No genuine convergence yet after Modi-Xi meet: Ex-envoy Meera Shankar

Prime Minister Narendra Modi’s first visit to China in seven years comes at a moment of global trade turbulence and strained bilateral ties, with his meeting with Chinese President Xi Jinping in Tianjin seen as an attempt to stabilise relations after years of border tensions.

In an exclusive interview with The Federal, Meera Shankar, former Indian ambassador to the US, said the talks signal a cautious step-by-step approach to rebuilding trust while balancing economic and strategic compulsions.

We witnessed the much-awaited handshake between Prime Minister Modi and Chinese President Xi Jinping — arguably, this has been the handshake of the year — a moment that has been a long time coming. What are your initial thoughts?

Well, my initial thoughts are that this is a moment of considerable global turmoil and therefore, both countries have an interest in seeing what they can do to make the global situation a little more stable.

Secondly, I think India is trying to stabilise its relationship with China, and this precedes the current turmoil over the tariffs imposed by the US. Right since the Prime Minister's meeting with Xi Jinping in Kazan last year, the two sides have been trying to see how they could improve the border situation in Ladakh, where friction points and conflict had occurred.

Also read: Modi, Xi vow fair resolution of boundary issue, stress partnership over rivalry

Two disengagements took place at friction points in the Ladakh sector after the talks in Kazan but de-escalation, which means reducing the military confrontation, still has to take place. There are 50,000 to 60,000 troops on the border on both sides. So, the next step would be to try to stabilise the border situation and then consider a number of other steps, including putting in place confidence-building measures on the border, which were shattered when China broke peace in Ladakh and also looking at the possibilities of bilateral developmental cooperation.

I think China has put a squeeze on the export of critical minerals and rare earths, which impacts a number of sectors such as renewable energy, electric vehicles and others that need these inputs.

It is not what I would call an anti-American meeting, because the whole process of stabilisation preceded the current developments, but you could say that the turmoil generated by unilateral American tariffs has perhaps lent some urgency to geopolitical rebalancing for India.

From India’s side, this is an important concern, while from China’s, they may look for some easing of FDI restrictions imposed during COVID-19, which are not China-specific but apply to all neighbouring countries, subjecting them to special security scrutiny.

Also read: Can Modi balance US tariffs, Russia-China ties? Expert explains

Thirdly, I suppose both sides will also discuss how they can work together in the global situation, because multilateralism at the moment is under threat, and what India and China, along with other countries such as Brazil or Russia, can do to improve the situation and ensure that some rules of the game are followed.

So, it is not what I would call an anti-American meeting, because the whole process of stabilisation preceded the current developments, but you could say that the turmoil generated by unilateral American tariffs has perhaps lent some urgency to geopolitical rebalancing for India. At the same time, India is very conscious of the limitations, since this has to be a step-by-step process, where trust needs to be re-established.

You have been a seasoned diplomat yourself — could you give us a sense of what really goes on behind those closed-door meetings?

Conversations take much longer because there is a double time, first for talking and then for translation.

Secondly, they tend to be more formal since there is a script that must be translated, so the exchanges naturally become more structured.

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For both India and China, many of these meetings also have to be prepared in advance, with outcomes mapped out beforehand.

For instance, during the visit of Chinese Foreign Minister Wang Yi, certain steps were identified — including the renewal of visas for Chinese tourists by India, the reopening of the Kailash-Mansarovar pilgrimage, the reopening of border trade through agreed checkpoints, and the decision to set up a group under the official mechanism on coordination and consultation on the border, anchored in the Ministry of External Affairs — to explore a possible early harvest agreement on the boundary.

We don’t yet know what this implies, though there has been speculation that it could relate to the Sikkim sector, where there are no disputes, but clarity will only come once an agreement is signed.

From India’s perspective, military de-escalation on the border remains critical, along with steps to rebuild confidence-building measures through diplomatic and military channels, including the reactivation, expansion, or renewal of existing mechanisms.

Also read: SCO Summit | India’s balancing act: US tariffs, Russia oil, China support

Equally important is the economic partnership, because while China is India’s largest trade partner in goods, and the US the largest in goods and services combined, Beijing maintains a massive trade surplus with New Delhi of over a hundred billion dollars.

For India, it is essential that China buy more from us or consider sharing key technologies for India’s emerging sectors; otherwise, the economic relationship will remain unbalanced and unsustainable in the long run, given India’s need to build domestic capacities and generate employment.

Both sides, therefore, are proceeding cautiously, with a step-by-step approach that will be key to rebuilding trust. I don’t think there will be any grand breakthrough in the relationship, but rather measured steps to improve the overall environment, de-escalate the border situation and strengthen cooperation on global issues.

Do you see this as a genuine thaw in India–China ties, or more of a tactical pause?

No, it has the possibility of a thaw, let’s say, but it is something that will have to be built step by step.

At each stage, we would need to reassure ourselves that we can continue to repose confidence in China because they really blindsided us with their incursions into Ladakh, where confidence-building mechanisms had worked for over two decades before being suddenly and completely violated.

