Modi to visit China after a seven-year gap, as tensions with the US grow.

The first visit for Indian Prime Minister Narendra Modi in over seven years will be to China, as a government source revealed recently, indicating a diplomatic thaw with China amid increasing tensions with the US.

Modi will be in China for the meeting of the multilateral ‘Shanghai Cooperation Organisation (SCO),’ which takes place on August 31, as this meeting will be pivotal in dissecting issues concerning China and India, in addition to the other countries in the SCO. India’s foreign ministry was still to respond on the matter pending confirmation of the meeting.

Modi’s meeting in China is particularly important as it coincides with the US’s most serious strain on relations with India, likely to be worsened by recently imposed tariffs on Indian goods, as well as further penalties on oil purchases from Russia.

It will be Modi’s first visit to China since June 2018 and will bring Sino-Indian relations further back on the diplomatic agenda, which suffered considerably following a military clash across the two nations’ Himalayan border in 2020.

Modi and Xi met for a discussion at a BRICS meeting in Russia in October, which stirred some thawing. The two countries are now starting to alleviate some of the friction that has obstructed business and travel activities between these Asian giants.

Members of the BRICS are deemed as emerging economies—one of them being India—and are now aligned with anti-American policies as per Trump’s threats of imposing an additional 10% import tariff on them.

As per the statement given on Wednesday by Trump, the purchasing of Russian oil by these BRICS nations would be penalized after the US attempts to stop Russian oil purchasing from the US-affiliated oil companies are done.

Witkoff, Trump’s top diplomat, has flown to Moscow, where, as per the president’s new set of rules, Russia has two days to accept the proposal of a cease-fire in Ukraine, or else they will be hit with new sanctions.

In the meantime, India’s national security advisor, Ajit Doval, has traveled to Russia and is set to review India’s engagement in purchasing Russian oil, considering Trump’s demands to halt Russian oil purchases. The official did not declare their name but did share that the timeline of Doval’s meeting and these discussions are set to coincide.

New Delhi’s policies for defense cooperation will be geared towards getting Russia to expedite shipments of the S400 air defense systems, which are already overdue, as well as discussing the potential for President Putin’s visit to India.

Doval will be succeeded by Foreign Minister Dr. S. Jaishankar, who will visit in the coming weeks.

Impact on exports

Negotiations for a trade agreement between the largest and fifth-largest economies in the world, whose bilateral trade is valued at over $190 billion, were halted by a combination of political miscalculation, miscommunication, and resentment, US and Indian officials told Reuters.

According to four different sources who spoke to Reuters on behalf of the government, India believes that Trump’s crackdown may cost it a competitive edge in the $64 billion worth of goods it sends to the US, which make up 80% of its total exports.

However, it is anticipated that the direct influence on economic growth will be limited due to the comparatively small export share in India’s $4 trillion economy.

Despite the uncertainty surrounding tariffs, the Reserve Bank of India held rates steady on Wednesday and maintained its 6.5% GDP growth forecast for the current April-March fiscal year.

According to the sources, India’s government assessment report assumed a 10 percent penalty for purchasing Russian oil, raising the overall US tariff to 35 percent.

A request for comment was not immediately answered by India’s trade ministry.

According to all four sources, the internal assessment report is the government’s preliminary estimate and will be updated as the exact amount of tariffs imposed by Trump becomes known.

In 2024, India is expected to export goods worth approximately $81 billion to the United States.

In 2024, the South Asian country’s exports to the US accounted for 2% of its GDP. In 2024, it exported $443 billion worth of goods worldwide.

According to two sources who cited the internal assessment, the proposed tariffs on India’s high-value exports would cause “erosion of price competitiveness, encountering intensified rivalry from countries subject to lower duties.”

Published in Daily Pak, August 7th, 2025