China’s President to travel to the BRICS summit in India

Vishala Sri Pathma (0:00)

President Xi heads to India for Brics, is a new world order taking shape.

Ethirajan Ambarasen (0:06)

There is a huge trust deficit between the two countries.

Vishala Sri Pathma (0:10)

It's World Business Report from the BBC World Service.

I'm Vishala Sri Pathma. On the way, is the Brics event a gathering of emerging powers or a rival to the West? A little-noticed battle in Yemen could have big consequences for global trade. We look at why a small stretch of water matters so much and the mystery buyer who's snapping up second-hand books by the thousands.

So India will host the Brics Leaders Summit this weekend, looking to lift the bloc's global profile, even as the US-led war on Iran splits its membership with Tehran and the United Arab Emirates on opposing sides of the conflict. Brics was originally an acronym for Brazil, Russia, India, China and South Africa and has gradually expanded to welcome other countries that aren't members of the G7. A sign of its growing influence is the visit of China's President Xi to the conference in New Delhi. Now, a little earlier on, I spoke to the BBC's South Asia editor, Ethirajan Ambarasen, and I began by asking him if the talks might repair China and India's rather fraught relationship.

Ethirajan Ambarasen (1:26)

There have been some uncertainty over Xi Jinping's visit to this summit because it should have been announced much earlier. It was only 48 hours before the Chinese foreign ministry confirmed Mr Xi's visit to Delhi. It also, in a way, saved the government of Prime Minister Narendra Modi. In case if he had not turned up, that would have seen as a setbacks in what is restoring ties with China. Now, what happened in 2020 in a border dispute in the Ladakh region that resulted in a deadly clash in which 20 Indian soldier and four Chinese soldiers were killed. That led to major tension between the two countries for the past five, six years now. But both leaders have been meeting in some of the other international summits. Mr. Modi went to China August 2025, and they also met during the SCO summit recently.

Why this is important? Because the both sides have never agreed to resume flights from last year, and also issuing visas to businessmen and others visiting each other's country. So even though this is seen as an important step, but there is a huge trust deficit between the two countries in many other areas, including border as well as trade issues.

Vishala Sri Pathma (2:47)

Why now though? Because there does seem to be now a concerted effort with this visit.

Ethirajan Ambarasen (2:52)

Because both sides, there is a realisation that the trade has to go on despite the ongoing tension. And that's why we saw the flights resuming between the major cities. Especially for the businessmen, it was a huge problem. You know, India and China, they have a bilateral trade off about 130 billion in favour of China. And you go to, like any other country, you go to India, most of the products coming from China, especially for many of the industrial goods. So businessmen, they used to go to some other country, like Singapore, Malaysia before going to China. So the direct flights were not operating. That problem has been solved for the last one year or so. But the key issue is like India needs Chinese imports, especially in terms of technology and investment.

Whether it is talking about mobile communications or solar power, pharmaceutical ingredients coming from China, because India is one of the biggest producers of medicines and especially generic medicines. So the trade is very, very key for both countries. And that's why they are hoping that the meeting between the two leaders will help to thaw the relations between the two countries.

Vishala Sri Pathma (4:03)

And as you say, India still runs a huge trade deficit with China. Do you think that economic relationship will ever become more balanced rather than India just sort of becoming more dependent on Chinese imports?

Ethirajan Ambarasen (4:16)

The Indian government has been doing a lot of very concerted effort to have domestic industries that have been urging industries, encouraging them, giving them various incentives to produce many of these goods. But if you want to make any product, some of these components or even the minerals, they have to come from China at some point. So it's not going to be an easy task. That's one of the biggest complaints from India every time when they both sides talk. They wanted to balance the trade, but it's not only problem for India, it's also many other countries. But India, particularly because India is one of the biggest consumers, the world's most populous nation, and it needs critical technology, sophisticated modern technology as well as investment. And that is where the Chinese now seem to have the advantage.