‘Trump a great peacemaker’: Secret letter from Xi Jinping helps revive India-China ties; move to counter US tariff war

US President Donald Trump’s international tariff war has had one main consequence – India and China, the world’s second and fifth largest respectively – are rising nearer, with deal with commerce ties. The growth is critical since ties between the 2 neighbouring international locations had been strained in the previous few years.It seems that even earlier than Trump introduced his ‘Liberation Day’ tariffs in April, China had reached out to India, signalling willingness for financial collaborations. In March, when Trump escalated commerce tensions with China, Beijing initiated discreet diplomatic communications with India, in accordance to a Bloomberg report.

Xi Jinping’s secret letter

Chinese President Xi Jinping despatched a letter to President Droupadi Murmu to discover prospects of bilateral engagements. An Indian official with data of the state of affairs informed Bloomberg that the letter expressed worries about potential US offers that would have an effect on Chinese pursuits and designated a regional official to lead Beijing’s diplomatic initiatives. The message was subsequently conveyed to Prime Minister Narendra Modi, the report mentioned.Following Xi’s letter to Murmu in March of this yr, Beijing launched a assertion from the Chinese chief praising bilateral relations. His senior officers, together with Vice President Han Zheng, subsequently adopted comparable optimistic rhetoric to characterise the bettering relationship between the 2 nations.

Where India trades – and the place tariffs chew

Improving India-China ties

National Security Adviser Ajit Doval, who maintains dependable and direct communication with China’s senior management, is spearheading the diplomatic engagement. As India’s particular consultant for border negotiations, Doval undertook official visits to China in December 2024 and June 2025.The Indian administration started substantial efforts to improve Chinese relations in June, in accordance to the identical supply. This timing coincided with more and more troublesome commerce negotiations with the US, while New Delhi officers expressed frustration over Trump’s statements about mediating between India and Pakistan following their May confrontation.Also Read | ‘Deal dependent upon…’: India signifies no compromise on crimson strains for US commerce pact; ‘we cannot overlook some..’During July, S. Jaishankar, India’s External Affairs Minister, carried out his first assembly in 5 years with Wang Yi in Beijing. Jaishankar addressed considerations concerning “restrictive trade measures and roadblocks”, not directly highlighting Beijing’s current limitations on uncommon earth exports that affected provide networks. Officials in New Delhi confirmed that China offered assurances concerning the provision of fertiliser and uncommon earth supplies throughout these discussions.Subsequently, a number of optimistic developments emerged to strengthen bilateral relations. Both nations are making ready to restart direct flight providers as quickly as subsequent month. China has decreased restrictions on urea exports to India, while the Modi administration has reinstated vacationer visa providers for Chinese residents after a extended suspension.

Highest charges for ‘BICS’ nations

The Adani Group, led by Gautam Adani, is contemplating collaboration with Chinese electrical automobile producer BYD Co. for battery manufacturing in India, advancing their renewable power initiatives, Bloomberg News reported. Additionally, Reliance Industries Ltd. and JSW Group have been quietly pursuing enterprise preparations with Chinese corporations amidst bettering diplomatic relations, the report mentioned.By August, India-China relations confirmed indicators of enchancment. Both international locations, affected by Trump’s tariffs, took important steps to progress past their 2020 border battle by strengthening their dedication to resolve historic territorial disputes courting to colonial instances. Modi’s upcoming go to to China, his first in seven years, additional demonstrates this diplomatic development.

The US position in India-China ties getting higher

The United States’ rigorously cultivated relationship with India, developed throughout a number of administrations to counter China’s rising affect, now faces important challenges. The state of affairs shifted dramatically when Trump carried out 50% tariffs on Indian exports due to India’s Russian oil purchases, inflicting appreciable misery to Modi’s administration.“Trump is indeed the great peacemaker — he deserves all the credit for stimulating the incipient rapprochement between Delhi and Beijing,” Ashley Tellis, senior fellow on the Carnegie Endowment for International Peace and a former US diplomat in New Delhi, mentioned mockingly. “He has singlehandedly pulled this off by treating India as an enemy,” Tellis told Bloomberg.The scheduled meeting between Modi and Xi is set for September 1 during the Shanghai Cooperation Organisation summit in Tianjin, situated near Beijing.The compelling economic advantages of strengthening bilateral relations cannot be disputed.

Trump vs Xi – the tariff war to this point

The Chinese economy faces a slowdown amidst deflation, whilst grappling with surplus production in sectors like electric vehicles and solar panels. With its substantial population of 1.4 billion, predominantly young people, India presents a valuable market opportunity for China, particularly as it encounters growing trade barriers in the United States, European nations and other regions.Indian policymakers have begun to recognise the necessity of Chinese capital investment in manufacturing to achieve Modi’s target of raising the sector’s contribution to 25% of GDP. According to Bloomberg Economics, if substantial American tariffs persist, approximately 60% of India’s US-bound exports could cease, potentially reducing GDP by nearly 1% over the medium term.Also Read | Trump’s tariffs: India pivots toward China and Russia – should US be worried?Both nations’ regulatory constraints have hampered India’s economic growth aspirations. As reported by Bloomberg News, most Chinese employees at Foxconn Technology Group’s iPhone facilities in southern India were instructed to leave, whilst Beijing authorities have prompted regulatory bodies and regional governments to restrict technology transfers and equipment exports to India.“The financial prospects are large if the 2 international locations can settle variations and construct belief,” said Antara Ghosal Singh, a fellow at the Observer Research Foundation, a New Delhi based think tank.“Leaders of each international locations have usually spoken about financial prospects however have not been in a position to recover from belief points,” she said. “Trump is a good incentive for each international locations to rethink their choices,” she informed Bloomberg.