Modi-Xi meeting at BRICS: Where do India-China ties stand today?

Prime Minister Narendra Modi is expected to meet Chinese President Xi Jinping on the sidelines of the BRICS Summit in New Delhi on Saturday, in what would be the first visit by the Chinese leader to India in seven years and the latest step in a cautious effort to stabilise ties after the 2020 Ladakh crisis.

Xi last visited India in 2019, months before the military confrontation in eastern Ladakh pushed bilateral relations to their lowest point in decades.

While the two sides have since taken steps towards normalisation, the border dispute and a significant trust deficit continue to constrain the relationship.

Ladakh standoff to cautious thaw

The turning point came in October 2024, when India and China reached an understanding to end the prolonged military standoff in Ladakh. Modi and Xi met days later in Russia and agreed on measures aimed at improving ties and addressing the boundary question.

Since then, the two countries have resumed direct flights, revived the Kailash Mansarovar Yatra and restarted traditional border trade through three designated routes. India has also eased visa procedures for Chinese nationals.

At an August meeting in Beijing, National Security Adviser Ajit Doval said the improvement in relations was directly linked to maintaining peace along the border. “The normalcy we have witnessed in our relationship has been a direct result of both sides maintaining peace and tranquility in the border areas,” Doval said, according to PTI.

China, meanwhile, has called for greater communication and mutual trust. Foreign Minister Wang Yi said the two countries should “be good friends that enjoy good neighbourliness and be good partners that contribute to each other's success”, PTI reported.

Also read: Relations over rivalry, people over politics: India looks to build BRICS bridges in uncertain world

Arunachal remains a key faultline

The thaw has not removed tensions along the Line of Actual Control. Reports of fresh face-offs between Indian and Chinese troops emerged from the Taksing area of Arunachal Pradesh's Upper Subansiri district in July.

India has not publicly provided details of the reported tensions, while China's foreign ministry said on August 13 that the “border situation is generally stable at the moment”. Both sides have agreed to continue using diplomatic and military channels to "avoid misunderstanding and miscalculation”.

The issue was followed by corps commander-level talks at the Wacha-Damai border meeting point in Arunachal Pradesh's Kibithoo sector on September 7, the first such engagement in the eastern sector since the latest tensions were reported.

India has repeatedly stressed that the border situation will determine the broader relationship. “The state of the border affairs will reflect on the state of our larger bilateral ties,” MEA spokesperson Randhir Jaiswal said on August 12. India has reiterated that Arunachal Pradesh is an “inalienable and integral part of India”, after Beijing objected to India's decision to standardise names for 27 locations in the state.

Also read: Xi’s first visit in 7 years: India and China look to consolidate peace along LAC

Economic ties lag behind diplomatic thaw

The gap between political engagement and economic relations remains another major challenge. A Reuters analysis from this month said businesses in both countries continue to face hurdles involving investment approvals, visas and restrictions on industrial equipment.

India eased some restrictions on Chinese investment in March, particularly in electronics, capital goods and solar cells. Some projects have since received approval, including a manufacturing venture between Dixon Technologies and Chinese smartphone maker Vivo.

But major Chinese companies such as BYD and Great Wall Motor have not returned with planned investments that were shelved amid heightened scrutiny, Reuters reported. The news agency also reported delays affecting Chinese equipment and components needed by India's solar, electronics and infrastructure sectors.

“The ‘trust deficit’ between the countries was high,” Observer Research Foundation's Harsh Pant told Reuters, adding that China could use its economic heft to become “a reliable partner” as both countries face US trade pressures.

Former Indian trade official Anup Wadhawan told Reuters that a Modi-Xi meeting would “afford opportunities to better align political and economic interests”.