India and China exchanged diplomatic messages on Tuesday to commemorate the 75th anniversary of their formal relations. Chinese President Xi Jinping and Indian President Droupadi Murmu emphasised the importance of peaceful coexistence and enhanced cooperation, as tensions ease following the 2020 border conflict in the Himalayas.

Strengthening Bilateral Relations

Xi Jinping, in his message to President Murmu, called for a "Dragon-Elephant tango," symbolising a balanced and cooperative relationship between the two Asian giants. He highlighted the need for both nations to deepen communication, coordinate on major international matters, and ensure stability in border areas. The exchange of messages signifies an effort to restore diplomatic normalcy after years of strained relations due to territorial disputes and economic restrictions.

Relations between India and China suffered a significant setback following a violent military clash in 2020 along their shared Himalayan border. It was the deadliest confrontation between the two nations in four decades. In response, India imposed economic measures, restricting Chinese investments and limiting access to its tech market. However, recent diplomatic efforts, including meetings between Prime Minister Narendra Modi and Xi Jinping at the BRICS summit, have suggested a gradual thaw. The leaders agreed to resume direct flights between their countries, indicating steps toward rebuilding ties.

China Expresses Interest in Expanding Trade with India

In a parallel development, China has expressed willingness to purchase more Indian products to address the significant trade imbalance between the two nations. Chinese Ambassador to India Xu Feihong stated that Beijing aims to "strengthen practical cooperation in trade and other areas" while increasing imports of Indian goods that are well-suited for the Chinese market.

Bilateral trade between India and China stood at $101.7 billion in the 2023-24 fiscal year, as per India's trade ministry data. However, India's exports to China totaled only $16.6 billion, consisting mainly of petroleum oil, iron ore, marine products, and vegetable oil, resulting in a considerable trade deficit.

US Tariffs and Their Potential Impact

China’s trade overtures come at a time when the United States is preparing to implement new tariffs on multiple countries, including China and India. Former U.S. President Donald Trump, who has been vocal about trade imbalances, is set to roll out reciprocal tariffs on Wednesday, targeting nations he accuses of unfair trade practices.

Trump’s administration has also flagged India’s stringent import regulations as a barrier to trade, further complicating the situation. In response, India has been making trade concessions to maintain stable relations with the U.S. while simultaneously engaging with China to normalise economic interactions.

Geopolitical and Economic Implications

The diplomatic and trade discussions between India and China reflect a broader shift in their engagement. While both nations remain cautious due to past tensions, their leadership appears open to improving ties through increased dialogue and economic cooperation. However, geopolitical challenges, including border disputes and international trade policies, continue to influence the dynamic between the two countries.

As the 75th anniversary of diplomatic relations unfolds, the direction of India-China ties will depend on their ability to manage differences and foster cooperation in key areas such as trade, border stability, and global governance. The evolving global economic landscape, including U.S. tariff policies, adds another layer of complexity to this already intricate relationship.