Xi's India visit to help diplomatic thaw, but business ties bound by suspicion
NEW DELHI/BEIJING: Chinese President Xi Jinping’s much-anticipated visit to New Delhi this week, his first to India in seven years, should further the diplomatic thaw between the giant neighbours, but there are few signs as yet that their business ties will improve. Businesses in both countries continue to face hurdles, including investments stalled by regulations, visa delays and restrictions on…
Chinese President Xi Jinping is set to visit India this week, marking his first trip to the country in seven years. The visit aims to improve diplomatic relations between the two nations, but business ties remain hindered by various obstacles. Experts note that while diplomatic progress has been made, economic ties have not kept pace, with ongoing issues such as regulatory delays, visa restrictions, and limitations on industrial equipment.
Xi's visit coincides with the BRICS summit in New Delhi, though his exact schedule remains unclear. A significant meeting between Xi and Indian Prime Minister Narendra Modi is crucial for shaping future bilateral relations. India and China fought a brief war in 1962, and relations soured again following a 2020 border clash that resulted in the deaths of 20 Indian and four Chinese soldiers.
However, ties have improved recently, especially after Modi's visit to China last year and as both nations face volatile relationships with the US.
Despite China's economic strength, an "impassable trust deficit" exists between the two countries. China has eased some restrictions on Chinese investment, focusing on electronics, capital goods, and solar cells. However, major Chinese companies like BYD and Great Wall Motor have shelved planned investments due to increased scrutiny from New Delhi.
India has also proposed tighter scrutiny of Chinese investments, particularly in sectors involving advanced manufacturing and high-tech. Visa and equipment approvals from China have been delayed, reflecting China's strategic use of India's trade and technology dependence as leverage. A meeting between Modi and Xi could help overcome some barriers, but ultimately, commercial ties will depend on mutual economic interests.
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