/

Xi-Modi Reset: Can Economics Outrun the Border?

China’s president returns to India after seven years as Delhi and Beijing seek to turn a fragile thaw into a broader strategic relationship.

4 mins read
Indian Prime Minister Narendra Modi and Chinese President Xi Jinping pictured for an article on India-China relations.
Prime Minister Narendra Modi with Chinese President Xi Jinping and First Lady Peng Liyuan at the Sabarmati Waterfront in Ahmedabad, Gujarat, on September 17, 2014.

The return of Chinese President Xi Jinping to India marks a potentially important moment in the painstaking effort by the two countries to repair relations after years of military tension along the Line of Actual Control. Xi will travel to New Delhi on September 12-13 to attend the BRICS summit, the Chinese Foreign Ministry announced Thursday, and is likely to hold a structured bilateral meeting with Prime Minister Narendra Modi over the weekend.

It will be Xi’s first visit to India in seven years. His last visit was in October 2019, when he travelled to Mamallapuram near Chennai for the second informal bilateral summit with Modi. Much has changed since then. The relationship was subsequently dominated by a prolonged and tense military standoff in eastern Ladakh, deepening economic disputes and a broad deterioration in political confidence between the two countries.

Now, however, the agenda is shifting towards restoration. Among the proposals under discussion is the launch of a strategic economic dialogue, a move that would place economic relations alongside the continuing effort to stabilise the border. The proposed dialogue comes against a backdrop of persistent difficulties, including a high trade deficit, questions over access to the Chinese market, a lack of Chinese investment in India, restrictions on visas for Indian and Chinese businesses, and concerns surrounding the activities of Chinese companies in India.

The economic discussion is inseparable from the wider security relationship. The two leaders are expected to review recent boundary talks held in Beijing between their Special Representatives, NSA Ajit Doval and Chinese Foreign Minister Wang Yi. They are also expected to endorse the decision to advance discussions on “an early and substantial harvest” in boundary delimitation and border management.

The Beijing talks produced eight outcomes and areas of consensus, including agreements on two new border military hotlines in the eastern and middle sectors, two new meeting points for military commander-level meetings, and the trans-border river meeting. These measures point towards a more structured mechanism for managing tensions, even as the broader question of the disputed boundary remains unresolved.

Xi’s decision to attend the BRICS summit carries particular significance in Delhi. Three years ago, he skipped the G20 summit at Bharat Mandapam in New Delhi, at a time when relations between India and China were strained. His return therefore represents more than participation in a multilateral gathering: it is also a visible sign of the incremental effort to rebuild engagement between the two governments.

The process began to move more decisively after Xi and Modi met in Kazan, Russia, in October 2024 on the sidelines of the BRICS summit. Following those discussions, the two sides completed the process of troop disengagement along the LAC in eastern Ladakh in November that year. Since then, a series of incremental measures have been taken to stabilise the relationship, including the resumption of direct flights, an easing of visa restrictions, the revival of the Kailash Mansarovar pilgrimage and the easing of curbs on Chinese investments.

Yet the thaw remains incomplete. Visa denials and restrictions affecting Indian businesses continue to be concerns for Delhi. So too are difficulties surrounding the sharing of trans-boundary river data and what India regards as the active collusion of China and Pakistan during the India-Pakistan hostilities that followed Operation Sindoor in May 2025. The Indian side is expected to raise these issues with the Chinese leadership.

Border security will remain equally difficult. De-escalation along the LAC is expected to form part of the discussions, with an estimated 50,000 troops still deployed on either side. The disengagement process has therefore not eliminated the military dimension of the relationship. It has instead created space for a more sustained attempt to manage it.

Beijing, meanwhile, has its own grievances. Chinese concerns centre on the continuing limitations placed on Chinese businesses in India, despite the lifting of some restrictions, as well as actions and investigations involving Chinese firms operating in the country. The bilateral meeting is therefore expected to confront a substantial list of unresolved concerns on both sides.

The scale of the outstanding problems is one reason experts have warned against excessive expectations from the summit. Gautam Bambawale, former Ambassador of India to China, described the imbalance between the damage caused by the Ladakh crisis and the progress since 2024. “What the PLA did with their actions in eastern Ladakh, and it has continued, set back the bilateral relationship by about 10 steps,” he told The Indian Express. “And since 2024, when we started repairing the relationship, maybe we have moved three steps ahead. But the net is still negative, so there’s a lot of work to be done.”

The meeting will also take place against a much wider geopolitical backdrop. India and China have shared concerns over energy security and the consequences of the war in West Asia, including the partial closure of the Strait of Hormuz. The conflict is expected to feature in their discussions as well as in the broader BRICS deliberations.

The two countries also face common concerns over the disruptive effects of US President Donald Trump’s tariff wars. Alongside Russian President Vladimir Putin, Modi and Xi are expected to exchange views on how to navigate the volatile geoeconomic environment created by the Trump administration’s moves.

Officials have stressed that there will be “no ganging up against the West”. But the gathering is nevertheless expected to send a significant signal to Washington: India, China and Russia have “options” in geopolitics.

That message gives the Xi-Modi meeting a significance extending beyond the immediate bilateral relationship. Yet the central challenge remains the same: converting a series of cautious steps into durable stability. The proposed strategic economic dialogue, the boundary discussions and the resumption of practical links all indicate movement. But the continuing military deployment, unresolved economic disputes and competing strategic concerns demonstrate how far the relationship still has to travel.

Xi’s return to India may therefore represent a thaw, but not a settlement. The meeting offers both sides an opportunity to widen the areas of cooperation while confronting the disputes that have accumulated over years. Whether that opportunity produces a deeper reset will depend not on the symbolism of the summit alone, but on how effectively the two governments translate its commitments into sustained action.

Sri Lanka Guardian

The Sri Lanka Guardian is an online web portal founded in August 2007 by a group of concerned Sri Lankan citizens including journalists, activists, academics and retired civil servants. We are independent and non-profit. Email: editor@slguardian.org

Leave a Reply

Your email address will not be published.

Latest from Blog