New Delhi: India and China are moving towards closer diplomatic engagement, with Chinese President Xi Jinping expected to visit New Delhi for the BRICS summit on September 12 and 13. His visit would mark another important step in efforts to improve relations after years of tension, although Beijing had not formally confirmed his attendance in its latest public statements.
Prime Minister Narendra Modi is also expected to hold talks with Xi on the sidelines of the summit on September 12, according to diplomatic sources cited by Indian media. The meeting would be closely watched for signs of progress on border issues, trade and economic relations.
The expected visit follows a series of high level contacts that have gradually eased tensions between the world's two most populous countries. Relations deteriorated sharply after deadly clashes along the Line of Actual Control in eastern Ladakh in 2020, including the Galwan Valley clash in June that year.
The two countries have since taken several steps to restore communication. Modi and Xi met on the sidelines of the BRICS summit in Kazan, Russia, in October 2024. They met again in Tianjin, China, on August 31, 2025, during the Shanghai Cooperation Organisation summit.
During the Tianjin meeting, the two leaders welcomed progress in bilateral relations and said India and China should be development partners rather than rivals. They also stressed the importance of maintaining peace along the border. Modi invited Xi to attend the BRICS summit in India in 2026.
The border remains the most sensitive issue between the two countries. In October 2024, India and China reached an agreement on patrolling arrangements in the Depsang and Demchok areas, leading to disengagement in those areas. However, the wider boundary dispute remains unresolved.
Another important step came on August 25, when India's National Security Adviser Ajit Doval and Chinese Foreign Minister Wang Yi held the 25th round of boundary talks in Beijing. The two sides announced eight points of consensus, including a commitment to maintain peace in border areas and continue negotiations towards a framework for resolving the boundary dispute.
Despite the diplomatic progress, major obstacles remain in economic relations.
Trade between India and China has continued to grow, reaching record levels, but India's trade deficit with China remains very large. In the financial year 2025 to 2026, India's goods trade with China was about 151 billion dollars, while the trade deficit was about 112 billion dollars.
India has also eased some restrictions on Chinese investment in areas including electronics, capital goods and solar manufacturing. However, investment proposals from countries sharing a land border with India continue to face government scrutiny, particularly in sensitive areas.
Several major Chinese companies remain cautious about investing in India. Chinese vehicle makers BYD and Great Wall Motor have not revived investment plans that were shelved after facing increased scrutiny in India.
Business travel is another area where difficulties remain. India recently acknowledged problems faced by Indian companies in obtaining Chinese business visas. The issue has become part of wider efforts to restore business and people to people links between the two countries.
China's Foreign Ministry has said that it issues visas to Indian nationals with genuine needs to visit China in accordance with Chinese laws and regulations.
Direct commercial flights between India and China also resumed last year after more than five years of suspension. China has said that five direct flight routes between the Chinese mainland and India have now resumed. Border trade has also reopened after a long suspension.
At the same time, India continues to apply strict scrutiny to China linked activity in sensitive areas. New Delhi has stalled a proposal involving Alipay Plus and India's Unified Payments Interface because of national security and data concerns. Indian authorities are also considering a recommendation concerning Chinese smartphone maker Xiaomi, although the company has said it complies with Indian laws and has not received communication from the relevant investigation agency.
There are also continuing concerns about the movement of Chinese equipment and components needed by Indian industries. Reports of delays affecting some industrial and infrastructure equipment have added to concerns about India's dependence on Chinese supply chains.
The two countries therefore face a mixed picture. Diplomatic contacts have increased, border tensions have eased in some areas and trade continues to expand. But security concerns, investment restrictions, visa difficulties and the unresolved boundary dispute continue to limit trust.
The expected Modi Xi meeting could provide an opportunity to address some of these issues. However, any major improvement in the relationship is likely to require sustained engagement beyond the BRICS summit.
For now, India and China appear to be moving away from open confrontation towards cautious engagement. Both countries are seeking to protect their national interests while keeping diplomatic channels open, but the recent thaw should not yet be seen as a full normalisation of relations.