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India’s Prime Minister Narendra Modi is scheduled to visit China for the first time in over seven years, according to a government insider. This trip marks a possible easing of diplomatic tensions with Beijing amidst rising friction with the United States. Modi’s visit will be to participate in the Shanghai Cooperation Organization (SCO) summit, set to start on August 31.
This upcoming trip occurs during a period of strained US-India relations, with President Donald Trump enacting significant tariffs on Indian imports—among the highest in Asia—and warning of additional penalties related to Indian purchases of Russian oil.
Modi’s return to China will be his first visit to Tianjin for an SCO summit since June 2018. Since then, relations between China and India had worsened after a military skirmish along their Himalayan border in 2020. However, a recent encounter between Modi and Chinese President Xi Jinping during a BRICS summit in Russia in October 2024 has helped thaw some of the tension. The nations are gradually working to restore smoother relations that affect trade and travel.
Meanwhile, Trump has indicated that he might impose a further 10% tariff on imports from BRICS member countries like India, accusing them of aligning with anti-American policies. He also mentioned that his administration will decide on penalties related to Russian oil purchases after attempts to negotiate a ceasefire in Ukraine.
In Russia, US envoy Steve Witkoff is present to discuss Ukraine peace talks, just before a deadline for Russia to agree to a peace plan or face new sanctions. Over in Russia, India’s National Security Adviser Ajit Doval is also visiting, expected to discuss India’s ongoing Russian oil imports under US pressure, along with defense cooperation and possible talks about Russian missile systems and a potential visit by President Vladimir Putin to India in the near future.
Doval’s visit will be followed by Indian Foreign Minister Subrahmanyam Jaishankar’s upcoming trip.
Trade negotiations between the world’s largest economies—India and the US—have faced setbacks due to political misjudgments, missed signals, and accumulated bitterness. Despite bilateral trade exceeding $190 billion, India fears that US tariffs could cut into about $64 billion worth of exports (roughly 80% of total exports), though the overall impact on India’s economy, valued at about $4 trillion, might be limited.
The Reserve Bank of India has maintained its GDP growth forecast at 6.5% for the fiscal year through March, despite ongoing tariff uncertainties. It’s estimated that India will face an additional 10% penalty on Russian oil, bringing the total US tariffs on Indian exports to around 35%. The country’s trade ministry has yet to comment.
The government’s internal estimate indicates that India’s exports to the US in 2024 were approximately $81 billion, with potential losses in export revenue expected due to US tariffs. However, the precise effect will depend on how the tariffs are implemented and adjusted over time.
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