Amidst escalating tariffs and pressure from the United States, relations between India and China are growing closer. PM Narendra Modi will visit China on August 31, 2025. The two countries may enter into trade agreements, which would be a setback for the United States and provide India with economic and strategic opportunities.
New Delhi: Amidst increasing tariffs and political pressure from the United States, India and China appear to be moving closer to each other. China is seeking new partners due to tensions with the US, while India is also affected by the Trump administration's 50% tariffs. PM Narendra Modi will visit China from August 31 to September 1, 2025, marking his first visit to China since the Galwan clash in 2020. It is believed that the two countries may enter into significant trade and partnership agreements, providing India with an opportunity to increase exports and China to alleviate economic difficulties.
US-China Dispute Changes the Environment
A trade dispute has been ongoing between the United States and China since 2018. The United States accused China of patent violations and unfair trade practices, imposing heavy taxes on billions of dollars worth of goods. In response, China also increased tariffs on American goods. This tension has affected the global supply chain. It was an opportunity for India to sell more goods to both countries, but initially, India could not take full advantage of it.
The situation changed further when Donald Trump was re-elected as President of the United States in 2025. He increased taxes on goods coming from China by up to 145%, while the tax on goods coming from India was only 26%. This gave India hope that its exports would increase, but six weeks later, an agreement was reached between the US and China, and the tax on goods coming from China was reduced to 30%.
New Tax Blow to India from America
In August 2025, the United States imposed a 50% tariff on goods coming from India. Meanwhile, countries like Bangladesh, Pakistan, and Sri Lanka were taxed at only 20%. This could make it difficult for India to compete in the American market because its goods will now be more expensive.
China's Signal of Friendship
According to Dr. Rajan Sudesh Ratna, a senior economist and Deputy Head of UNESCAP, China is currently trying to improve relations with India. India is also troubled by the Trump administration's attitude and is looking for new partners. The recent visit of the Indian Foreign Minister to China during the Shanghai Cooperation Organisation meeting is also considered part of this effort.
PM Modi will be in China on August 31 and September 1. Prior to this, he will attend the India-Japan Summit in Japan. This visit is taking place at a time when both countries are facing increasing pressure from the United States and are looking for new economic opportunities.
Increasing Closeness in Tourism
India and China are important members of the BRICS group. Since the meeting between PM Modi and Chinese President Xi Jinping during the BRICS summit in Kazan in 2024, efforts to reduce border disputes have intensified. On July 23, 2025, the Indian Embassy in China announced that Chinese citizens would be able to apply for Indian tourist visas from July 24. This step signals a softening in mutual relations.
Opportunities for India in Which Sectors?
China imports approximately $1.188 trillion annually, including many products that India also manufactures or can manufacture. These include electrical machinery, nuclear reactors, optical equipment, railway vehicles, plastic products, medicines, chemicals, aluminum, coffee-tea, spices, and meat products. India's global exports in these sectors are quite low compared to China's needs.
