Key Takeaways
- India and China’s leaders pledged to build up business and transport links.
- Bilateral trade reached a record USD 155.6 billion in 2025.
- Both countries continue to face hurdles in trade, including red tape and visa delays.
India and China’s leaders, Prime Minister Narendra Modi and President Xi Jinping, met on the sidelines of a BRICS summit in New Delhi, marking Xi’s first visit to India in seven years. The meeting aimed to revive strained ties, particularly in the realms of business and transport, following a 2020 military clash on their disputed Himalayan border.
The two leaders emphasized the importance of promoting cultural exchanges, business linkages, and greater mobility between the two countries. They also underlined the need to address each other’s concerns, including structural trade imbalances and supply chain issues, to facilitate meaningful and predictable market access.
Bilateral trade between India and China reached a record high of USD 155.6 billion in 2025, according to Chinese customs data. China has emerged as India’s largest source of imports, with Indian purchases from China reaching approximately USD 132 billion in the 2025/26 fiscal year. In contrast, India’s exports to China remain much smaller, resulting in a trade deficit of over USD 100 billion.
Despite the progress, both countries continue to face challenges. Businesses in both nations report ongoing hurdles such as red tape, visa delays, and restrictions on selling industrial equipment. These issues persist despite the easing of military tensions, which began to recover at the end of 2024 after Xi and Modi agreed to end their military stand-off in the western Himalayas.
Xi stated that China has always viewed and developed China-India relations from a strategic and long-term perspective. He noted that institutional exchanges between the two countries are gradually being restored, the list of areas for cooperation is growing, and bilateral trade has reached a new high. However, irritants remain, as both countries continue to maintain substantial military deployments in the Himalayas and border talks progress slowly.
Modi highlighted the importance of peace in the border areas as an essential basis for the continued development of bilateral relations. He emphasized that without peace, the potential for business and transport links would be severely limited.
While the meeting between Modi and Xi marked a significant step towards improving relations, both nations acknowledge that there is still much work to be done. The leaders agreed to continue working together to address the remaining challenges and to foster a more stable and cooperative relationship.
The meeting underscores the ongoing efforts to strengthen economic ties and promote peace in the region, despite the historical tensions and current challenges. As the two nations continue to navigate their complex relationship, the focus remains on building a more harmonious and prosperous future for both countries.
