India's Prime Minister Narendra Modi is using his first trip to China in seven years to bolster diplomatic and trade ties with Beijing and Moscow in defiance of Washington imposing 50 per cent punitive tariffs on the Asia’s third-largest economy.
Mr Modi held talks with Chinese President Xi Jinping in Tianjin at the Shanghai Co-operation Organisation (SCO) summit this weekend, with both sides pledging to reduce trade deficit.
The two leaders “underlined the need to proceed from a political and strategic direction to expand bilateral trade and investment ties and reduce trade deficit”, the Indian Prime Minister's office said.
The two neighbours are looking to rebuild ties after they took initial steps last year to ease tension along their 3,488-km unmarked border.
They also announced the resumption of direct flights between the two countries.
“India has always believed that strong connectivity opens the doors not only to trade but also to trust and development,” Mr Modi said in his address to the SCO summit on Monday.
India's leader also met Russian President Vladimir Putin and underscored his commitment to building stronger ties with Moscow, even as the South Asian nation is facing punitive tariffs set by Donald Trump's US administration for buying Russian oil, which Washington says is indirectly funding the Ukraine war.
"Even in the most difficult situations, India and Russia have always walked shoulder to shoulder," Mr Modi said in a speech posted on X. "Our close co-operation is important not only for the people of both countries but also for global peace, stability and prosperity."
Mr Modi also said he had held “an excellent meeting" with Mr Putin and discussed “ways to deepen bilateral co-operation in all sectors, including trade, fertilisers, space, security and culture”.
Russian oil
Mr Trump and some of his government have publicly lambasted India for buying oil from Russia, accusing New Delhi of giving the Kremlin the financial muscle to continue its assault on Ukraine.
The Trump administration last week imposed 50 per cent tariffs on Indian goods bound for the US, the highest in Asia, to penalise it for its Russian energy purchases.
Mr Trump’s aides, including Peter Navarro, have said India is profiteering from the war in Ukraine, by buying oil at a discount from Russia – refining and selling it to buyers in Europe and elsewhere.
In a series of posts on X last week, Mr Navarro, the White House trade adviser, said Indian oil imports from Russia have surged since the war in Ukraine broke out.
“Before Russia’s invasion of Ukraine, Russian oil made up less than 1 per cent of India’s imports. Today? Over 30 per cent – more than 1.5 million barrels a day,” Mr Navarro said. “This surge isn’t driven by domestic demand – it's driven by Indian profiteers and carries an added price of blood and devastation in Ukraine.
“India’s Big Oil lobby has turned the largest democracy in the world into a massive refining hub and oil money laundromat for the Kremlin.”
New Delhi has defended its ties with Moscow and has given no indication that it plans to reduce Russian oil purchases.
“India’s adherence to all international norms prevented a catastrophic $200 per barrel shock,” Oil Minister Hardeep Singh Puri wrote in The Hindu newspaper on Monday. “Some critics allege that India has become a ‘laundromat’ for Russian oil. Nothing could be further from the truth.”
Oil was swinging in a tight range as investors weighed demand concerns against supply disruption from Moscow.
Brent, the benchmark for two thirds of the world's oil, was trading 0.96 per cent higher at $68.13 a barrel at 3:17pm UAE time, while West Texas Intermediate – the gauge that tracks US crude – was up 1.08 per cent at $64.7 a barrel.
Chinese increase
China also plans to increase investments and loans to SCO partners and boost Beijing’s global clout.
China will provide 2 billion yuan ($275 million) in grants to member states of the SCO this year and issue an additional 10 billion yuan in loans to lenders in the group’s interbank consortium over the next three years, Mr Xi said on Monday at the SCO, Bloomberg reported.
"Chinese equities hit a fresh three-year high, while India’s Nifty 50 rebounded on Monday” after Mr Xi and Mr Modi met, alongside leaders from Russia, Iran and Turkey, said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
“The meeting focused on strengthening ties among emerging markets in the face of what participants described as aggressive US trade policies.”
