Historic PM Modi-Xi Meeting At BRICS: What Should We Expect?

Prime Minister Narendra Modi is set to meet Chinese President Xi Jinping today, October 23, 2024, on the sidelines of the BRICS Summit in Kazan, Russia.

This marks the first formal meeting between the two leaders in five years and comes at a crucial time amid ongoing tensions since the 2020 Galwan Valley military standoff.

Background on India-China Relations

Relations between India and China deteriorated significantly after the Galwan Valley clash in April 2020, which resulted in casualties on both sides. Following this incident, India implemented stringent visa restrictions on Chinese nationals, affecting key manufacturing sectors reliant on Chinese expertise. These restrictions hindered the operations of several Indian firms, leading to recent relaxations in visa policies for specific sectors.

To further curb China's influence, India mandated government approval for investments from bordering countries, which resulted in substantial delays for billions in proposed investments. The Indian government also banned approximately 300 Chinese mobile apps over data privacy concerns and suspended direct passenger flights with China during the COVID-19 pandemic, maintaining these restrictions even after other travel bans were lifted.

Despite ongoing military and diplomatic dialogues aimed at de-escalating tensions, India has insisted that normalization of relations cannot occur until disengagement and de-escalation along the disputed border are achieved. While some disengagement has occurred, disputes over areas like Depsang and Demchok remain unresolved.

Details of the Meeting

The bilateral talks between PM Modi and Xi were confirmed by Indian Foreign Secretary Vikram Misri. The discussions are particularly significant given a recent agreement reached on patrolling along the Line of Actual Control (LAC) in eastern Ladakh, which is seen as a positive step towards reducing tensions.

Misri indicated that the recent agreement aims to restore the status quo in pending areas and emphasized the importance of continuing the disengagement process established in earlier discussions. Chinese Foreign Ministry spokesman Lin Jian expressed a positive outlook on the recent developments, highlighting ongoing communication between the two nations regarding border issues.

Significance of the Talks

This meeting is crucial as it is the first structured dialogue between PM Modi and Xi since 2019. Analysts see it as an opportunity to mend strained relations and potentially enhance political and economic ties. The Indian business community views this as a positive development, believing that improved diplomatic relations may lead to a revival of trade with China, which has seen a significant imbalance in recent years. In the last fiscal year, India's exports to China amounted to only $16.65 billion, while imports surpassed $100 billion, resulting in a trade deficit of approximately $85 billion.

Moreover, easing restrictions on Chinese investments could benefit India’s manufacturing sector and improve local output. The Indian government is reportedly open to facilitating joint ventures with Chinese firms, where the latter holds a minority stake.

Conclusion

PM Modi's upcoming talks with Xi signal a potential thaw in the historically frosty relationship between the two countries. The recent patrolling agreement indicates a willingness to address long-standing disputes, moving towards a more constructive engagement. As both nations seek to stabilize their relationship, this meeting could pave the way for improved ties and greater collaboration in various sectors.