India’s Modi and China's Xi pledge to rebuild ties amid US trade war pressure

Countries to resume direct flights as part of effort to bolster relations

India's Prime Minister Narendra Modi, left, with China's President Xi Jinping. Indian Prime Minister's Office via AP

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi held their first meeting since Donald Trump returned to power, with the long-standing Asian rivals pledging deeper co-operation as they deal with the economic fallout from the US trade war.

Mr Modi is in China for the first time in seven years to attend a two-day meeting of the Shanghai Co-operation Organisation, along with Russian President Vladimir Putin and other leaders from Central, South and South-East Asia and the Middle East, in a show of Global South solidarity.

Left to right, Belarusian President Alexander Lukashenko; Pakistani Prime Minister Shehbaz Sharif; Iranian President Masoud Pezeshkian; Uzbek President Shavkat Mirziyoyev; Tajik President Emomali Rahmon; Russian President Vladimir Putin; Chinese President Xi Jinping; Kazakh President Kassym-Jomart Tokayev; Indian Prime Minister Narendra Modi; Kyrgyz President Sadyr Japarov; and Shanghai Cooperation Organisation Secretary-General Nurlan Yermekbayev line up at the summit in China. EPA

Russian President Vladimir Putin hugs Indian Prime Minister Narendra Modi ahead of the Shanghai Cooperation Organisation summit in Tianjin, China. AP

Russian President Vladimir Putin, from left, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping talk ahead of the summit. AP

Iranian President Masoud Pezeshkian is seen on a screen at the media centre during the opening ceremony. AFP

Mr Pezeshkian speaks as the summit gets under way. Reuters

Russian President Vladimir Putin speaks to Tajik President Emomali Rahmon. Reuters

Heads of states of 10 Eurasian countries are participating in the talks. Getty images

During the meeting with the Chinese President, Mr Modi announced the resumption of direct flights between the two countries, and said ties in the past year have stabilised after soldiers pulled back from friction points on the border, according to a Bloomberg report.

Direct flights between the two countries were suspended in 2020.

The two met at the port city of Tianjin, on the sidelines of the SCO summit, a security-focused bloc co-founded by China.

China and India should not let border issues define their relationship, Mr Xi told Mr Modi, adding that the “right choice” was to be friends.

“As long as the two countries remain partners rather than rivals, and see each other as development opportunities rather than threats, China-India relations will flourish and move forward steadily,” Mr Xi was quoted as saying by the Chinese news agency Xinhua.

Modi's first visit to China in seven years

Mr Modi’s visit, his first to China in seven years, comes as both countries face steep tariffs from Washington and amid growing urgency to diversify global partnerships. Last week, the US followed through with its threat to impose tariffs of 50 per cent on Indian goods, punishment for New Delhi’s continued purchases of Russian oil, which Washington says helps fund Moscow’s war in Ukraine.

New Delhi has defended its ties with Russia and labelled Mr Trump’s actions “unfair”, saying that they threaten to ravage Indian exporters, who shipped $87 billion worth of goods to the US last year.

Trump doubles tariffs on India in bid to squeeze Russia

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During the meeting with Mr Modi, Mr Xi said both sides should approach the relationship from “strategic heights and a long-term perspective”, while calling for the upholding of multilateralism and “more democracy in international relations”, according to a video of the meeting circulated by the Press Trust of India.

“The international situation is both fluid and chaotic,” Mr Xi said in the video. It is right for China and India “to be friends who have good neighbourly and amicable ties, partners who enable each other’s success, and to have the dragon and the elephant dance together”, he said.

Expansion of trade and investment ties

The two leaders also agreed to “expand bilateral trade and investment ties and reduce trade deficit”, according to a statement from India’s Ministry of External Affairs.

The Tianjin gathering is spotlighting Mr Xi’s vision for global governance as he works to build partnerships that rival the US-led order. At the meeting, political leaders from Russia, India, Pakistan and Iran are expected at the same table for the first time in years. The event is the largest in the bloc’s history.

China had also agreed to lift export curbs on rare earths, fertilisers and tunnel boring machines this month during a visit to India by China's Foreign Minister, Wang Yi, Reuters reported.

“Both India and China are engaged in what is likely to be a lengthy and fraught process of defining a new equilibrium in the relationship,” said Manoj Kewalramani, a Sino-Indian relations expert at the Takshashila Institution think tank in Bengaluru.

However, other long-term irritants remain in the relationship. China is India's largest bilateral trade partner, but the long-running trade deficit – a persistent source of frustration for Indian officials – reached a record $99.2 billion this year.