Modi and Xi Meet in India, But the Real Story Is Who Controls the Supply Chain
Xi Jinping arrives in India for his first visit since 2019 with a delegation twice its size, a sign Beijing sees economic opportunity. But India's trade deficit with China has hit a record $112 billion, and New Delhi's green energy future depends on Chinese batteries. The BRICS stage masks a deeper contest.
Xi Comes to India — But With a Bigger Entourage and Clearer Stakes
Xi Jinping is arriving in India tomorrow with roughly 400 officials in tow, more than double the delegation that accompanied his 2019 visit. The scale of the entourage matters. It signals that Beijing views this moment — first Chinese leadership visit to India in five years — as an occasion worth taking seriously, not a ceremonial stop on a BRICS tour.
Modi, for his part, has every reason to welcome the image of a rapprochement with his powerful neighbor. Relations have warmed noticeably since the brutal border clashes of 2020. Direct flights have resumed. Cross-border trade and pilgrimages through Himalayan passes have been reinstated. In August, Chinese Foreign Minister Wang Yi and Indian National Security Advisor Ajit Doval met and expressed satisfaction with steady progress on the border dispute.
Yet satisfaction is a diplomatic word for something far more fragile. In that same month, Beijing reportedly denied Indian Army access to key patrolling points along the Line of Actual Control in Arunachal Pradesh — territory India administers but China claims. The border may be stabilizing, but the military reality on the ground remains unchanged. Trust is not being built; it is being managed.
The Numbers Behind the Thaw
The economic relationship between India and China tells a story that the photographs of handshakes at BRICS cannot capture.
Total bilateral trade reached a record $151.1 billion in the year ending March 2026. But India’s trade deficit with China has surged to $112.16 billion, up from $99.21 billion the prior year. That is not a partnership of equals. That is a dependency, and New Delhi knows it.
China is India’s largest business partner by volume, but the asymmetry runs deeper than headline trade figures. India’s push for green energy infrastructure — a centerpiece of Modi’s domestic agenda — is overwhelmingly supplied by Chinese batteries. No alternative supplier exists at the scale China commands. This gives Beijing a form of leverage that does not require tariffs or sanctions. It simply requires controlling the valve.
The Observer Research Foundation, one of India’s most respected think tanks, has called Chinese rare earth export controls a “national security challenge.” Beijing used those same controls as leverage against the United States during the Trump-era trade war. The question every Indian policy circle asks quietly is whether it could be employed again — this time against India itself.
Tech Decoupling Is Already Happening, Even If Diplomacy Says Otherwise
The most concrete example of India-China economic tension plays out on a factory floor, not a summit dais. India is now the world’s second-largest mobile phone maker, largely because Apple shifted significant iPhone production from China to Indian contract manufacturers. It is a flagship success story for Modi’s Make in India campaign.
China pushed back. In 2023, Beijing banned engineers and equipment from reaching Apple’s Indian factories, disrupting production for weeks. The restriction was never officially acknowledged as a retaliation, but the timing spoke for itself. China understood that India’s rise as an alternative manufacturing hub threatened Beijing’s own position in the global supply chain — and it acted to slow the transition.
This is the real subtext of the Modi-Xi meeting. Both governments understand that economic interdependence is not symmetrical. India needs Chinese batteries and pharmaceuticals. China needs India’s market and, increasingly, its manufacturing capacity as a hedge against complete Western decoupling. Neither side wants a full break. Both sides are preparing for one anyway.
India’s Multi-Polar Bet Is Not a Signal of Trust in China
New Delhi’s strategic calculus deserves attention. While engaging Beijing, Modi has simultaneously struck resource deals with Australia, Indonesia, and Uzbekistan. Trade agreements have been finalized with the United Kingdom and the European Union. The timing is not coincidental. India’s second Trump administration has been strained over trade and tariffs, pushing New Delhi to diversify its partnerships proactively.
At the recent SCO summit in Kyrgyzstan, Modi signed the Bishkek Declaration alongside Xi and Putin, condemning military attacks against Iran without naming the United States. Experts told CNBC that New Delhi is using multilateral forums to demonstrate the strength of its multi-polar alignment — a message aimed as much at Washington and Beijing as it is at any other capital.
Chatham House’s Chietigj Bajpaee described this as “strategic hedging,” and the term fits. India is not aligning with China. It is avoiding alignment with anyone. The BRICS stage allows Modi to project exactly that: engagement without endorsement, cooperation without concession.
What Happens Next — And Why It Matters Globally
BRICS was never designed to resolve geopolitical disputes between its members. As Carnegie India’s Vrinda Sahai noted, the grouping came into being to reform global financial and governance architectures, not to solve India-China border conflicts. Expecting a breakthrough on the Line of Actual Control would misread the purpose of the summit entirely.
What is more significant — and what English-language coverage rarely connects — is the structural shift playing out beneath the diplomatic theater. India and China are learning, slowly and unevenly, how to coexist with profound mutual distrust while remaining each other’s most important trading partner. That is not a sustainable equilibrium. But it is the present reality.
For the rest of the Global South, the India-China dynamic at BRICS is a blueprint. Both nations are demonstrating that economic necessity and strategic competition can operate on parallel tracks without collapsing into conflict. For countries watching from Africa, Latin America, and Southeast Asia, the lesson is clear: hedging is not weakness. It is survival.
The images from Kazan and New Delhi will show two leaders exchanging pleasantries. The story they are telling is far more consequential — and far less comfortable — than any handshake.