India and China—Asia’s two largest economies—are exploring a potential reset in relations as both nations feel the sting of aggressive US tariffs under President Donald Trump. Indian Prime Minister Narendra Modi’s visit to China comes days after the US imposed steep 50% tariffs on key Indian exports like prawns and diamonds. Washington claims the move is punishment for India’s continued oil imports from Russia.
The tariffs are expected to have a severe impact on India’s export-led growth strategy. Simultaneously, China’s President Xi Jinping faces a slowing domestic economy and mounting US trade pressure. Both leaders now appear to be seeking common ground as they meet at the Shanghai Cooperation Organisation (SCO) summit, a platform once dismissed by India but now seen as a vehicle for promoting a multipolar world order.
Experts argue this moment could be pivotal. “India was never the Western counterbalance to China as once imagined,” say analysts Chietigj Bajpaee and Yu Jie. “Modi’s trip could signal a turning point.”
A closer India-China relationship could reshape global dynamics. India’s economy, valued at $4 trillion, is forecast to grow above 6% annually and become the world’s third largest by 2028, according to the IMF. While economic cooperation is enticing, major obstacles remain—most notably, the unresolved border dispute, which saw deadly clashes in Ladakh in 2020 and sparked diplomatic freeze, including India’s ban on over 200 Chinese apps.
Other flashpoints—such as water rights, Chinese infrastructure projects, and Beijing’s ties with Pakistan—add layers of tension. Still, signs of thaw are emerging: direct flights between the nations are resuming, visa policies may be relaxed, and economic collaborations could slowly resume.
India’s strained relations with Washington also play a role. The US, once seen as a strategic partner, now appears unpredictable to New Delhi. Modi’s renewed interest in the SCO reflects a pragmatic pivot. “It’s a smart geopolitical move,” says economist Priyanka Kishore. “It supports the multipolar vision both India and China endorse.”
For China, strengthening ties with India offers valuable optics of Global South unity amid growing isolation from the West. As Trump threatens even harsher tariffs on Brics nations, both India and China may find renewed value in forging a cautious, yet strategic, economic understanding.
