China India Relations Improve Ahead of Modi-Xi Meeting

Foreign Ministry spokesperson Mao Ning said in a briefing that after the leaders’ meetings in Kazan and Tianjin, this will be the third consecutive year that Narendra Modi and Xi meet. She said China will work with India in line with the leaders’ strategic guidance, strengthen dialogue and cooperation and resolve differences “properly” from a strategic and long-term perspective.

Xi is due to arrive in India on Saturday for the BRICS summit and a bilateral meeting with Modi on the sidelines. The visit would be his first to India since 2019, when he met Modi in Mamallapuram near Chennai in an informal summit that also aimed to ease bilateral frictions.

For investors, a warmer tone lowers the risk of another escalation between two of the world’s biggest emerging markets, even if it does not erase structural competition. Indian assets and exchange-traded funds with China exposure were little changed in the latest session, with the India ETF INDA at $48.57, below its 50-day moving average of $49.38, while the China ETF FXI traded at $34.49, also under its 50-day average of $34.99, reflecting a market that has yet to price in a lasting diplomatic reset.

The broader backdrop is one of rising geopolitical sensitivity. China cast BRICS as a platform for the “Global South,” while saying the bloc should help resolve disputes through dialogue and contribute to peace and stability. With the summit taking place against the wars in Ukraine and tensions involving Iran and the U.S., the message from Beijing is that it wants BRICS to look constructive rather than confrontational.

That leaves the market with a familiar setup: improved diplomatic language, but few hard commitments. Any follow-through on trade, border management or investment will matter more than the rhetoric, and traders will watch whether the Modi-Xi meeting produces practical steps that can support sentiment across Indian equities, China proxies and the wider Asia trade.