XI JINPING’S EXPECTED INDIA VISIT PUTS INDIA–CHINA BUSINESS RELATIONS UNDER THE SPOTLIGHT AS BOTH SIDES TEST A CAUTIOUS ECONOMIC RESET

Chinese President Xi Jinping’s expected visit to India for the upcoming BRICS summit is placing the future of India-China economic relations back into focus, with businesses on both sides watching closely to determine whether the recent diplomatic thaw can translate into greater trade, investment and technology cooperation. Xi’s anticipated visit would be his first to India in seven years and comes after several steps aimed at easing tensions that followed the 2020 border clashes. While diplomatic engagement has improved and some investment restrictions have been relaxed, significant barriers remain between the two economies. The business relationship is particularly complex because India depends on China for a range of industrial equipment, components, electronics inputs, solar-related products and other manufactured goods, while China remains an important market and trading partner. Bilateral trade has reached very high levels, but the imbalance between imports and exports remains a persistent concern for India. The recent easing of certain investment restrictions indicates that New Delhi recognises the economic value of greater engagement while continuing to maintain heightened scrutiny in sensitive sectors. India has moved towards faster consideration of some Chinese investment proposals in areas such as electronics, capital goods and solar-cell manufacturing, but major Chinese companies have remained cautious. Reuters reported that companies including BYD and Great Wall Motor have withdrawn or shelved planned investments after facing regulatory scrutiny. This illustrates the gap between diplomatic improvement and commercial confidence. Government-to-government relations can improve faster than corporate investment decisions because businesses consider long-term regulatory predictability, technology controls, market access, supply-chain security and geopolitical risk. Chinese companies also face restrictions and concerns on their side, including limitations relating to the transfer of sophisticated technology and equipment to India. The result is a relationship where both economies have strong commercial incentives to cooperate but continue to maintain strategic caution. A possible Modi-Xi meeting during the BRICS summit could therefore have economic importance beyond the immediate diplomatic symbolism. Leaders can potentially create political conditions for businesses to resume discussions, resolve administrative bottlenecks and develop clearer frameworks for investment. However, a single meeting cannot immediately eliminate the structural concerns that have developed since 2020. Companies need predictable rules over several years before committing large amounts of capital to factories and supply chains. For India, the opportunity is substantial. Chinese manufacturing expertise and supply-chain capabilities could help accelerate domestic production in sectors such as electronics, renewable-energy equipment, machinery and consumer products. But India also wants to develop its own manufacturing capabilities and avoid excessive dependence on a single external supplier. That creates a delicate balance between attracting investment and building domestic capacity. The same issue is visible in solar manufacturing, where India wants to expand domestic production while still relying on Chinese technology and equipment in parts of the supply chain. For Odisha, the India-China business relationship has an indirect but important relevance. The state is attempting to attract investment in solar manufacturing, renewable-energy equipment, critical minerals, electronics-related industries and advanced manufacturing. Some of these sectors depend on global supply chains in which Chinese companies have significant capabilities. Any change in India’s rules governing Chinese technology, investment or equipment could therefore affect project costs and implementation timelines. At the same time, greater domestic manufacturing capacity could create opportunities for Odisha if investors seek alternative production locations and supply-chain diversification. India’s broader strategy is increasingly focused on reducing strategic dependence while remaining connected to global manufacturing networks. That means the future relationship with China is unlikely to be simply one of cooperation or confrontation. It is more likely to involve selective engagement, competition and controlled economic interdependence. The upcoming BRICS summit could provide an opportunity to test whether the current diplomatic thaw can expand into practical economic cooperation. Businesses will be watching for signals on investment approvals, technology transfers, visas, industrial equipment, supply-chain access and market entry. For Neptune Talk, this is an important India business story because China remains too economically significant for Indian industry to ignore, while strategic concerns make unrestricted economic engagement equally difficult. The outcome of the next phase will depend not only on political meetings but on whether companies on both sides regain enough confidence to invest, manufacture and trade with longer-term certainty.