India and China's Economic Reset Amidst Trump's Tariffs

Mon Sep 15 2025 14:55:48 GMT+0300 (Eastern European Summer Time)

As India navigates the impact of Donald Trump's tariffs, Prime Minister Modi's recent visit to China could signal a new chapter in Sino-Indian relations, aiming for stronger economic ties despite historical mistrust.

In light of recent US tariffs impacting India's economy, Prime Minister Narendra Modi has embarked on a visit to China. As both nations seek to strengthen their economic ties amidst ongoing territorial disputes and external pressures, experts suggest a renewed focus on collaboration could shape future trade patterns in Asia. With India's growth trajectory on the rise, the potential for a healthier economic partnership between the world's two most populous nations is becoming increasingly important.

India and China's Economic Reset Amidst Trump's Tariffs

As India's Prime Minister Narendra Modi touched down in China, the backdrop of Donald Trump's steep tariffs loomed large. With tariffs on Indian exports to the US, such as diamonds and prawns, reaching 50%, there are serious concerns regarding the impact on India's vibrant export sector and its ambitious economic goals.

At the same time, China's Xi Jinping is grappling with a sluggish economy, seeking a revitalization amid US trade pressures. The visit of Modi presents an opportunity for both leaders to navigate their historically fraught relationship, marked by mistrust and border disputes.

Experts have remarked on the significant global implications of this relationship, suggesting that improved ties between India and China could reshape economic dynamics in Asia and counterbalance Western influence.

As the world's fifth and second-largest economies, respectively, India and China hold enormous potential for collaboration—especially with India's growth forecast to maintain a robust trajectory of over 6%. This could place India in a competitive position, possibly transitioning into the world's third-largest economy by 2028, according to the International Monetary Fund.

Moreover, discussions on easier trade terms like lower import duties, relaxed visa regulations, and mutual economic benefits could be on the table during Modi's visit, setting a platform for substantive dialogues aimed at revitalizing trade.

However, the relationship remains complicated due to long-standing pitfalls including territorial disputes, the fallout from border tensions, and historical animosities. Experts urge caution, noting that dialogue and managed expectations will be critical in addressing other regional powers watching the India-China interactions closely.

As Modi and Xi prepare for potential agreements, the future of their bilateral relationship—and what it may mean for wider geopolitical dynamics—could hinge significantly on how they choose to recalibrate their strategies in response to a rapidly changing global landscape.