World · BRICS 2026
China-India thaw faces a BRICS test as Xi is expected in New Delhi
A high-profile visit could turn two years of careful border diplomacy into visible political momentum. But trade imbalances, investment controls, data security and technology restrictions show how far the relationship still is from a genuine reset.
The thaw is real enough for leaders to travel and border channels to reopen. It is not yet deep enough to make security concerns disappear.
China and India are preparing for a diplomatic moment that would have been difficult to imagine at the darkest point of their Himalayan confrontation. Chinese President Xi Jinping is expected in New Delhi for the BRICS summit this weekend, according to Reuters and preparations reported in India, although Beijing had not formally named the head of its delegation as of September 9. If Xi attends, it will be his first visit to India in seven years and the most visible evidence yet that Asia’s two giant neighbors are trying to move beyond the freeze that followed their deadly 2020 border clash.
The symbolism is substantial, but the substance is more complicated. Prime Minister Narendra Modi and Xi have rebuilt leader-level contact. Their governments have restored some flights, accelerated business visas, reopened border trading points and created new military and diplomatic mechanisms to manage the frontier. Yet the commercial relationship remains shaped by a striking paradox: India depends heavily on Chinese machinery, electronics and components while treating many forms of Chinese capital, data access and technology involvement as security-sensitive.
That is why the New Delhi summit matters less as a ceremonial “reset” than as a test of whether the two governments can build a durable working relationship without resolving their deeper rivalry. The central question is no longer whether China and India will talk. They already are. It is whether they can convert border calm into predictable rules for trade, investment, technology and political competition while accepting that strategic trust may remain scarce for years.
A visit would turn a careful thaw into a public test
India is hosting the 18th BRICS summit on September 12 and 13. The expanded grouping gives New Delhi and Beijing a setting where they can emphasize cooperation among large emerging economies without pretending that their bilateral disputes have vanished. India has spent the year hosting BRICS meetings on finance, security, diplomacy and other subjects; Chinese officials have repeatedly voiced support for India’s chairmanship. The summit therefore arrives after months of institutional contact rather than as an isolated photo opportunity.
Still, Xi’s attendance carries a different political weight. The Chinese Foreign Ministry was conspicuously cautious this week. Asked on September 8 and again on September 9 who would lead China’s delegation, a spokesperson said Beijing would announce information when available. Reuters, meanwhile, described Xi’s visit as anticipated, and Indian media reported security preparations for his arrival. That distinction matters. Until Beijing formally announces the trip, it should be treated as expected rather than certain.
If it happens, the visit would place Modi and Xi in the same capital at a moment when both governments have incentives to stabilize their relationship. India wants reliable access to industrial inputs as it expands manufacturing, infrastructure and clean-energy capacity. China has an interest in preventing its relationship with India from hardening into permanent strategic hostility while Chinese firms search for growth in a major neighboring market. Both countries also want greater room to maneuver in a world of tariff disputes, supply-chain fragmentation and widening geopolitical blocs.
Those incentives do not make the two powers natural partners. They make them pragmatic neighbors. The most realistic outcome of the current thaw is therefore not friendship but managed competition: fewer military surprises at the border, more predictable economic rules, more senior-level contact and enough crisis-control machinery to keep individual disputes from contaminating the whole relationship.
New Delhi and Beijing are not trying to erase their rivalry. They are trying to make it governable.
The difference is crucial: stabilization can be meaningful even when strategic trust remains limited.
Every economic conversation still begins in the Himalayas
The most important change since 2020 has happened far from boardrooms. China and India share a roughly 4,000-kilometer, or 2,500-mile, frontier across some of the world’s most difficult terrain. Much of it is not mutually demarcated. Instead, both militaries operate around a contested Line of Actual Control, and disagreements over where that line runs have repeatedly produced patrol confrontations.
In June 2020, those tensions turned deadly in the Galwan Valley in Ladakh. Indian and Chinese troops fought with rocks and improvised weapons in a confrontation that killed 20 Indian soldiers and four Chinese soldiers. It was the first fatal clash along the border in decades. The shock traveled quickly into the economic relationship: India tightened scrutiny of Chinese investment, banned a large number of Chinese apps, restricted some commercial activity and cut direct passenger links as political trust collapsed.
The thaw began only after the military picture improved. In October 2024, the two sides reached arrangements that enabled troops to pull back from their final major standoff locations and restore patrolling patterns in sensitive areas. Modi and Xi met that month, creating political space for diplomatic channels to restart. Since then, officials have tried to make the border less dependent on ad hoc crisis management.
