked about Trump's order targeting India. Both China and India, the top two buyers of Russian oil, are facing the tariff threat. This gives the nations one more reason to intensify diplomatic and trade dialogues.

Niti Aayog has already recommended easing FDI rules towards China. NSA Ajit Doval has met with Russian President Vladimir Putin to lay the groundwork for his visit to India later this year. S Jaishankar is also expected to visit Russia later this month. Russia had to rely on energy exports to China, as well as critical imports and other investments, due to the war with Ukraine. New Delhi has been watching this development while assessing Kremlin's support if things were to escalate with China. Could Russia capitalise on the rift between India, China, and the US by proposing a trilateral connection with India and China? The possibilities are many.