Maj. Gen. Rajan Kochhar
What Can India Realistically Expect from the Chinese President’s Visit?
The forthcoming visit of Chinese President Xi Jinping to New Delhi on September 12–13 for the 18th BRICS Summit is much more than another high-level diplomatic engagement. It comes at a particularly important moment in India-China relations, when the relationship appears to be moving cautiously from confrontation towards what may best be described as competitive coexistence.
Xi’s visit will be his first to India in seven years and his first since the military crisis and violent confrontation in eastern Ladakh in 2020. The visit therefore carries considerable political symbolism. It also provides Prime Minister Narendra Modi an opportunity to test whether the thaw in bilateral relations can be converted into a more substantive reset.
The immediate temptation will be to interpret the visit as the beginning of a new era in India-China relations. That would, however, be premature. The more realistic expectation should be that Modi and Xi will attempt to put in place the political architecture necessary for managing their differences while expanding areas of mutual economic interest.
The central question is therefore not whether India and China will become friends. They are unlikely to. The more relevant question is whether the two countries can become stable competitors capable of managing their rivalry without allowing it to degenerate into military confrontation.
That distinction is critical. As former Indian Ambassador to China Gautam Bambawale has observed, the actions of the People’s Liberation Army in eastern Ladakh set the relationship back substantially. His assessment is particularly revealing: “The net is still negative, so there’s a lot of work to be done.”
The Border Will Remain the Central Issue
For India, there can be no durable normalisation of relations without sustained peace and tranquillity along the Line of Actual Control. The disengagement process following the 2020 crisis, particularly after the Modi-Xi meeting at Kazan in October 2024, created the opening for rebuilding relations. Subsequent developments have included the resumption of direct flights, easing of visa restrictions, revival of the Kailash Man Sarovar pilgrimage and gradual relaxation of some restrictions on Chinese investment. But disengagement is not the same as de-escalation, and de-escalation is not the same as de-induction. The military situation therefore remains a critical part of the equation.
The 25th round of talks between the Special Representatives, National Security Adviser Ajit Doval and Chinese Foreign Minister Wang Yi, held in Beijing in August 2026, produced eight points of consensus. These included the creation of two additional military meeting points, two additional military hotline channels in the eastern and middle sectors, continued work on border management and an “Early and Substantial Harvest” concerning boundary delimitation. The two sides also agreed to continue discussions on trans-border rivers and to hold the next Special Representatives meeting in India in 2027.
These are useful confidence-building measures. They are not, however, a settlement of the boundary question. India should therefore resist the temptation to declare the border issue resolved merely because troops are no longer facing each other in the manner seen during the Ladakh crisis.
The real test will be whether China is prepared to restore the pre-2020 patrolling arrangements, institutionalise mechanisms to prevent future confrontations and demonstrate that it accepts the principle that the LAC cannot be altered through coercion. The message from New Delhi should be unambiguous: peace on the border is the foundation for progress in every other sphere of the relationship.
The Trade Deficit: The Elephant in the Room
The economic relationship presents an extraordinary paradox. India and China are simultaneously competitors, security rivals and major trading partners. Bilateral trade has reached unprecedented levels. Yet the structure of this trade is heavily tilted towards China.
According to the Indian Embassy in Beijing, bilateral trade reached approximately $151.1 billion in 2025–26, with Indian exports at $19.47 billion and imports from China at $131.63 billion. The resulting Indian trade deficit was approximately $112.16 billion; the largest bilateral trade deficit India has with any country.
Chinese exports to India consist substantially of machinery, electronics, computers, telecommunications equipment, integrated circuits, batteries, chemicals, fertilisers and components required by India’s manufacturing sector. India, in contrast, continues to export a much narrower basket, including commodities and intermediate products. This is not merely a question of arithmetic. It represents a structural vulnerability.
India’s manufacturing ecosystem has become dependent on Chinese components and intermediate goods in several sectors. Pharmaceuticals, electronics, solar equipment, renewable energy, telecommunications, automobiles, batteries and industrial machinery all have varying degrees of exposure to Chinese supply chains.
The first half of 2026 demonstrates the continuing imbalance. Chinese exports to India reached $79.41 billion, while Indian exports to China were $12.31 billion, leaving a six-month deficit of approximately $67.1 billion.
India cannot realistically eliminate this deficit overnight. Nor should the objective be simplistic import substitution at any cost. The real objective should be to rebalance the relationship. India must seek greater access for its pharmaceuticals, agricultural products, IT-enabled services, engineering goods, chemicals, automobiles and other manufactured products in the Chinese market. If China expects unrestricted access to the Indian market, India should reasonably expect reciprocal market access. This should be one of the principal deliverables from the Modi-Xi meeting.