Given that experience, I think India will proceed, perhaps with eyes wide open.

China has been reaching out to several countries as it faces American tariffs under US President Donald Trump. To what extent is its outreach to India driven by Beijing’s compulsions? At the same time, India too faces its own pressures. Would you say this meeting is shaped more by mutual compulsions than by genuine convergence?

Yes, I don’t think there is any genuine convergence as yet, because I am not sure that China does not still seek to dominate Asia. For India, the task is to test how far China is willing to accommodate its aspirations and recognise them as legitimate, particularly within South Asia and in the wider Asian context.

Also read: Trump shelves India visit for Quad Summit amid strained ties with PM Modi: Report

As Manmohan Singh once observed, the global economy is large enough to sustain two major economies such as India and China growing simultaneously and if both continue to grow, they can serve as engines for the global economy. So the idea, for now, is to explore the possibilities while remaining conscious of the limits that may exist. I also want to shift focus to what is happening in the United States.

India enjoyed a strong relationship with the US during the previous administration, even under Trump 1.0. But now, ties appear more strained, with Washington pushing back on several fronts. Do you see this as a temporary phase, or is it pushing countries like India and China to explore new diplomatic groupings?

Well, I would hope that this is only a temporary phase because India and the US do not have a fundamental conflict of interest. We do not have a territorial dispute, nor is the US a neighbour sitting on our boundary with overlapping issues and friction points.

In fact, it has been a good economic partner for India, both in terms of the overall volume of exports to the US market and in technological as well as financial tie-ups. So, I would hope that this partnership is not something that goes out of the window.

But President Trump has come to office on a platform of imposing tariffs to prevent what he sees as freeloading by other partners on the US economy.

While his initial target, including during his campaign, was China—because of its enormous trade surplus with the US, almost $300 billion—the deficit with India is far smaller. Last year, it was about $41 billion in goods trade and perhaps $45 billion when you include goods and services together — usually ranging between $20 to $30 billion — which is not huge.

So even if the US were to take action against India, it would not significantly address America’s ballooning trade deficit or really solve its structural problems of excessive imports versus limited exports.

For India, however, the US is our largest trading partner—a position neither China nor Russia can fulfill. With Russia, the economic relationship has traditionally been thin, though the strategic and security relationship has been strong, particularly in defence purchases, nuclear energy, and space cooperation.

More recently, India has begun buying Russian energy, and while trade has grown, it remains one-sided because Russia does not buy much from India, and with its overstretched economy, it is unlikely to expand purchases significantly.

With China, the relationship is even more complex, as they have largely seen India as a competitor and already suffer from overcapacity in production, while the world itself is becoming more protectionist, making it difficult for them to export at previous levels.

This is why countries like India become important as additional markets. But for India, this poses its own challenges, since we too are looking for markets and trying to build our manufacturing sector. Therefore, there are limits to how far economic partnerships with Russia and China can go, though they will remain an important aspect of geopolitical rebalancing—an effort to move towards greater multipolarity in international relations, rather than tilting too much in any one direction.

Given Beijing’s continued closeness with Islamabad, does the Pakistan factor limit how far India-China relations can realistically progress?

Yes, but that is one factor and a long-standing one, because China essentially helped build Pakistan’s nuclear and missile programmes. More recently, during Operation Sindoor, it was even providing targeting information and intelligence support to the Pakistani military.

This has always been a disquieting element, though it has remained a constant since the 1970s. India’s bilateral relations with China have tended to fluctuate more on what China does directly with us, rather than with Pakistan, where support has been steady.

At times, China has tilted slightly toward establishing a diplomatic balance in South Asia, but most of the time it has leaned heavily toward Pakistan.

With the Belt and Road Initiative, that support has taken on even greater weight, as Pakistan has become integral to China’s own search for energy security.

Pipelines from the Gulf through Pakistan up to Xinjiang allow China to bypass the constraints of the Straits of Malacca, giving Pakistan strategic importance far beyond being a mere irritant for India. Its role now ties directly into China’s long-term energy-security policy, which makes the relationship much more substantial.

India, therefore, will watch this space closely and continue to proceed cautiously, step by step, without seeking any grand sweep, while always being conscious of the limits. With the US, meanwhile, it is important to recognise its unique place as an economic partner—one that cannot easily be replaced by any of the other great powers.

At the same time, India will need to invest more deeply in relationships with middle powers such as Japan, Australia, France, Brazil, and Indonesia, while continuing to engage the US.

Broadly, the government has defined its policy towards Washington as one of avoiding confrontation but also not compromising India’s independence of decision-making.

What would you consider a realistic outcome from this meeting — and what would be an over-expectation?

No, I think in this meeting there will be steps announced, perhaps confirming some of the measures already decided at the NSA level, with timelines likely set for their implementation.

There could also be a broader discussion on re-establishing greater trust between the two countries and exploring how India and China might work together at the global level to reduce the turmoil and unilateralism that the world is currently facing.