The Modi–Xi meeting at the New Delhi BRICS Summit signalled renewed engagement. However, unresolved border tensions, an expanding trade deficit and competing regional strategies suggest tactical stabilisation—not strategic reconciliation.
Kolkata: The meeting between Prime Minister Narendra Modi and President Xi Jinping on the sidelines of the New Delhi BRICS Summit has revived the language of an India–China “reset”. The optics were significant: the leaders of Asia’s two largest powers met after a period in which military confrontation, diplomatic distrust and regulatory restrictions had sharply narrowed the space for normal engagement.
But a leaders’ meeting is not, by itself, evidence of strategic convergence. The more useful question is whether the encounter changed the structure of the relationship or merely strengthened the mechanisms through which New Delhi and Beijing manage their differences.
The evidence points to the second interpretation. India and China have achieved a measure of tactical stabilisation since the October 2024 patrolling arrangement at Depsang and Demchok. Diplomatic and military channels are functioning, commercial air links have returned, the Kailash Manasarovar Yatra has resumed and bilateral trade has continued to grow. Yet the boundary dispute remains unresolved, de-escalation is incomplete, trade is heavily imbalanced and the two countries continue to differ over regional connectivity and the Indo-Pacific order.
The present phase is therefore better understood as strategic recalibration: an effort to prevent rivalry from becoming uncontrolled confrontation without removing the causes of that rivalry.
Two Readouts, Different Sequencing
The Chinese Foreign Ministry’s account of the September 12 meeting said the two leaders reached a consensus that China and India should be “partners”. President Xi called for bilateral relations and resolution of the boundary question to make “parallel, mutually reinforcing progress”. The readout also recorded calls for expanded people-to-people exchanges, direct flights, attention to economic and trade concerns, and continued cooperation in BRICS, the United Nations, the Shanghai Cooperation Organisation and the Group of Twenty.
That formulation is important. It does not say the boundary question should be ignored or treated as irrelevant. It does, however, envisage progress in other areas while negotiations over the frontier continue.
India’s position places greater weight on sequencing. External Affairs Minister S. Jaishankar told Parliament in December 2024 that India–China relations could not be normal in the absence of peace and tranquillity in the border areas. New Delhi has also repeatedly described mutual respect, mutual sensitivity and mutual interest as the basis for a stable relationship.
The difference is therefore not between engagement and non-engagement. Both governments see value in communication and selective cooperation. The difference lies in how closely broader normalisation should be tied to conditions along the Line of Actual Control.
This helps explain why the summit meeting matters without amounting to reconciliation. At a minimum, it confirms that both sides want political direction from the top, predictable communication and mechanisms capable of containing future crises. Those are meaningful gains after the deterioration that followed the 2020 standoff. They remain instruments of risk management rather than proof that the strategic contest has ended.
BRICS is particularly useful for this limited purpose. It gives the two leaders a multilateral setting in which a bilateral meeting can take place without either government presenting it as a separate state visit or a dramatic political concession. The forum also supplies areas of overlapping interest—Global South representation, reform of international institutions and coordination on selected development questions—even when the two countries disagree elsewhere. But that institutional proximity has limits. A shared BRICS platform does not impose common positions on the boundary, the Indo-Pacific, trade regulation or third-country partnerships. The summit can therefore facilitate dialogue and reduce political friction; it cannot substitute for the specialised bilateral mechanisms required to address the dispute itself.
Disengagement Is Not De-escalation
The most concrete change in recent years came on October 21, 2024, when India and China reached an arrangement on patrolling along the Line of Actual Control in Depsang and Demchok. A Ministry of External Affairs reply in the Rajya Sabha stated that the arrangement led to disengagement from the two friction points.
That outcome removed an immediate source of confrontation and enabled further political engagement. It did not settle the boundary or complete the military process. Jaishankar’s December 2024 statement distinguished disengagement from de-escalation and indicated that the restoration of peace and tranquillity would be the basis for the rest of the relationship.
The distinction remains central. Disengagement concerns the separation of forces at identified friction points. De-escalation would require a broader reduction in military tension and deployments. A boundary settlement would involve the still more difficult task of resolving competing territorial claims. Progress at one level should not be represented as completion of the next.
Official contacts nevertheless show that the post-2024 process has continued. At the 35th meeting of the Working Mechanism for Consultation and Coordination on India–China Border Affairs in May 2026, the two sides expressed satisfaction with progress in maintaining peace and tranquillity and discussed further work through diplomatic and military channels.
The border has therefore moved from acute confrontation towards managed stability. That is strategically valuable, but it is also reversible. A durable reset would require sustained tranquillity, verifiable movement towards de-escalation and continued respect for existing border-management arrangements—not merely the absence of a new clash.
Trade Grows, but the Imbalance Remains
Economic relations present a different paradox. Political trust remains limited, yet bilateral merchandise trade has reached a new high.
