India and China, two of the world’s fastest-growing major economies, reaffirmed their crucial role in promoting global trade stability during a bilateral meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping in Tianjin on August 31, 2025.

The meeting took place just ahead of the Shanghai Cooperation Organisation (SCO) Summit, at a time when the global economy has been shaken by a sharp increase in U.S. tariffs imposed under President Donald Trump. With Washington targeting around 60 countries, including India and China, the ramifications of protectionist economic policies have become a serious concern for the international trading system.

According to the Ministry of External Affairs (MEA), both leaders acknowledged that India and China, by virtue of their economic weight and growing bilateral trade linkages, are pivotal in stabilising world trade. Despite recent geopolitical and commercial frictions, Modi and Xi stressed the importance of deepening bilateral trade relations, addressing trade imbalances, and expanding investment opportunities.

They emphasised the need to reorient ties from a purely transactional economic level to one anchored in long-term political and strategic considerations. This approach, they agreed, would help counterbalance the negative impacts of unilateral tariff increases by the United States, such as the 50% levy placed on Indian exports — including a 25% additional tariff for engaging in oil trade with Russia — and the 30% tariff imposed on China, which Washington later suspended temporarily to facilitate talks with Beijing.

The bilateral engagement also prioritiSed people-to-people connectivity as a central plank of India–China relations. Both governments decided to facilitate greater exchanges through the expansion of direct flight connectivity, simplification of visa procedures, and resumption of the historically significant Kailash Manasarovar Yatra.

These steps aim to foster trust and enhance engagement between citizens, thereby making bilateral ties more resilient. Indian External Affairs Minister Dr. S. Jaishankar had earlier expressed appreciation for these initiatives during his discussions with Chinese Vice President Han Zheng in Beijing, where new avenues for cultural and tourism exchanges were proposed.

The agreement to finalise an updated Air Services Agreement and provide easier movement for businesspersons, media professionals, and tourists further underscored the recognition that stronger people-to-people contact enhances overall diplomatic and economic cooperation.

On a broader strategic level, Prime Minister Modi highlighted that both India and China pursue strategic autonomy in their policymaking and must avoid allowing their bilateral ties to be influenced by external powers or the lens of third-party perspectives.

This joint emphasis reinforces the understanding that while India and China may have diverse approaches in their regional strategies, expanding common ground on global issues — including terrorism, equitable trade practices, energy security, and regional stability — is essential for safeguarding shared interests. By seeking greater cooperation in multilateral forums, the two sides positioned themselves as defenders of globalisation and multilateralism, in contrast to the ongoing wave of isolationism witnessed in the trade policies of the United States.

The timing of the Modi–Xi meeting, set immediately before the SCO Summit, reflects the rising centrality of the SCO as a platform where Eurasian and Asian powers attempt to coordinate not only on counterterrorism and security issues but also increasingly on matters of trade, connectivity, and development. With 10 members — including Belarus, China, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan, Uzbekistan, and India — the SCO represents a significant geopolitical bloc with diverse strategic priorities.

India, since becoming a full member in 2017 after an observer role spanning over a decade, has used the forum to voice its positions on regional economic corridors, counterterrorism cooperation, and fair-trade practices. Its previous leadership roles in the SCO Council of Heads of Government (2020) and Council of Heads of State (2022–23) reflect India’s increasing willingness to shape the organisation’s agenda.

The Tianjin meeting also paved the way for further trilateral and multilateral engagements, particularly as Prime Minister Modi is scheduled to hold talks with Russian President Vladimir Putin on the sidelines of the SCO gathering.

This trilateral dynamic between India, China, and Russia within the SCO framework could evolve into a critical stabilising force in global geopolitics, especially at a juncture when the United States’ policies are creating uncertainty in global trade governance. By strengthening cooperation within the SCO and building bridges in bilateral relations, India and China appear keen to leverage their expanding influence to ensure that multilateral economic institutions remain inclusive and balanced.

The Tianjin meeting between Prime Minister Modi and President Xi Jinping represents an important recalibration of India–China relations against the backdrop of volatile global trade disputes. Both economies, conscious of their responsibility in global economic governance, agreed on practical measures to enhance trade, reduce barriers, deepen cultural linkages, and pursue strategic autonomy. 

The recognition of their collective role in stabilising world trade signals a cautious but significant alignment in economic policies, setting the stage for broader cooperation in regional and international platforms.

While challenges in the bilateral relationship persist, this dialogue strengthens the narrative that constructive engagement between Asia’s two largest economies is indispensable for ensuring stability in an increasingly fragmented global order.

Based On ANI Report