The latest step came on August 25, 2026, when China’s Wang Yi and India’s national security adviser Ajit Doval held the 25th round of Special Representatives talks on the boundary question in Beijing. An official Chinese summary listed eight areas of agreement. Among them were plans to advance negotiations on a boundary settlement framework, establish an expert group on delimitation, strengthen border-management mechanisms, add two military commander meeting points and two hotlines, and improve understanding of the Line of Actual Control in appropriate sectors.
The same package also reached beyond military management. The two sides recorded the reopening of three designated border trading points, agreed to work on cross-border river issues and said they would continue discussions in 2027. None of that resolves the territorial dispute. But it does create more channels through which misunderstandings can be contained before they escalate.
The Galwan clash pushed a long-running border dispute into a much colder political and economic phase.
Disengagement at the last major standoff points helped reopen the path to leader-level diplomacy.
New hotlines, meeting points, trade links and expert groups aim to make stability more durable.
Trade recovered faster than trust — and became more lopsided
The economic relationship never disappeared during the political freeze. In some ways it became more revealing. Indian factories, power projects, electronics assemblers and consumer markets continued to rely on Chinese goods even as New Delhi tried to reduce strategic dependence on its neighbor. For India, the problem is not a lack of trade. It is the structure of that trade.
Reuters reported that India imported about $132 billion in goods from China during the 2025/26 fiscal year. Total bilateral merchandise trade reached roughly $151.1 billion, leaving India with a deficit of more than $100 billion. That imbalance is politically sensitive because many of the imports are not discretionary consumer products. They include machinery, electronic components and intermediate goods that feed India’s own manufacturing ambitions.
That creates a policy bind. India wants to build more at home under a broad industrial strategy that emphasizes electronics, renewable energy, advanced manufacturing and supply-chain resilience. But moving too quickly to restrict Chinese inputs can raise costs or slow the very factories New Delhi wants to expand. The result is selective decoupling rather than wholesale separation: encourage local production where possible, diversify suppliers where practical, but preserve access to Chinese equipment when alternatives are scarce or expensive.
The thaw has nevertheless produced practical gains. Direct passenger flights have resumed after years of disruption, and India has moved faster on visas for Chinese business professionals. Border trade restarted at designated points after a six-year gap. Those changes matter because they repair the connective tissue of a relationship that had been reduced to high-volume merchandise trade with relatively thin human contact.
New Delhi has also eased some investment restrictions in selected industries. But the direction is not a return to the pre-2020 environment. It is a calibrated reopening in which authorities distinguish between investment that can help close technology or manufacturing gaps and investment that touches sensitive data, infrastructure or strategic sectors. Beijing, for its part, has its own leverage through machinery, components and technical know-how. Reuters has reported concerns in India about delays or restrictions involving industrial equipment and technology transfers from China.
The relationship’s economic contradiction
India wants less strategic dependence on China, yet many of the inputs needed to expand Indian manufacturing still come from Chinese suppliers. Beijing wants deeper access to India’s growth market, yet Indian regulators increasingly treat capital, data and technology as national-security questions. That makes economic normalization possible in pieces, not as one sweeping deal.
New Delhi is opening doors selectively, not removing the lock
The deepest legacy of the 2020 confrontation may be regulatory rather than military. India introduced tighter screening for investment from countries that share a land border with it, a rule that in practice placed Chinese capital under a government-approval route. The policy was initially framed as protection against opportunistic acquisitions during the pandemic, but the border crisis turned investment review into a broader security instrument.
Six years later, India is experimenting with a more nuanced approach. Officials have relaxed restrictions in some sectors where foreign capital and technology can support domestic production. That does not mean Chinese companies receive automatic approval. Large proposed investments remain politically difficult, especially where ownership, data, critical infrastructure or strategic technology are involved. Reuters noted that Chinese automakers BYD and Great Wall Motor withdrew planned Indian investments amid regulatory obstacles.
For companies, uncertainty can be as consequential as a formal ban. A factory plan that needs years of approvals, local partnerships and imported equipment is difficult to finance if executives cannot predict whether political relations will deteriorate again. The same is true for Indian businesses that rely on Chinese specialists or machinery: visa delays, customs scrutiny or export controls can become hidden costs in a supply chain.
This is where a leader-level meeting can help even without producing a headline investment pact. Political direction can tell bureaucracies which categories of business should move faster and which will remain restricted. It can also create a mechanism for companies to raise bottlenecks before they become diplomatic disputes. The practical test after BRICS will be whether approvals become more predictable, not simply whether officials announce a friendlier tone.
Payments and smartphones show why the next phase is harder
The economic disputes that most clearly define the new relationship are no longer only about tariffs or factories. They are about data, digital infrastructure and the degree of access that one country’s technology companies should have inside the other’s economy.
