TIANJIN, China, August 31 (Reuters) - In a significant diplomatic engagement, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping have reaffirmed their countries' status as development partners rather than rivals. This agreement was made during discussions aimed at enhancing trade relations amid rising global tariff uncertainties. Modi's visit to China marks his first trip in seven years, coinciding with a two-day meeting of the Shanghai Cooperation Organisation (SCO) regional security bloc. This summit includes prominent leaders such as Russian President Vladimir Putin, along with representatives from Iran, Pakistan, and four Central Asian nations, showcasing a united front from the Global South.
Analysts suggest that the interactions between Xi and Modi are a response to increasing pressure from the West. This comes just days after U.S. President Donald Trump instituted a punitive 50% tariff on certain Indian goods, a move that partially stemmed from New Delhi's procurement of Russian oil. Such actions have jeopardized decades of diplomatic relations between the U.S. and India, which Washington had hoped would serve as a counterbalance to China's influence in the region.
During their meeting, Modi expressed India's dedication to enhancing relations with China. He addressed the need to mitigate India's growing bilateral trade deficit, which has reached nearly $99.2 billion. Modi emphasized the importance of maintaining peace and stability along their disputed border, especially following the violent clash in 2020 that led to a prolonged military standoff. "We are committed to progressing our relations based on mutual respect, trust, and sensitivities," Modi stated, highlighting the peaceful atmosphere that has emerged in the Himalayan region.
According to the Chinese state news agency Xinhua, Xi responded by asserting that China and India should view each other as opportunities for development rather than threats. "We must not let the border issue define the overall China-India relationship," Xi remarked, emphasizing that a stable and constructive relationship could benefit both nations if they approached each other as partners.
Relations between the two countries deteriorated significantly following the deadly clash in 2020, which resulted in the deaths of 20 Indian and four Chinese soldiers. In a recent update, Indian Foreign Secretary Vikram Misri noted that the border situation has evolved positively over the past year, aided by a patrolling agreement reached in October. "The situation at the border is moving towards normalization," he stated, underscoring the importance of ongoing dialogue.
Regarding the impact of U.S. tariffs, Modi and Xi discussed the current international economic landscape and the challenges it poses for both nations. They explored ways to leverage these challenges to foster a deeper understanding and to advance the economic and commercial relationship between India and China. Additionally, they deliberated on expanding common ground on bilateral, regional, and global issues, including challenges like terrorism and promoting fair trade practices within multilateral forums.
Both leaders have witnessed a thaw in relations following a breakthrough meeting in Russia last year, which led to a border patrol agreement. This diplomatic warmth is reflected in recent developments such as the planned resumption of direct flights between India and China, which had been suspended since 2020. Modi revealed that China recently agreed to lift export restrictions on crucial goods, including rare earths, fertilizers, and tunnel boring machines.
Despite the positive dialogue, significant challenges persist in India-China relations. China remains India's largest bilateral trade partner, yet the ongoing trade deficit continues to be a source of concern for Indian officials. Additionally, plans for a major Chinese dam in Tibet have raised alarms in India about potential water diversion impacting the crucial Brahmaputra River during dry seasons. Furthermore, India's hosting of the Dalai Lama, viewed by Beijing as a separatist threat, adds another layer of complexity to their relationship.
In conclusion, both India and China are navigating a complex landscape as they redefine their relationship amid global tensions. As they work towards a new equilibrium, mutual respect and cooperation will be critical in addressing the challenges they face together.
