India and China Agree to Strengthen Trade Talks and Rebuild Ties

India and China have agreed to hold further trade and economic talks as part of their efforts to improve relations following the military standoff in the Ladakh region. The two sides want to bring stability to their relationship following years of tension along the Line of Actual Control (LAC), which began in April-May 2020.

The recent talks were held between Indian Ambassador to China, Vikram Misri, and Sun Weidong, a senior Chinese official and former envoy to India. These discussions are part of ongoing efforts since October last year, when both countries agreed to withdraw troops from key friction points along the LAC.

India raised concerns about China's restrictions on rare earth exports, which are critical for making electric vehicles. China dominates the global supply in this area, and Indian manufacturers are worried about supply shortages. The external affairs ministry said both sides agreed to hold further "functional dialogues" on trade and economy to address such issues, but no specific concerns were listed in the official statement.

India also continues to worry about its limited access to Chinese markets and a widening trade deficit. In 2024-25, the trade gap between the two nations reached $99.2 billion. Ministry spokesperson Randhir Jaiswal said India has been in touch with Chinese officials in both New Delhi and Beijing, especially after China introduced export controls on certain rare earth items in April. He added that India is working to ensure smooth supply chains and fair trade.

Misri and Sun reviewed the progress made in bilateral relations since their last meeting in January and agreed to keep rebuilding trust. They discussed cooperation in other areas too, including a recent meeting on transboundary rivers. India is hopeful that China will resume sharing hydrological data, which is important for flood management and other uses.

The Chinese embassy called the talks “candid and in-depth.” Both sides agreed to prepare for the 24th meeting of the Special Representatives on the India-China boundary issue. The last such meeting was held in December 2024 in Beijing between India’s National Security Adviser Ajit Doval and Chinese Foreign Minister Wang Yi. China also said it supports restarting direct flights and allowing resident journalists to operate in each other’s countries again. These steps aim to boost people-to-people exchanges and help revive normal bilateral dialogue.

Sun highlighted that the recent improvement in ties is the result of joint efforts and should be maintained through long-term cooperation, increased trust, and better management of differences. Misri thanked China for helping to resume the Kailash Manasarovar Yatra, a spiritual journey that had been on hold since 2020 due to the pandemic and border tensions. Lastly, both sides talked about plans to celebrate the 75th anniversary of diplomatic relations between India and China and agreed to support events marking the occasion.