Xi India visit could deepen thaw, but business ties remain strained

Chinese President Xi Jinping’s expected visit to India this week may help ease tensions between the two Asian powers. Still, deep mistrust is likely to continue limiting business ties, analysts and company executives say, Reuters reported.

Xi is expected to attend the BRICS summit in New Delhi, his first visit to India in seven years. A meeting with Prime Minister Narendra Modi could give a welcome push to efforts to stabilise relations after years of tension following a deadly 2020 border clash.

Relations have gradually improved, with the return of border patrols and direct flights and some easing of limits on Chinese investment. Bilateral trade hit a record $155 billion last year and rose another 23% in the first seven months of this year, the Financial Times said.

But companies still face regulatory hurdles, visa delays and scrutiny of Chinese industrial equipment. Chinese companies, including BYD and Great Wall Motor, have cut planned investments and India has turned down some proposals from Chinese firms, Reuters reported.

The two governments are also talking about a framework for easing Chinese investment, but analysts say economic ties will depend on whether diplomatic progress can translate into increased trust.