Why a rare Modi-Xi meeting in Russia is critical

The two leaders held bilateral talks for the first time in five years. The last meeting between Modi and Xi took place during an informal summit in Tamil Nadu's Mahabalipuram in 2019. The meeting preceeded the June 2020 clashes in Galwan which led to a significant military escalation.

Since the LAC standoff, Modi and Xi have not had any official bilateral engagements. Although, they did share stage at multi-lateral events.

In 2023, Modi and Xi held a brief and informal conversation in Johannesburg on the sidelines of the BRICS Summit. In November 2022, the two leaders exchanged pleasantries and held a brief conversation at a dinner hosted by the Indonesian President for the G20 leaders.

But the latest Modi-Xi meeting in Russia was the first structured talks in five years, which signals a clear intent by both the sides to improve bilateral ties. "India-China relations are important for the people of our countries, and for regional and global peace and stability.  Mutual trust, mutual respect and mutual sensitivity will guide bilateral relations," PM Modi wrote after the meet on X.

Reviving Wuhan spirit

In 2018, Modi and Xi met for the Wuhan Informal Summit in China following the Doklam standoff in 2017.

Before the Eastern Ladakh confrontation, the 73-day Doklam border standoff was the most extended period of military confrontation between the India and China in recent history.

At the two-day informal summit in Wuhan, the two leaders issued “strategic guidance” to their respective militaries to make sure that there was no repeat of Doklam.

“The Wuhan summit became vital to re-invigorate border protocols maintaining peace and tranquillity. While Wuhan had substance, Mamallapuram (Mahabalipuram) was more optics,” defence analyst major general Ashok Kumar Mehta (Retd) told the Print.

However, the Wuhan spirit did not last long and fizzled out just months later with the Chinese incursion into Indian territory in May 2020 and the ensuing military confrontation, which led to the death of 20 Indian soliders and an undisclosed number of Chinese troops.

The latest bilateral meeting on the sidelines of BRICS is being seen as a fresh effort to uphold the Wuhan Spirit and possibly restore peace and tranquility along LAC.

Ironing the wrinkles

The 2020 military clash in Ladakh's Galwan Valley marked a turning point in India-China ties and sent them in a freefall.

Following the border clashes, India implemented rigorous visa checks for Chinese nationals. China also reciprocated.

The tightened measures impacted India's manufacturing industry, as companies struggled with production when specialised Chinese engineers were unable to secure visas, according to a report by Reuters.

Later after receiving complaints from businesses, India decided to speed up processing of visas for Chinese technicians.

India also heightened its scrutiny of foreign investments in 2020, particularly from neighbouring countries, to safeguard its strategic sectors and national security. According to Reuters, this has led to billions of dollars in proposed investment getting stuck in the approval process over the last four years.

The Modi government also banned about 300 Chinese mobile apps, including TikTok, citing data and privacy concerns. The two countries have not had any direct flights for four years.

The talks could be an opening in reviving some, if not all, of the pre-2020 status quo between the two Asian giants.

Balancing trade ties

Foreign affairs expert Robinder Nath Sachdev told ANI that PM Modi is likely to push for balancing of the bilateral trade between India and China.

India has one of the highest trade deficits with China, which stood at $ 85 billion in 2023-24. India's exports stood at $ 16.65 billion, while imports were $ 101.73 billion in the last fiscal.

Time and again, India has raised concerns over the increasing trade gap and asked China to provide greater market access for its goods.

External Affairs Minister S Jaishankar recently said that India’s economic relationship with China has been very unfair and imbalanced. He added that India is not "closed to business from China", but the issue is in which sectors the country does business with Beijing and on what terms.

China has emerged as India's top import source with $56.29 billion worth of inbound shipments during the April-September period of this fiscal, according to the commerce ministry data. The imports from China rose by 11.5 per cent during the first half of this fiscal. The imports stood at $50.48 billion during April-September 2023.

Sachdev said that China must lower some of its tariffs or non-tariff barriers to Indian trade so that it increases but at the same time, the deficit decreases.

In the Economic Survey released on July 22, the Centre suggested that instead of importing goods, focusing on FDI from China seems more promising.

(With inputs from agencies)