Modi and Xi are set to meet at BRICS with trade and border issues in spotlight

Chinese President Xi Jinping and Indian Prime Minister Narendra Modi meet on the sidelines of the BRICS summit in Kazan, Russia, on Oct. 23, 2024.

China Daily via Reuters

When the BRICS summit gets underway tomorrow in India, the meeting between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi will be among the most keenly watched events.

The meeting comes amid thawing relations between New Delhi and Beijing, and follows Modi's visit to China , although border disputes and trade imbalance remain sticking points between the the two countries.

Border issues between New Delhi and Beijing are expected to be on the agenda, a dispute that goes back decades and saw the two countries go to war in 1962.

While the 2020 conflict plunged relations into a deep freeze, the relationship between the two sides has improved markedly over the past year.

"The meeting between Modi and Xi is likely to further advance the ongoing reset in bilateral relations and build confidence. A meeting in August between the Chinese foreign minister and Indian national security advisor made notable progress on their longstanding border dispute," Chietigj Bajpaee, senior research fellow for South Asia at Chatham House, said in an article earlier this week.

Chinese Foreign Minister Wang Yi and India National Security Advisor Ajit Doval

Signaling improving ties, India and China have resumed direct flights, with New Delhi also relaxing in India.

New Delhi's rapprochement with China come as 

However, in a sign that distrust between India and China continues despite a thaw in relations, Beijing in August

Trade imbalance

India has a massive trade deficit with China, and has been dependent on exports from the world's second-largest economy.

China is India's this year.

When it comes to Beijing, India is particularly vulnerable because of it reliance on Chinese goods to boost domestic sectors. For example, predominantly relies on Chinese batteries, granting Beijing the power to scuttle New Delhi's ambitions.

China has has used rare earth as leverage against the U.S., and has reportedly employed measures detrimental to India's growth, with prominent Indian think tank the

For sectors where India is closer to self-sufficiency such as , New Delhi has also imposed trade restrictions on China. Meanwhile, China is wary of technology transfers to India as it could undermine Beijing's role in key global supply chains.

India, for example, is already emerging as a key supplier for Apple smartphones after the company started diversifying its manufacturing base away from China. As per the Indian government, the country is already the world's iPhone production, according to several media outlets.

As such, while any potential investment ties would be viewed positively, foreign direct investment liberalization between the two sides will proceed"cautiously, with guardrails remaining closely tied to geopolitical developments," said Radhika Rao, senior economist at DBS Bank.