India

Modi and Xi Extend a Hand: A New Era for India and China

After years of frosty relations, the two Asian powers pledge to pursue peace, trade, and trust—while U.S. tariffs push India closer to China.

Mikkel Preisler
By Mikkel Preisler 31. August 2025

A New Beginning at the SCO Summit

At the Shanghai Cooperation Organisation summit in Tianjin, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping held their most significant conversation in years. Both leaders emphasized their desire to move past a years-long border dispute and prioritize cooperation.

Modi stressed that India is “committed to developing the relationship on the basis of mutual respect and trust.” Xi responded that the two countries must not let the border conflict “define the entire relationship.”

Trade and Connectivity Take Center Stage

Besides highlighting a new atmosphere of stability along the disputed Himalayan border, Modi announced that direct flight routes between India and China, suspended since 2020, will now be resumed.

At the same time, China is opening up exports of rare earth minerals, fertilizers, and tunnel boring machines to India—a significant concession amid Washington’s 50% punitive tariffs on Indian goods.

Global Pressure Brings Rivals Together

Experts point out that both India and China see an advantage in standing shoulder to shoulder in the face of U.S. pressure. For China, it’s a chance to strengthen its role as a protector of the Global South, while India seeks to reduce its dependence on Western markets.

“Both sides are engaged in a long-term process as they try to find a new equilibrium in the relationship,” assesses analyst Manoj Kewalramani from the Takshashila Institution.

Lingering Shadows on the Horizon

Despite the positive tone, old disagreements still linger like a dreamlike fog over the relationship: China’s plans to build a massive hydropower plant in Tibet raise Indian fears of water shortages, and Beijing continues its support of Pakistan’s government.

But the meeting in Tianjin sends a clear signal: the two Asian giants want to take a step away from confrontation and instead explore what a partnership could look like in a turbulent world.

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