One current example is India’s Unified Payments Interface, the domestic instant-payment network known as UPI. Prime Minister Modi wants UPI connected to more overseas payment systems as India promotes its digital public infrastructure internationally. Yet Reuters reported on September 3 that Indian authorities had stalled a proposed link between UPI and Alipay+, a network operated by Singapore-based Ant International, because of national-security and data-privacy concerns tied to the platform’s Chinese connections.
The proposal illustrates the difference between diplomatic thaw and digital trust. A cross-border payment link can make travel and commerce easier, but it also raises questions about where transaction data moves, which companies can analyze it, how fraud is monitored and what happens during a political crisis. Those are exactly the kinds of concerns governments increasingly treat as national-security issues rather than ordinary commercial details.
A second example comes from the smartphone industry. India’s Serious Fraud Investigation Office has recommended a detailed investigation into Xiaomi’s Indian business over possible foreign-investment-law issues, Reuters reported this week. The recommendation still requires approval from the Ministry of Corporate Affairs. Xiaomi said it had not received official notice of the proposed probe and has emphasized its compliance with Indian law. The distinction is important: a recommended investigation is not a finding of wrongdoing.
Yet the case demonstrates how business and geopolitics now overlap. Chinese technology companies built enormous consumer businesses in India before 2020. Since then, regulators have scrutinized ownership structures, payments, data and investment compliance more aggressively. For Beijing, such actions can look discriminatory. For New Delhi, they are part of a broader attempt to prevent dependence in sectors that touch communications, finance and critical data.
Technology restrictions can also run in the other direction. Indian manufacturers worry about access to Chinese engineers, production equipment and specialized know-how as they try to scale domestic supply chains. A relationship built around mutual screening can easily become self-reinforcing: one side tightens controls because it fears dependence, the other responds with its own restrictions, and companies make long-term investment decisions on the assumption that politics will remain volatile.
India’s manufacturing push needs Chinese inputs even as it seeks alternatives
For U.S. readers, the China-India economic story can look familiar because Washington is wrestling with many of the same questions: how to preserve the efficiencies of global trade while reducing dependence on a strategic competitor in critical sectors. India’s starting point, however, is different. China is not an ocean away. It is a neighboring military power, a dominant supplier and a direct competitor for industrial influence across Asia.
That makes supply-chain policy unusually concrete. An Indian solar project may need Chinese equipment. An electronics plant may depend on Chinese components or tooling. A pharmaceutical manufacturer may rely on Chinese chemical inputs. Replacing those supplies can be a long industrial project rather than a quick procurement decision. New Delhi has therefore pushed localization and supplier diversification while continuing to import at scale.
For China, the Indian market is too large to ignore. India’s population, infrastructure buildout and consumer economy offer growth opportunities at a time when Chinese companies face tighter scrutiny in the United States and parts of Europe. But market access comes with demands for local production, technology sharing and regulatory compliance that can collide with Beijing’s own desire to protect strategic capabilities.
The healthiest version of the thaw would not require either government to abandon those industrial goals. It would create clearer rules around them. India could say which sectors are open, which require joint ventures or local safeguards, and which remain effectively closed. China could provide greater certainty around equipment exports, technical staff and commercial licensing. Predictability would reduce the cost of political risk even if the two governments continue to compete.
The worst version would be the opposite: warm summit language followed by case-by-case restrictions that companies cannot anticipate. That would encourage both sides to treat every commercial dispute as evidence that the other is acting strategically, making future liberalization harder.
A thaw with China does not mean India is choosing a camp
Any improvement in China-India relations will be watched closely in Washington. India is a member of the Quad alongside the United States, Japan and Australia, and U.S.-India strategic cooperation has expanded for years across defense, technology and the Indo-Pacific. It would be a mistake, however, to read every Modi-Xi meeting as a signal that New Delhi is moving away from Washington.
India’s foreign policy is built around strategic autonomy: working with different powers on different issues rather than binding itself completely to one bloc. Stabilizing the Chinese border serves that approach. A quieter frontier gives India more room to focus on economic growth and other security priorities. It also lowers the risk that a local patrol incident could force New Delhi into an unwanted military crisis with a nuclear-armed neighbor.
Beijing has its own reasons to support stabilization. China faces strategic competition with the United States, maritime disputes in East Asia and a complicated economic environment at home and abroad. A permanently hostile India would add another major front to that list. Better relations with New Delhi can also strengthen China’s argument that large non-Western powers can cooperate through institutions such as BRICS even while disagreeing on bilateral issues.
But there are hard limits. India remains wary of China’s close relationship with Pakistan. Beijing watches India’s security ties with the United States and other Indo-Pacific partners. The two compete for influence across South Asia, the Indian Ocean and the Global South. Their border claims remain unresolved. Those structural differences are not summit problems that can be negotiated away in one meeting.
