Archive · 12 Sep 2026
India and China Pursue Cautious Coexistence Amid Trade Concerns
India and China are trying to improve their relationship after years of tensions.
Their leaders, Narendra Modi and Xi Jinping, met during the BRICS Summit in India.
They agreed to keep talking about trade, business, travel, and cultural exchanges.
India is concerned that it buys much more from China than it sells there.
China may want India to make it easier for Chinese companies to invest.
The countries also discussed keeping peace along their disputed border.
They did not announce a final border agreement or a major trade deal.
For now, they are cautiously cooperating while managing their disagreements.
Prime Minister Narendra Modi and President Xi Jinping agreed to address trade imbalances, supply-chain issues, and market-access concerns.
The leaders reviewed progress since the 2024 disengagement and efforts to preserve peace along the Line of Actual Control.
No breakthrough was announced on the boundary dispute, a major trade agreement, or India’s broader strategic position.
India’s trade deficit with China rose to $112.16 billion in 2025-26 from $99.21 billion the previous year.
China overtook the United States as India’s largest trading partner as bilateral merchandise trade reached $151.10 billion in 2025-26.
- Who
- Prime Minister Narendra Modi of India and Chinese President Xi Jinping.
- What
- They discussed improving relations, trade, market access, supply chains, people-to-people ties, and border stability.
- When
- During the 2026 BRICS Summit; Xi Jinping’s visit was his first to India in nearly seven years.
- Where
- India, on the sidelines of the BRICS Summit.
- Why
- To address economic concerns and maintain dialogue and peace while managing unresolved border and security differences.
India’s Economic and Security Concerns
China’s Cooperation and Investment Interests
Trade balance
India’s Economic and Security Concerns
India wants to address its growing trade deficit, structural imbalance, supply-chain concerns, and the need for meaningful, predictable access to Chinese markets.
China’s Cooperation and Investment Interests
China supports continued economic engagement and argues that the two countries can support each other’s common development.
Investment access
India’s Economic and Security Concerns
India is seeking a more sustainable and balanced trading relationship while maintaining its existing strategic position.
China’s Cooperation and Investment Interests
China is expected to seek eased investment rules so Chinese companies can invest more easily in India.
Border relationship
India’s Economic and Security Concerns
India is continuing efforts to maintain peace and tranquillity along the Line of Actual Control, without a final settlement of the boundary dispute.
China’s Cooperation and Investment Interests
China says India and China should view each other as partners rather than rivals, while both sides continue managing unresolved security differences.
- Trade deficit
- India’s trade deficit with China rose from $99.21 billion in 2024-25 to $112.16 billion in 2025-26.
- Indian exports to China
- Exports rose 36.62% to $19.47 billion in 2025-26.
- Indian imports from China
- Imports rose 16.03% to $131.63 billion in 2025-26.
- Bilateral merchandise trade
- Trade increased 18.31% to $151.10 billion in 2025-26, reaching $151.10 billion.
- Largest trading partner
- China overtook the United States as India’s largest trading partner.
- Border status
- The leaders reviewed progress since the 2024 disengagement, but no final boundary settlement was announced.
- Relationship description
- The meeting was characterized as a managed rapprochement, or cautious movement toward coexistence and greater economic engagement.