September 1, 2025
NEW DELHI/BEIJING/TOKYO – Indian Prime Minister Narendra Modi’s trip to Japan and China is significant not just for a consolidation of ties with the other major Asian economies, but also for the shifts in New Delhi’s strategic messaging in response to festering strains with the United States.
While Mr Modi’s visit to Tokyo was about deepening a longstanding partnership, his first visit to China in seven years for the Shanghai Cooperation Organisation (SCO) leaders’ meeting in the eastern Chinese port city of Tianjin effectively drew a line under a tumultuous period between the two neighbours.
The Modi-Xi bilateral meeting may have been the culmination of a months-long detente, but it is also occurring just days after 50 per cent tariffs on Indian exports to the US came into effect – offering a pointed contrast to the souring of India’s ties with the Americans, who had cultivated New Delhi as a counter to Chinese influence for decades.
“China and India are two ancient civilisations of the East, the world’s most populous nations, and important members of the Global South,” Chinese President Xi Jinping said in a readout after their meeting on Aug 31 that stretched more than an hour.
“As long as we grasp the fundamental direction that we are partners rather than rivals, and opportunities for each other’s development rather than threats, China-India relations will be able to proceed steadily and far,” he added.
“Becoming neighbours and friends, partners who achieve mutual success, and actualising the ‘dance of the dragon and the elephant’ should be the right choice for both China and India,” said Mr Xi, referring to animal motifs for the respective countries in a Chinese idiomatic phrase.
Lingering issues with China
Bilateral tensions eased after Beijing and New Delhi agreed on a border patrolling agreement in October 2024.
Ties between the two neighbours stalled after a violent clash in Galwan in the Ladakh region, sparking confrontations along several sections of the disputed border. The two sides have gradually disengaged over the past four years, but thousands of troops remain stationed near the border.
“Our cooperation is linked to the interests of 2.8 billion people of our two countries. We are committed to advancing our relations based on mutual trust, respect and sensitivity,” said Mr Modi in a readout from his meeting with Mr Xi.
China and India agreed on Aug 19 to set up a working group for effective border management and to look for solutions. There is still no update on previously announced plans to resume flights between the two sides.
“Both countries now have a more mature understanding of each other,” Professor Zhang Jiadong, director of the Centre for South Asian Studies at Fudan University in Shanghai, told The Straits Times.
“China saw that although India drew closer to the US, it has not lost its strategic autonomy, and India’s relations with Washington have now gotten more complicated,” he added.
“From India’s perspective, it saw that China was not exhausting every means to hold India down. Beijing’s main focus simply does not lie with India, nor is it intent on going all out against it.”
With punitive US tariffs bearing on both China and India – the world’s second- and fifth-largest economies, respectively – the economic case for increasing trade and investment flows is becoming more compelling and pressing.
While India’s economy expanded by 7.8 per cent in the first quarter of the financial year that ended in June, economists have warned that US tariffs could shave 0.6 to 0.8 percentage point off India’s annual growth rate.
China’s vast array of companies is also keen for new markets and would clearly welcome opportunities to sell to the world’s most-populous nation.
“India can look to ease non-tariff restrictions by the Chinese in their market on Indian goods and seek Chinese investments in infrastructure and real estate in India,” Mr Anil Wadhwa, a former ambassador and secretary in India’s Ministry of External Affairs, told ST.
But several structural issues remain. India’s large and growing bilateral deficit with China will likely mean there will not be an unfettered influx of Chinese goods.
Other barriers standing in the way of deepening economic ties as partners include a persistent trust deficit, the Tibet issue and China’s ties with India’s perennial nemesis, Pakistan. New Delhi also remains suspicious of Beijing’s growing footprint in South Asia and the Indian Ocean.
“In the long term, a further consolidation of ties between them depends on their mutual concerns being taken care of and the avoidance of any further frictions on the long, undemarcated border,” said Mr Wadhwa.
Japanese reliability
For India, it is a vastly different story with Japan, with whom it shares a largely trouble-free relationship rooted in shared values and mutual concerns, including over China.
“Japan remains India’s preferred partner in the Indo-Pacific,” Professor Harsh V. Pant, vice-president of studies and foreign policy at the Observer Research Foundation, a New Delhi think-tank, told ST.
“Both face similar constraints insofar as China’s assertion in the Indo-Pacific is concerned and America under (President Donald) Trump has become far more unpredictable,” he said.
In the absence of US leadership in the region, Prof Pant said, it is imperative that the two countries work more closely together for a stable Indo-Pacific. Both countries are also part of the Quad, a security grouping that also includes Australia and the US.
There were many positives at a summit between Mr Modi and Japanese Prime Minister Shigeru Ishiba. Japan pledged to invest 10 trillion yen (S$87.3 billion) over the next decade to draw both countries closer on economic security, including in such strategic issues as artificial intelligence, semiconductors, crucial minerals and supply chains.
Dr Satoru Nagao, a non-resident fellow at US think-tank Hudson Institute, told ST that Tokyo will also be heartened by India’s commitment to use Japanese Shinkansen technology for its planned high-speed rail network linking Mumbai and Ahmedabad.
And he contended that Japan would play an increasingly crucial role in ensuring that India – the world’s largest democracy and a key leader in the Global South – remains committed to the existing rules-based world order, rather than leaning too closely towards China and Russia.
He pointed to how India was already playing an increasing role in the Indo-Pacific, and, like Japan, India has been building closer military ties with the Philippines. Dr Nagao also noted that Mr Modi had signed off on a joint statement in Japan that “expressed serious concern over the situation in the East China Sea and the South China Sea”.
For many observers, it was no coincidence that Japan preceded China on Mr Modi’s trip. Fudan University’s Prof Zhang said this was a demonstration of “balancing diplomacy” that all countries practise.
“This year, because of the SCO, senior Indian officials have visited China several times. Although these were for multilateral meetings, it created the impression that China-India ties had warmed,” he said.
“India is content to let people think so, as it does hope for less tension in relations. But at the same time, it does not want its allies and partners to feel that India has tilted towards China,” Prof Zhang added.
The pledge in Tianjin by Mr Modi and Mr Xi for India and China to be “partners not rivals”, though, underscores a common predicament both leaders face with President Trump.
Though China and India are the biggest buyers of Russian oil, the Trump administration has so far imposed punitive tariffs only on New Delhi while sparing Beijing in the interim as negotiations rumble on.
“India, in my view, is now looking at other countries and other markets. We need to diversify our export markets, and that is something the government is working on,” retired economics professor and international trade specialist Biswajit Dhar told ST.
“It’s the beginning of a new phase of India’s economic diplomacy post-Trump, a kind of period where we are looking beyond,” he said.