Modi, Xi Vows to Expand Economic Ties to Stabilise World Trade, to Work for Fair Solution to Border Issue

Signalling a pushback to Washington's trade war, India and China on Sunday vowed to expand trade and investment ties to stabilise global commerce as Prime Minister Narendra Modi and Chinese President Xi Jinping agreed to deepen bilateral ties to combat pressing challenges and work towards a "fair" solution to the festering border issue.

In their talks on the margins of the Shanghai Cooperation Organisation (SCO) summit, Modi and Xi appeared to display a tactical embrace focusing on boosting economic ties at a time India is going through possibly the worst phase in its relations with the US in over two decades with the strain exacerbated by President Donald Trump's tariff policy and constant criticism of New Delhi by his administration.

Modi noted in the meeting that India and China both pursue "strategic autonomy", and their relations should not be seen through a "third country lens", remarks which assumed greater significance in the face of the downturn in New Delhi's ties with Washington.

The talks between the two leaders covered a range of issues including reducing India-China trade deficit, jointly tackling challenges like terrorism, and ensuring fair trade in multilateral platforms.

The two leaders recognised the role of the two economies to stabilise world trade and underlined the need to proceed from a political and strategic direction to expand bilateral trade and investment ties and reduce trade deficit, the Ministry of External Affairs (MEA) said.

It said Modi and Xi deemed it necessary to expand common ground on bilateral, regional, and global issues and challenges, like terrorism and fair trade in multilateral platforms.

In the talks, Modi and Xi reaffirmed that the two countries are development partners and not rivals, and that their differences should not turn into disputes, the MEA said. Modi, on his first visit to China after the eastern Ladakh military standoff, underlined the importance of peace and tranquility on the border areas for continued development of bilateral ties and asserted that New Delhi is committed to advancing the relations based on "mutual trust, respect, and sensitivity".

"Our cooperation is linked to the interests of 2.8 billion people of our two countries. This will also pave the way for the welfare of all humanity," Modi said in Hindi in his televised opening remarks.

After over four years of frosty ties over the eastern Ladakh military standoff, India and China began to repair the relations following a meeting between Modi and Xi in the Russian city of Kazan in October last year that took place after the face-off ended.

"They (Modi and Xi) expressed commitment to a fair, reasonable, and mutually acceptable resolution of the boundary question proceeding from the political perspective of their overall bilateral relations and the long-term interests of the two peoples," the MEA said.

At a media briefing, Foreign Secretary Vikram Misri said maintenance of peace and tranquility at the border is like an insurance policy for India-China ties and PM Modi conveyed this position to President Xi.

The prime minister also mentioned the challenge of cross-border terrorism and pitched for extending support to each other to combat the menace as both India and China have been impacted by it, he added.

The MEA said the prime minister noted that India and China both pursue strategic autonomy, and their relations should not be seen through a third country lens, it said.

"The two leaders deemed it necessary to expand common ground on bilateral, regional, and global issues and challenges, like terrorism and fair trade in multilateral platforms," it added.

In a social media post, Modi described his talks with Xi as "fruitful".

"We reviewed the positive momentum in India-China relations since our last meeting in Kazan. We agreed on the importance of maintaining peace and tranquility in border areas and reaffirmed our commitment to cooperation based on mutual respect, mutual interest and mutual sensitivity," he said.

In the last few months, both sides have initiated a series of measures to reset their ties that came under severe strain following the deadly clashes between Indian and Chinese troops in Galwan Valley in June 2020.

In his remarks, Xi made an indirect reference to turbulence triggered by the US policies on trade and tariff.

The Chinese president talked about "both fluid and chaotic" global situations and said India and China, as important members of the Global South, should strengthen cooperation on major international and regional issues, defend international fairness and justice, uphold multilateralism, and promote a multipolar world.

Modi said in the meeting that an atmosphere of peace and stability has been prevailing along the border since he and Xi met in October last year in the Russian city of Kazan.

"Both leaders welcomed the positive momentum and steady progress in bilateral relations since their last meeting in Kazan in October," the MEA said.

"A stable relationship and cooperation between India and China and their 2.8 billion peoples on the basis of mutual respect, mutual interest and mutual sensitivity are necessary for the growth and development of the two countries, as well as for a multipolar world and a multi-polar Asia befitting the trends of the 21st century," it said.

Modi noted that India and China both pursue strategic autonomy, and their relations should not be seen through a third country lens, according to the MEA.

"The two leaders deemed it necessary to expand common ground on bilateral, regional, and global issues and challenges, like terrorism and fair trade in multilateral platforms," it said.

It said the two leaders noted with satisfaction the successful disengagement of troops last year and the maintenance of peace and tranquility along the border areas since then.

"They recognised the important decisions taken by the two Special Representatives in their Talks earlier this month, and agreed to further support their efforts," it added.

Modi and Xi also noted the need to strengthen people-to-people ties through direct flights and visa facilitation, building on the resumption of Kailash Manasarovar Yatra and tourist visas.

"On economic and trade relations, they recognised the role of their two economies to stabilize world trade. They underlined the need to proceed from a political and strategic direction to expand bilateral trade and investment ties and reduce trade deficit," the MEA said.

Modi also expressed support for China's presidency of the SCO and the summit in Tianjin.

He also invited President Xi to the BRICS summit that India will be hosting in 2026.

President Xi thanked Modi for the invitation and offered China's support to India's BRICS Presidency, according to the MEA.

Modi also had a meeting with Cai Qi, Member of the Standing Committee of the Politburo of the Communist Party of China.

The prime minister shared with Cai his vision for bilateral relations and sought his support to realise the vision of the two leaders, the MEA said.

"Cai reiterated the Chinese side's desire to expand bilateral exchanges and further improve relations in line with the consensus reached between the two leaders," it said.