A Strategic Economic Dialogue Could Be the First Step
One of the most significant developments surrounding the visit is the possibility of establishing a Strategic Economic Dialogue between India and China. Such a mechanism could provide a structured platform to address trade imbalance, market access, investment, visas, supply chains and technology.
This is important because many of the current problems are not essentially political. They are bureaucratic, regulatory and commercial. Indian companies complain about restricted access to Chinese markets. Chinese companies complain about restrictions and investigations in India. Indian businesses face difficulties in obtaining Chinese visas. Chinese companies face increased scrutiny in India.
Chinese machinery and components needed by Indian industries have reportedly faced delays at Chinese customs, while India continues to scrutinise Chinese investment in sensitive sectors. The two countries therefore need a mechanism that can separate legitimate national-security concerns from ordinary commercial activity. India must not compromise its security screening. At the same time, security cannot become an excuse for economic paralysis. The challenge is to construct a system of controlled economic engagement.
China Wants the Indian Market
There is a larger strategic factor that India should exploit. China is facing structural economic pressures of its own, including excess industrial capacity, weak domestic demand and increasing restrictions on Chinese exports in Western markets. India, with its huge consumer market and expanding manufacturing base, represents an attractive alternative market. This gives India leverage. China needs markets. India needs technology, machinery, components and capital in selected sectors. The relationship therefore contains a degree of mutual dependence. The question is how India converts this dependence into bargaining power.
India should not seek Chinese investment indiscriminately. Instead, it should identify sectors where Chinese technology, capital or manufacturing expertise can accelerate Indian industrial capability while ensuring that strategic control remains with Indian entities.
The recent relaxation of some restrictions on Chinese investment in non-sensitive sectors indicates that New Delhi is already moving towards a more calibrated approach. The March 2026 changes to Press Note 3 allow certain non-controlling investments from countries sharing a land border with India to proceed without prior government approval, while proposals in areas such as capital goods and electronic components can receive expedited consideration. This represents a significant policy shift. But it should remain sector-specific, conditional and reversible.
The Investment Question
India needs foreign capital, but it does not need foreign strategic vulnerability. Chinese investment can potentially help India build manufacturing capacity, particularly in electronics, components, batteries, renewable energy and industrial equipment.
But sectors involving critical infrastructure, telecommunications, ports, defence, financial systems, data and strategic technologies must remain subject to stringent security scrutiny. The right approach is neither “Chinese investment at any cost” nor “no Chinese investment”. It should be: Chinese capital where it strengthens Indian capability; restrictions where it creates strategic dependence.
The same principle should apply to technology. India should encourage Chinese companies to manufacture in India, employ Indian workers, develop local supply chains and transfer appropriate technologies—but should avoid creating new strategic dependencies.
The Technology Dimension
The next phase of India-China competition will increasingly be technological. Artificial intelligence, semiconductors, drones, telecommunications, electric vehicles, batteries, quantum technologies, space systems and advanced manufacturing will shape national power. China has built enormous industrial capacity in many of these fields. India is attempting to build its own ecosystem. This creates both competition and opportunity. India should use Chinese competition as a catalyst for accelerating domestic capability. At the same time, selective cooperation should not be ruled out in non-sensitive areas.
The objective should be technology resilience rather than technological isolation. The Chinese approach is itself revealing. Reports indicate that Chinese authorities have also become more cautious about transferring certain advanced technologies and equipment to India, including equipment connected with infrastructure and manufacturing. This demonstrates that Beijing itself sees economic relations through a strategic-security lens. India must do the same.
No India-China conversation can ignore Pakistan. For New Delhi, China’s strategic relationship with Pakistan remains one of the most difficult aspects of the bilateral relationship.
The China-Pakistan Economic Corridor, Chinese defence supplies to Pakistan and growing military-technology cooperation have created a strategic triangle that India cannot overlook. The concern became particularly pronounced during the India-Pakistan military confrontation following the Pahalgam terrorist attack and Operation Sindoor in 2025. India will therefore want Beijing to demonstrate greater strategic sensitivity towards Indian security concerns.
China, for its part, is likely to argue that its relationship with Pakistan is independent of its relationship with India. India cannot realistically expect China to abandon Pakistan. What India can seek is a commitment that Chinese-Pakistani cooperation will not destabilise India’s security environment. This is particularly important in relation to military technology, intelligence cooperation, infrastructure development in Pakistan-occupied Jammu and Kashmir and activities along India’s western and northern fronts.
The Part-2 of the article will cover the water question, Tibet and Himalayan region, BRICS, what should India seek from Xi, what should India not export, trust and verify and the New Modus Vivendi
.jpg)