That is precisely why a managed relationship has value. Great-power competition becomes most dangerous when governments lose reliable channels for interpreting each other’s actions. The recent restoration of military hotlines, diplomatic meetings, flights and business contact provides more opportunities to clarify intent before a disagreement becomes a crisis.
The real scorecard begins after the motorcades leave
The easiest part of a summit is the image: leaders seated across a table, a handshake, a carefully worded statement about cooperation. The meaningful indicators come later. If Xi attends and meets Modi, the value of the encounter will depend on whether it produces instructions that bureaucracies, militaries and companies can actually implement.
Five tests after BRICS
- Border implementation: Do the new commander-level meeting points, hotlines and expert groups become operational, and do patrol encounters remain contained?
- Investment predictability: Does India publish clearer pathways for Chinese capital in non-sensitive manufacturing, or do approvals remain opaque and episodic?
- Technology access: Do Indian companies gain more reliable access to Chinese machinery, engineering support and components needed for domestic production?
- Digital boundaries: Can the two sides find rules for payments and data-linked services, or will security concerns keep financial technology largely outside the thaw?
- Political cadence: Do ministerial and leader-level contacts continue through 2027 even when individual disputes reappear?
A second test will be whether both sides can separate problems rather than bundle them. The relationship deteriorated after 2020 because a border crisis spilled into investment, apps, aviation and public opinion. A more resilient model would allow governments to keep military pressure contained while commercial or diplomatic channels continue functioning. That does not mean compartmentalizing security away from economics completely; modern technology makes that impossible. It means preventing every disagreement from triggering a full-spectrum freeze.
A third test is public expectation. Neither government benefits from presenting the thaw as a final reconciliation when unresolved disputes are certain to return. A lower-key message — that China and India can compete, trade, negotiate and manage a disputed border at the same time — is less dramatic but more sustainable.
The bottom line: stabilization is already an achievement
The most useful way to judge the China-India thaw is not by asking whether the two countries have become friends. They have not. Their border remains disputed, their strategic interests diverge, and economic policy on both sides is increasingly shaped by national-security concerns.
The better question is whether they can make rivalry less brittle. The evidence so far is mixed but meaningful: troops have disengaged from major standoff points, more border mechanisms are being built, flights and trade links are returning, high-level meetings have resumed and some investment restrictions have eased. At the same time, the stalled Alipay+ proposal, scrutiny of Xiaomi, unresolved trade imbalance and continuing technology restrictions show that the trust deficit remains deep.
If Xi arrives in New Delhi this weekend, the optics will mark a milestone. The durable story will be written in the months afterward — in quiet border meetings, visa approvals, factory permits, payment rules and whether companies on both sides can plan without assuming that the next political dispute will shut the door again.
China-India thaw: key questions
Has China officially confirmed that Xi Jinping will attend the New Delhi BRICS summit?
As of September 9, China’s Foreign Ministry had not publicly named the leader of its delegation. Reuters described Xi’s visit as anticipated, while Indian reporting said security preparations were being made for his expected arrival. The distinction remains important until Beijing issues a formal announcement.
What changed after the 2020 border clash?
The Galwan Valley confrontation caused the sharpest deterioration in bilateral ties in decades. India tightened investment scrutiny, restricted Chinese apps and reduced direct connectivity. A 2024 disengagement agreement and subsequent talks allowed both sides to restore some patrol arrangements, flights, visas, border trade and diplomatic mechanisms.
Why does India still import so much from China?
Chinese suppliers remain competitive in machinery, electronics, industrial components and other inputs used by Indian manufacturers. Replacing those supply chains requires time, capital and alternative vendors, so India is trying to localize production without abruptly cutting off inputs its own industrial expansion still needs.
Does better China-India diplomacy weaken India’s relationship with the United States?
Not necessarily. India traditionally pursues strategic autonomy and maintains relationships with competing powers at the same time. Reducing tension with China can lower India’s border risk while New Delhi continues cooperation with the United States, Japan and Australia through the Quad and other channels.
Reporting basis and primary records
This analysis is based on public records and reporting available through September 10, 2026. Attendance language reflects the latest available confirmation status.
- Reuters: anticipated Xi visit, diplomatic thaw and commercial barriers
- Reuters: market access, bilateral trade, flights, visas and border trade
- Chinese Foreign Ministry: eight-point outcome of the August 25 boundary talks
- Chinese Foreign Ministry: September 9 briefing on BRICS delegation status
- Reuters: India’s concerns over a proposed UPI–Alipay+ payment link
- Reuters: proposed deeper investigation into Xiaomi’s India operations
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