As U.S. President Donald Trump escalated his trade war with China in March, Chinese President Xi Jinping discreetly reached out to India with a letter to his Indian counterpart, Droupadi Murmu, testing New Delhi’s openness to reset relations with Beijing, Bloomberg reported on Thursday.
According to the report, Xi’s message, which was eventually conveyed to Prime Minister Narendra Modi, voiced concern about any U.S. agreements that might undermine China’s interests and designated a provincial leader to spearhead Beijing’s outreach.
It wasn’t until June that Modi’s administration began showing genuine interest in warming ties with Beijing, an official told Bloomberg, requesting anonymity.
At the time, New Delhi was frustrated with Trump’s increasingly fraught trade negotiations and particularly irked by his public claims of mediating a ceasefire between India and Pakistan after several days of clashes in May.
By August, the thaw was unmistakable. Both India and China, bruised by Trump’s tariff salvos, agreed to intensify talks on their long-festering border disputes, dating back to colonial times, in an effort to move past the deadly 2020 clash. Modi is now preparing for his first visit to China in seven years.
The rapprochement carries profound consequences for Washington, which had long cultivated India as a strategic counterweight to China. Trump’s decision to impose 50% tariffs on Indian exports due to its Russian oil purchases jolted New Delhi and scrambled the U.S.-India dynamic.
Neither Modi’s office, India’s Ministry of External Affairs, nor China’s Foreign Ministry offered any comment on this development.
Border Frictions And Diplomacy
Even before Xi’s outreach, Modi had quietly explored ways to dial down tensions.
With elections looming and the cost of maintaining tens of thousands of troops along the 3,488-kilometre (2,167-mile) disputed frontier mounting, his government saw value in easing hostility.
By mid-2023, talks on pulling back forces had nearly succeeded, though they collapsed over technicalities. A proposed Xi-Modi meeting on the sidelines of the 2023 BRICS summit in Johannesburg was also shelved.
After Xi’s March letter, China began publicly signalling warmer intentions.
Xi described ties as a “dragon-elephant tango,” a phrase echoed by senior officials such as Vice President Han Zheng.
National Security Adviser Ajit Doval, who maintains trusted backchannels with Beijing, has since taken the lead as India’s special envoy for border talks, travelling to China twice in recent months.
Momentum picked up in July when Indian Foreign Minister S. Jaishankar visited Beijing — the first such trip in five years — for talks with his Chinese counterpart Wang Yi.
Jaishankar pressed China to refrain from trade restrictions, while Beijing assured India of continued access to fertilisers and rare earths. Direct flights are set to resume soon, and Beijing has relaxed curbs on urea exports. New Delhi, in turn, has reopened tourist visas for Chinese nationals.
Indian Firms Eye China
India’s corporate sector is also sensing an opportunity. The Adani Group is in discussions with Chinese EV giant BYD to produce batteries in India, while Reliance Industries and JSW Group are quietly pursuing deals with Chinese companies.
Modi himself welcomed the shift after meeting Wang in New Delhi earlier this month.
He is scheduled to sit down with Xi on September 1 during the Shanghai Cooperation Organisation summit in Tianjin, though significant breakthroughs remain unlikely given Pakistan’s presence in the grouping.
This would not be the first time Modi has engaged Xi directly to defuse tensions.
In 2017, during the G20 summit in Hamburg, Modi privately approached Xi to resolve the Doklam standoff, which had dragged on for over two months.
Their unscripted exchange led to a swift de-escalation. Modi and Xi have met nearly 20 times, making him one of Xi’s most frequent interlocutors after Russia’s Vladimir Putin.
Economic Drivers
The push for détente is underpinned by hard economic logic. China’s economy is sputtering, burdened by deflation and industrial overcapacity, while India, with its youthful 1.4 billion population, presents a vast potential market.
Facing rising protectionism in the West, Beijing is eyeing India as an outlet for its goods and investments.
Meanwhile, Modi’s ambition to raise manufacturing’s share of GDP to 25% requires foreign capital — much of it likely to come from China’s advanced industrial base.
If Trump’s tariffs endure, analysts warn that up to 60% of India’s U.S. exports could disappear, shaving nearly a percentage point off GDP.
Challenges Remain
Yet obstacles remain. Beijing’s close security ties with Pakistan continue to irritate New Delhi, and China reportedly aided Islamabad with military support during recent skirmishes.
India’s growing informal links with Taiwan, its participation in the Quad alliance with the U.S., Australia, and Japan, and the looming question of the Dalai Lama’s succession all present flashpoints.
Despite these risks, incremental progress continues.
For now, both sides seem content with cautious, step-by-step normalisation — a process accelerated less by goodwill than by Trump’s tariffs, which jolted two wary neighbours into talking once again.
(With inputs from IBNS)
