Xi Jinping's India visit to help diplomatic thaw, but business ties bound by suspicion
China's President arrived in New Delhi for the 18th BRICS Leaders' Summit (September 12-13, 2026), his first visit to India in seven years, hosted under India's BRICS chairship.
Despite the diplomatic engagement, commercial ties between the two countries remain constrained: Indian businesses report stalled investment approvals, visa delays for Chinese technicians, and restrictions on the import of industrial equipment.
Reports indicate that Chinese authorities have discouraged domestic companies from selling certain categories of technology and infrastructure equipment to India, including port equipment, solar panels, and mobile manufacturing machinery.
In March 2026, India eased some investment restrictions on Chinese capital that had been imposed after the 2020 border clashes, easing rules in select sectors such as electronics, capital goods, and solar cells — but broader liberalisation remains pending.
No bilateral leaders' meeting had been confirmed at the time of reporting, underlining that political normalisation and economic re-engagement are proceeding on separate, uneven tracks.
FDI Screening for Land-Border Countries (Press Note 3 of 2020)
Press Note 3 (2020), issued by the Department for Promotion of Industry and Internal Trade (DPIIT) on 17 April 2020, amended India's FDI policy to require prior government approval for any investment — direct or indirect — from an entity of a country sharing a land border with India, or where the beneficial owner of an investment is situated in such a country. It applies to Afghanistan, Bangladesh, Bhutan, China, Myanmar, Nepal, and Pakistan, and also covers transfers of existing ownership that would bring beneficial ownership within these jurisdictions. It was introduced to prevent "opportunistic takeovers" of Indian firms during the COVID-19-induced asset price fall, but in practice has overwhelmingly affected Chinese investment given China's scale as a source of FDI before 2020.
Key Details
- Issued 17 April 2020 by DPIIT under the Foreign Exchange Management Act (FEMA) framework; routes all such investment through the Government approval route (rather than the automatic route).
- Covers direct and indirect investment, including change of beneficial ownership in existing investments.
- March 2026 saw a partial easing in electronics, capital goods, and solar cell sectors — a shift toward calibrated, sector-specific relaxation rather than blanket rollback.
The "investment curbs" cited as a friction point in India-China business ties are, in substance, the continuing operation of Press Note 3 screening — a national-security-driven FDI mechanism that persists even as diplomatic contact resumes.
BRICS as a Multilateral Grouping
BRICS is a multilateral forum of major emerging economies, originally conceived as "BRIC" (Brazil, Russia, India, China) by economist Jim O'Neill in 2001, with South Africa joining in 2010 to form BRICS. It expanded in January 2024 to admit Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, and further admitted Indonesia in January 2025, taking full membership to eleven countries. Its principal financial institution is the New Development Bank (NDB), established in 2014 at the 6th BRICS Summit in Fortaleza, Brazil, and headquartered in Shanghai; it began operations in 2015 with an initial subscribed capital of USD 50 billion shared equally among the five founding members.
Key Details
- Current 11 members (2026): Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran, Saudi Arabia, UAE, Indonesia.
- NDB founded 2014 (Fortaleza Summit), HQ Shanghai, operations began 2015.
- India holds the BRICS chairship in 2026 (its fourth time, after 2012, 2016, 2021) and is hosting the 18th Leaders' Summit at Bharat Mandapam, New Delhi.
The visit is occasioned by the BRICS summit itself, illustrating how multilateral platforms can create space for bilateral diplomatic contact even when underlying bilateral economic frictions (investment screening, technology export limits) remain unresolved.
- China's President's visit is his first to India in seven years.
- 18th BRICS Summit: New Delhi, 12-13 September 2026; India chairing for the fourth time.
- BRICS expanded from 5 to 11 full members between January 2024 and January 2025.
- Press Note 3 (2020) applies to seven land-border-sharing countries: Afghanistan, Bangladesh, Bhutan, China, Myanmar, Nepal, Pakistan.
- NDB: founded 2014, HQ Shanghai, initial subscribed capital USD 50 billion.
- India eased select Chinese-investment restrictions (electronics, capital goods, solar cells) in March 2026.