World

Xi’s 2026 Delhi Visit Highlights Persistent Structural Gaps in India‑China Relations

By Sidharth Raimedhi

Chinese President Xi Jinping visited New Delhi in September 2026 for the BRICS summit, his first trip to India in seven years. The visit followed an agreement in October 2024 that ended a four‑year standoff over the Ladakh border by allowing joint patrolling rights. Since then, India has explored opening its economy to Chinese investment, joint ventures and bids, and analysts have linked the perceived thaw to the return of the Trump administration and the strategic and economic needs of both Beijing and New Delhi.

Despite these signs of rapprochement, structural divergences on the border and in economic relations are widening. The recalibration of U.S.–China ties has also caused unease in New Delhi. Xi’s visit has therefore been less momentous than expected, revealing a gap between hopes for a thaw and the underlying challenges that shape the bilateral relationship.

In the 2010s, India’s security focus shifted from Pakistan to China, leading to increased deterrence spending, infrastructure development, and a doctrinal shift from deterrence‑by‑denial to deterrence‑by‑punishment. India’s 2017 intervention at the Doklam plateau demonstrated its growing military capability. Indian strategic elites were cautiously optimistic about the balance, considering maritime options such as the Malacca Strait and preparing for a two‑front war. India’s partnership with the United States, the Indo‑Pacific, and the Quad was seen as a counterweight to China.

The 2020 border clash and the ensuing four‑year standoff forced India to adopt a defensive posture and abandon forward‑looking deterrence measures. India’s defense industrial ecosystem has lagged, while China rapidly expands its fleet of fifth‑generation fighter jets, producing 120 per year. India’s aging fleet and limited expansion have widened the military imbalance.

Following the 2020 clash, India chose economic retaliation over military compellence. Nationalist sentiment framed China’s economic policies as predatory, prompting initiatives such as Make‑in‑India and Production‑Linked Incentive schemes to attract domestic and foreign investment. However, manufacturing growth has declined relative to other sectors, and India’s reliance on Chinese capital, technology and exports has deepened.

China’s export controls in April 2026 disproportionately affected India, with key rare‑earth components critical to the automobile industry. Tarun Kapoor, an advisor to Prime Minister Narendra Modi, warned that “a country can hold us to ransom.” The controls also strained business visas for Indians and shipments of critical minerals, fertilizers and tunnel‑boring machines. Chinese analysts, including Hu Shisheng, have called for stronger economic retaliation, citing concerns that India could become a “super‑substitute” to China.

Before Xi’s visit, Beijing urged India to embrace liberalization toward Chinese businesses, citing India’s manufacturing failures, the benefits of continuous supply of sensitive technologies and critical minerals, and the potential for growth through closer economic cooperation. Yet territorial sovereignty concerns and economic distrust have kept India from fully opening its market. India’s Press Note 3, a sweeping restriction on Chinese investment, remains in force, and recent openings are limited and specific.

During the Xi‑Modi meeting, Modi emphasized that peace and tranquility at the border must underpin overall ties. India maintained a firm stance on the Taksing incident in Arunachal Pradesh, refusing Chinese advice to “not sensationalize” the border incident. Modi also criticized the weaponization of technology and critical minerals, and an Indian regulatory authority announced an investigation into Xiaomi for alleged irregularities.

India’s current China strategy, rooted in the early 2000s unipolar world, has been disrupted by geopolitical shifts, neighborhood constraints, and the widening military and economic gap. New Delhi is unlikely to adopt a competitive approach to Chinese coercion on trade or the border in the short term, preferring a sustainable strategy that balances denial at the border with political conciliation at the leadership level.

Addressing structural inequities will require deeper domestic economic and administrative reforms, improved relations with neighbors and like‑minded partners, and a sensitive handling of China while mitigating short‑term economic vulnerability and grey‑zone coercion at the border. The recent Xi‑Modi meeting underscored how deepening structural divergences limit the prospects for a win‑win economic relationship in the foreseeable future.