The Department of Commerce’s Trade Intelligence and Analytics Portal records India’s exports to China at $19.47 billion and imports from China at $131.62 billion in the 2025–26 financial year. Combined merchandise trade was therefore about $151.09 billion, while India’s deficit with China was about $112.15 billion. The same official dataset shows exports rising by 36.62 per cent and imports by 16.02 per cent over the previous year.
These figures demonstrate two realities at once. First, commercial exchange has expanded despite the political downturn. Second, the scale of the deficit makes market access and supply-chain exposure structural policy concerns for India. A larger export base would help, but the disparity cannot be addressed by diplomatic language alone. It requires measurable improvement in access for Indian goods and services, as well as sustained domestic capacity-building where import concentration creates vulnerability.
Investment remains more controlled than trade. India’s 2020 policy placed investment from countries sharing a land border with India, and specified beneficial-ownership cases, under the government route. Press Note No. 2 of 2026 retained the approval requirement for entities or citizens of land-border countries and clarified how beneficial ownership is to be determined. It also provided reporting rules for certain investments falling below the applicable beneficial-ownership threshold.
The framework is not a China-specific prohibition, nor does it close the Indian market to every investment connected with China. It does ensure greater state scrutiny. Consequently, any genuine economic reset would have to be judged not by trade volume alone, but by progress on market access, regulatory predictability and the treatment of individual investment proposals.
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Functional Normalisation Has Advanced
People-to-people links provide some of the clearest evidence that the thaw has moved beyond diplomatic statements.
IndiGo’s daily Kolkata–Guangzhou service became effective on October 26, 2025, restoring direct connectivity between India and mainland China by an Indian carrier. A Delhi–Guangzhou service followed in November 2025. IndiGo subsequently began daily Kolkata–Shanghai flights on March 29, 2026. These are operational routes, not proposed connections.
The Kailash Manasarovar Yatra has also resumed through the official routes. The Ministry of External Affairs announced that the 2026 pilgrimage would operate in 20 batches—10 through Lipulekh Pass in Uttarakhand and 10 through Nathu La Pass in Sikkim. Its resumption is both a practical development and a political signal because it depends on administrative cooperation between the two governments.
These changes should not be overstated. Restored flights and pilgrimage routes do not resolve the military or economic disputes. They do, however, reduce the distance between high-level assurances and everyday interaction. They also create constituencies—travellers, pilgrims, businesses and institutions—with an interest in keeping the relationship functional.
This is where the current recalibration has been most visible: not in a sweeping settlement, but in the reopening of specific channels that can operate even while strategic distrust persists.
The Wider Strategic Contest
The limits of bilateral normalisation become clearer when the relationship is placed in its regional context.
India continues to object to the China–Pakistan Economic Corridor. In a May 2026 response, the Ministry of External Affairs reiterated that the corridor passes through territory India says is under Pakistan’s forcible and illegal occupation and that the project impinges on India’s sovereignty and territorial integrity. That position rules out Indian acceptance of the Belt and Road Initiative in its present form.
At sea, India’s role in the Quad reflects another area of divergence. The grouping of India, Australia, Japan and the United States describes itself as a diplomatic partnership rather than a military alliance. Its agenda includes maritime domain awareness, resilient supply chains, critical and emerging technologies, infrastructure, health and disaster response. For India, participation is consistent with an issue-based, multi-aligned foreign policy. For China, the Quad remains part of an Indo-Pacific environment in which Beijing sees growing strategic pressure.
India and China can therefore cooperate in BRICS or the Shanghai Cooperation Organisation while competing in other theatres. Membership of the same plurilateral institution does not imply alignment on the boundary, connectivity projects, maritime strategy or relations with third countries.
That coexistence of cooperation and competition is not an anomaly; it is the organising feature of the relationship. The summit did not remove it. It provided a political framework for managing it.
What Would Constitute a Real Reset?
A genuine strategic reset should be tested against observable outcomes rather than summit imagery.
On the border, the benchmarks are sustained tranquillity, progress from disengagement towards de-escalation and the reliable functioning of military and diplomatic mechanisms. Economically, they include better market access for Indian exporters, a more predictable investment-review process and evidence that both sides are addressing the imbalance rather than merely acknowledging it. Functionally, the durability and expansion of restored travel, pilgrimage and institutional exchanges will matter. Politically, each side’s willingness to manage disagreement without coercion or sudden escalation will be decisive.
None of these tests requires India and China to become strategic partners in the conventional sense. Their size, geography and competing interests make continued rivalry likely. Nor should cooperation in BRICS be treated as proof of broader geopolitical alignment.
The New Delhi meeting nevertheless has strategic value. It indicates that both governments recognise the cost of an unmanaged confrontation and are willing to preserve channels through which differences can be negotiated. That is more than symbolism, but less than reconciliation.
For now, the relationship has settled into a managed equilibrium: selective cooperation, restored functional links and continuing economic exchange alongside an unresolved boundary dispute and wider geopolitical competition. Whether that equilibrium develops into a durable reset will depend not on the language of the summit, but on what happens at the border, in regulatory decisions and across the practical mechanisms connecting the two societies.
