Modi's Asia Trip Hints at New India Strategy

Prime Minister Narendra Modi has embarked on a crucial four-day visit starting Friday. His Japan visit will be followed by participation in the Shanghai Cooperation Organisation (SCO) Summit in China, where he is expected to hold

talks with global leaders, including Chinese President Xi Jinping and Russian President Vladimir Putin. His visits to Japan and China are highly significant due to shifting geopolitical alignments and critical bilateral issues. The importance of each trip differs substantially, reflecting India's complex diplomatic strategy of balancing its rivalry with China and strengthening its partnership with Japan.

The primary objectives of PM Modi's visit to Japan, scheduled for August 29–30, 2025, are to strengthen

economic security and deepen the "Special Strategic and Global Partnership". The visit will also include the 15th India-Japan Annual Summit, Modi's first with his Japanese counterpart, Shigeru Ishiba. Japan is expected to commit to a new, higher investment goal for India of 10 trillion yen (about $68 billion) over the next decade. This would double the previous target and focus on private-sector investment.

The two countries will launch a new bilateral framework to address economic security challenges. Key

areas of focus include building secure supply chains for critical goods like semiconductors and crucial minerals and cooperation in advanced technologies such as artificial intelligence (AI), communications, and clean energy. PM Modi and Shigeru Ishiba are likely to discuss the procurement of E10 bullet trains, being developed by East Japan Railway Company, for the 508-kilometre Mumbai-Ahmedabad High-Speed Rail Corridor of India. India is expected to push for better market access for its pharmaceuticals and textiles by reviewing the existing Comprehensive Economic Partnership Agreement (CEPA).

The Indian and Japanese PMs will reportedly review their "Special Strategic and Global Partnership", with a renewed focus on defence, security, and co-development of defence technology. Cooperation on maritime security and joint military exercises, such as the Malabar naval exercise, is a key component. The leaders will reaffirm their commitment to promoting a free and open Indo-Pacific.

The Japan News has reported that the Japanese and Indian governments aim to

formulate a plan to promote people-to-people exchanges, setting a target of more than 500,000 people over the next five years, according to sources close to the Japanese government. Tokyo aims to increase exchanges in government, industry, academia and other sectors, harnessing India’s dynamism to fuel Japan’s economic growth. Of the 500,000 people, 50,000 are expected to be highly skilled Indians with specialised knowledge who will work in Japan.

Following his visit to Japan, PM Modi will travel to China

for the Shanghai Cooperation Organisation (SCO) Summit on August 31-September 1. This will be his first China trip since the 2019 Galwan clash, signalling a cautious diplomatic thaw. With Xi Jinping, Vladimir Putin, and other leaders attending, the summit offers a chance to ease tensions, rebuild dialogue, and recalibrate Asia’s balance.

While trust deficits with China persist, India stresses multi-alignment, autonomy, anti-terror stance, and regional stability. The sentiments conveyed by China are also quite

encouraging. Chinese Foreign Minister Wang Yi said recently when he arrived for a two-day visit to Delhi that "the setbacks that we faced in the last few years were not in our interest". He added that India and China should view each other as "partners" rather than "adversaries or threats".

Despite his positive remarks, while some diplomatic and trade ties have recently resumed between India and China, major impediments still prevent full normalisation. The deep-seated geopolitical rivalry is driven by an ongoing border dispute

but also includes competition for influence in Asia and a massive trade imbalance.

The primary obstacle to full normalisation is the unresolved border dispute along the Line of Actual Control (LAC), which has been an irritant since the 1962 Sino-Indian War. The situation remains fragile despite some progress on de-escalation. India has insisted on restoring the "peace and tranquillity" that existed on the border before the deadly 2020 skirmishes, viewing a resolution of the border as central to the broader relationship. China, however, advocates improving the overall

bilateral relationship irrespective of the border issue.

While a border arrangement was reached in October 2024 on certain points, underlying fault lines remain, and further skirmishes cannot be ruled out. China sees its stronger military capabilities on the border as an advantage. As part of recent efforts to mend ties, both sides have agreed to new dialogue mechanisms to discuss border delimitation and management. However, any final settlement would require political compromise at the highest levels.

A fundamental geopolitical rivalry fuels strategic mistrust and makes lasting rapprochement unlikely. India and China are in a zero-sum security competition for influence in neighbouring regions, including South Asia, the Indian Ocean, and Southeast Asia. India's growing strategic and security cooperation with the US, Japan, and Australia via the Quad is viewed by China as an attempt to contain its influence. From Beijing's perspective, the relationship is unequal, with China in a superior position. It views India more tactically than strategically, which has led to

coercive tactics to serve China's interests.

