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Chinese foreign relations

India and China Agree to Mend Ties Amid Global Trade War

Strategic Insights

— 1 min read

As the world's two most populous nations, India and China, strive to rebuild their damaged diplomatic and economic ties, they have agreed to step up trade flows, resume direct flights, and advance talks on their disputed border. Following a 2020 deadly border clash and amid US President Donald Trump's unpredictable foreign policy, the two nations have reached a major diplomatic breakthrough.

Key Takeaways:

  • India and China agreed to step up trade flows, with India's imports from China growing to over $100bn in the financial year 2020-2021.
  • The two nations will resume direct flights between them, enhance river-sharing data, and drop certain visa restrictions for tourists, businesses, and journalists.
  • China has agreed to address India's concerns over its export curbs on fertilisers, rare earth minerals, and tunnel-boring machines.
  • An expert group will be established to explore "early harvest" steps to improve border management, a move India had previously opposed.
  • China has agreed to allow pilgrims from India to visit holy sites in Tibet, and India has issued tourist visas to Chinese nationals in a sign of improving ties.
  • US President Trump's unpredictable foreign policy and trade wars have created an opening for Asia's leading and third-largest economies to mend their diplomatic and economic relations.

Statistics:

  • India's imports from China grew to over $100bn in the financial year 2020-2021 (Source: Indian government data).
  • India and China agreed to reopen several trading routes, including the Lipulekh Pass, Shipki La Pass, and Nathu La Pass.
  • An expert group will be established to explore "early harvest" steps to improve border management (Source: Indian government data).
  • China's imports of Russian oil are even larger than India's (Source: Reuters).
  • US Treasury Secretary Scott Bessent accused India of funding Russia's war in Ukraine (Source: US Department of the Treasury statement).

Sources:

  • "India and China Agree to Mend Ties Amid Global Trade War" by Al Jazeera (August 2025)
  • "US Hits India with 50 Percent Tariff Extra Penalty for Russian Oil Purchases" by Reuters (July 2025)
  • "India Accuses US of Double Standards Over Russia Trade" by Al Jazeera (August 2025)
  • Indian government data (financial year 2020-2021)
  • US Department of the Treasury statement (August 2025)

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