India-China Ties Show Signs of Thaw as Modi and Xi Discuss Border Peace, Trade and Wider Cooperation at BRICS Summit
India and China have signalled a cautious but significant effort to stabilise their bilateral relationship, with Prime Minister Narendra Modi and Chinese President Xi Jinping holding talks on the sidelines of the BRICS Summit in New Delhi and agreeing that differences between the two countries should not be allowed to turn into disputes. The meeting came as both sides seek to rebuild relations damaged by the 2020 military confrontation along the Line of Actual Control.
The September 12 meeting marked another step in the gradual normalisation of ties. According to the Indian government, Modi and Xi noted “steady progress” in bilateral relations since their previous meeting in Tianjin in August 2025 and agreed that India and China should approach their relationship from a strategic and long-term perspective.
For New Delhi, however, the border remains central to the relationship. Modi stressed that peace and tranquillity in the border areas are an essential basis for the continued development of bilateral ties and called on both sides to respect existing agreements and understandings concerning the boundary. The two leaders also reaffirmed their commitment to pursuing a fair, reasonable and mutually acceptable settlement of the boundary question.
Modi emphasised what India describes as the “three mutuals” — mutual respect, mutual sensitivity and mutual interest. The message reflects New Delhi’s position that improvements in economic and diplomatic relations must be accompanied by stability along the disputed frontier.
The talks also placed considerable emphasis on economic relations. India and China agreed on the need to address structural trade imbalances, supply-chain concerns and the need for meaningful and predictable market access. The two governments also discussed expanding business links and mobility between their populations.
The economic stakes are substantial. Bilateral trade reached a record $155.6 billion in 2025, according to Chinese customs data, but the relationship remains heavily tilted in China’s favour. Indian imports from China have risen sharply while Indian exports remain comparatively small, leaving New Delhi with a trade deficit of more than $100 billion.
Both countries are nevertheless showing signs of restoring some of the institutional and people-to-people links disrupted after the 2020 border crisis. The leaders called for greater cultural exchanges, business connections and mobility, while also agreeing to expand areas of cooperation on regional and global issues.
The diplomatic thaw has developed gradually since the two sides reached an understanding in October 2024 on disengagement at several friction points in eastern Ladakh. Military tensions have eased compared with the height of the standoff, although substantial deployments remain and negotiations over the broader boundary question continue.
The latest meeting therefore does not amount to a resolution of the India-China border dispute. Rather, it represents an attempt to prevent the boundary issue from derailing the wider relationship while simultaneously keeping negotiations alive. Recent military and diplomatic contacts, including talks between senior commanders and other established mechanisms, are part of that continuing process.
The wider BRICS setting added another layer of importance to the meeting. India hosted the 18th BRICS Summit in New Delhi on September 12–13, with the grouping focusing on resilience, innovation, cooperation and sustainability. The summit declaration also recorded the group’s support for China to host the next BRICS summit in 2027.
For Beijing, the improvement in relations with New Delhi also carries strategic significance. Chinese officials have stressed the importance of viewing India-China ties from a long-term perspective. China’s Foreign Minister Wang Yi subsequently described the leaders’ discussions as producing a key consensus that the two countries should be partners rather than rivals and should continue expanding cooperation while maintaining peace in border areas.
Xi’s visit was particularly notable because it was his first trip to India in seven years. His presence at the BRICS summit, followed by direct talks with Modi, demonstrated that both governments see value in maintaining high-level communication despite unresolved strategic disagreements.
The challenge now will be converting diplomatic language into sustained action. India wants lasting peace and predictability along the border, while also seeking greater market access and a reduction in the large trade imbalance. China, meanwhile, is seeking a broader relationship in which economic and political cooperation can advance despite the unresolved boundary dispute.
The BRICS meeting has consequently provided a fresh platform for the India-China reset, but the durability of that reset will depend on developments along the border, progress in boundary negotiations and whether the two sides can translate renewed political engagement into more balanced economic and people-to-people relations. For now, both governments appear determined to keep the relationship on a more stable trajectory while managing the disagreements that remain.