Despite diplomatic tensions, a significant trade relationship exists, but it creates dependency and leverage issues for India. In 2024–25, India's trade deficit with China grew to nearly $100 billion. China's exports include essential electronics and raw materials that Indian industries depend on. This economic dependency makes India vulnerable to Chinese economic coercion. In July 2025, India called on China to avoid restrictive trade measures, referencing Beijing's restrictions on critical minerals like rare earth

magnets. While India seeks to diversify supply chains, its reliance on Chinese goods is not expected to decrease in the short term as it pursues higher economic growth.

In 2025, some steps have been taken to improve relations, signalling a desire to avoid further deterioration, particularly amidst a changing US foreign policy stance. Following high-level meetings in August 2025, both countries agreed to resume direct flights, reissue tourist visas, and reopen some border trade. Clearly, India is attempting to insulate its economic imperatives from the

security conflict to avoid further escalation, but this does not indicate a fundamental shift in the relationship. These moves are seen as restoring a fragile status quo rather than addressing the core issues of the border dispute and geopolitical competition, which continue to impede full normalisation.

China is driven to seek better ties with India primarily by economic motives and strategic geopolitical considerations. Facing protectionist pressures from the United States, Beijing sees improved relations with New Delhi as a

way to secure its economic interests and counter Western influence in the Indo-Pacific. This cautious rapprochement follows years of strained relations due to military clashes and ongoing border disputes. With a growing middle class, India represents a critical and expanding consumer market for Chinese exports. This is especially important as the US closes its market to Chinese goods through tariffs and other barriers.

Better trade relations would help both countries to "soften the blow" of tariffs imposed by

the US. China has signalled a willingness to offer more market access to Indian goods, which would help New Delhi manage its trade imbalance with Beijing and mitigate the impact of US trade policy. In an interview with the media in April 2025, Chinese Ambassador Xu Feihong indicated Beijing’s intent to welcome more premium Indian goods and help Indian businesses tap into China’s massive consumer market.

China seeks to expand its investments in India, particularly in technology, infrastructure, and

manufacturing. This would allow China to capitalise on India's growth and integrate India into its supply chains while providing India with needed technology and capital. China knows that despite India's efforts to become a manufacturing hub, India is still highly dependent on Chinese supply chains for key components, such as electronics and pharmaceutical ingredients. This reliance gives China leverage and an incentive to maintain economic ties.

There are also important geopolitical drivers which are

shaping China's policy. By improving relations with India, China can try to weaken the Quad alliance (comprising the US, India, Australia, and Japan) and push back against perceived Western containment strategies. China also wants to reduce tensions along the disputed Himalayan border, at least for now, to focus its military and diplomatic resources on other flashpoints like Taiwan. Recent high-level meetings have sought to establish mechanisms to manage border disagreements and prevent them from escalating.

From Beijing's perspective, normalising ties with India helps present an image of regional stability. Easing friction between the two Asian giants could also create a more predictable environment for Beijing's interests, including its massive Belt and Road Initiative projects in neighbouring Pakistan. High-profile diplomatic visits, such as Chinese Foreign Minister Wang Yi's trip to India in August 2025, are an opportunity for China to showcase diplomatic engagement and oppose "unilateral bullying acts", implicitly criticising US foreign policy.

Since the US imposed major new tariffs on India in August 2025, China has worked to improve its relationship with New Delhi. Beijing has indicated it will provide greater access to its markets for Indian goods to help India offset the impact of the US tariffs. Chinese officials have publicly condemned the US for imposing a 50 per cent tariff on Indian goods, with the Chinese Ambassador to India, Xu Feihong, explicitly stating that his country will "firmly stand with India to uphold the multilateral trading system".

The aggressive US tariff policy under the Trump administration has had the unintended consequence of pushing India and China closer together. Faced with US antagonism, India has been forced to recalibrate its foreign policy and seek better relations with its large northern neighbour. However, while China and India have economic incentives to collaborate against US tariffs, deep strategic rivalry and long-standing border disputes persist. Therefore, a fundamental realignment is unlikely, and India will continue to maintain a cautious stance towards China.

In conclusion, the recent improvements in China-India relations should be viewed as a calculated, tactical détente. India’s recalibration of ties with China is a textbook application of its policy of strategic autonomy, which prioritises national interests. While dialogue has resumed on issues like trade and people-to-people exchanges, deeper strategic and security cooperation remains unlikely. The trust deficit runs deep, and India views China with suspicion after the 2020 border clashes. While driven by a shared interest in managing border tensions and responding to a

shifting US foreign policy, the deep structural competition and distrust mean that a fundamental realignment of relations may not yet be on the horizon.

The writer is a retired Indian diplomat and had previously served as Ambassador in Kuwait and Morocco and as Consul General in New York. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.