Indian Prime Minister Narendra Modi and Chinese President Xi Jinping pledged to strengthen business, transport and cultural links as they sought to rebuild relations damaged by the 2020 Himalayan border clash. Bilateral trade reached a record $155.6 billion in 2025, according to Chinese customs data, while India’s imports from China rose to about $132 billion in fiscal 2025/26, leaving New Delhi with a deficit of more than $100 billion. The two sides said they would address trade imbalances, supply-chain problems, red tape, visa delays and restrictions on industrial-equipment sales. Peace along the disputed border remains central to improving ties, even as military tensions have eased and substantial deployments continue. India’s dependence on Chinese machinery, electronic components, rare-earth magnets, materials and pharmaceutical ingredients supports its industrial ambitions but creates strategic exposure. Rising energy costs linked to the U.S.-Israeli war with Iran are also widening India’s global trade deficit and weakening its currency, while China’s nearly $1.2 trillion record trade surplus has intensified concern among trading partners.