India, China agree to 'properly address' economic and trade concerns in a balanced manner
On the sidelines of the 18th BRICS Summit held in New Delhi (September 12-13, 2026), the leaders of India and China held bilateral talks and reportedly reached what was described as the "most important consensus" of the meeting: that the two countries should be "partners, not rivals," each viewing the other's development as an opportunity rather than a threat.
Both sides agreed to jointly maintain peace and tranquillity in the border areas as a foundation for the broader relationship, and to support each other's roles in multilateral forums, including India's ongoing BRICS chairmanship.
Separately, India's Commerce Minister and China's Commerce Minister held their first ministerial-level trade talks in nearly seven years, agreeing to "properly address" economic and trade concerns "in a balanced manner" and to expand economic cooperation.
The engagement comes against the backdrop of a heavily lopsided bilateral trade relationship, with the two sides agreeing to build trust and improve market access, including for sectors such as pharmaceuticals.
Both governments indicated intent to increase coordination in multilateral forums such as BRICS while keeping the boundary question and trade engagement on separate institutional tracks.
BRICS — Origin, Expansion, and India's 2026 Chairmanship
BRICS began as "BRIC" — an acronym coined in 2001 by Goldman Sachs economist Jim O'Neill for Brazil, Russia, India, and China — and became a formal grouping with the first summit in 2009 (Yekaterinburg, Russia). South Africa joined in 2010, making it BRICS. At the 15th Summit (Johannesburg, 2023), the bloc admitted five new members effective January 1, 2024: Egypt, Ethiopia, Iran, and the UAE joined; Saudi Arabia was invited but has not yet formalised membership. India is hosting its fourth BRICS chairmanship in 2026, holding the 18th Summit in New Delhi (September 12-13, 2026) at Bharat Mandapam, under the theme "Building Resilience, Innovation, Cooperation and Sustainability."
The India-China leadership meeting took place specifically on the margins of the BRICS Summit hosted by India, illustrating how multilateral platforms are increasingly used for bilateral course-correction between major powers, distinct from the summit's own formal agenda.
Special Representatives (SR) Mechanism and WMCC — India-China Border Dispute Architecture
Border peace and the trade relationship are managed through entirely separate institutional tracks. The Special Representatives (SR) mechanism, established in 2003, is the highest-level channel (National Security Advisor-level from the Indian side) tasked with exploring a political framework for a boundary settlement. The Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC), established by an agreement signed in January 2012 during the 15th round of SR talks, is a joint-secretary-level diplomatic-military mechanism for day-to-day border management and de-escalation; it does not deal with the boundary question itself.
Key Details
- SR mechanism talks are periodic; the most recent rounds have continued to record incremental "consensus points" without resolving the underlying boundary dispute
- WMCC sits below the SR mechanism and handles ground-level friction management, distinct from military-level Corps Commander talks used during actual stand-offs (e.g., post-2020 Eastern Ladakh disengagement talks)
- The Line of Actual Control (LAC) is not a mutually demarcated international border, unlike the Line of Control (LoC) with Pakistan, which stems from the 1972 Shimla Agreement
The leaders' agreement to maintain "peace and tranquillity" in border areas reaffirms this institutional architecture as the precondition for normalising the broader relationship, including trade — a linkage India has consistently maintained since the 2020 border stand-off.
India-China Trade Relationship and the "Balanced Trade" Framework
India runs one of its largest bilateral trade deficits with China. Bilateral trade grew 7.9% in FY 2025-26 to approximately $127.7 billion (up from $118.39 billion in FY 2024-25), with India's imports from China far outpacing its exports — leaving a trade deficit estimated at over $100 billion for the year (estimates vary between roughly $99 billion and $112 billion depending on the data source and reporting period used). China has emerged as India's largest single trading partner by this measure. "Balanced trade" — a recurring term in this diplomatic exchange — refers to efforts to narrow this gap by improving Indian market access into China (e.g., for pharmaceuticals, agricultural goods) rather than merely restricting Chinese imports.
Key Details
- India stayed out of the RCEP (Regional Comprehensive Economic Partnership) in November 2019, citing concerns that a China-inclusive FTA would further widen its trade deficit and hurt domestic manufacturing and agriculture; RCEP today has 15 members (10 ASEAN states plus China, Japan, South Korea, Australia, and New Zealand)
- Since 2020, India has tightened FDI scrutiny on investments from countries sharing a land border with it (Press Note 3 of 2020), a measure aimed primarily at Chinese investment
- The Commerce Ministry-level trade talks (first at this level in nearly seven years) are distinct from and do not replace the SR/WMCC border talks — reflecting a deliberate separation of the economic and security tracks in India's China policy
The Commerce Ministers' agreement to "properly address" trade concerns "in a balanced manner" signals a possible incremental opening of dialogue on market access issues, even as the overall trade deficit remains a structural GS3 (Indian Economy) concern.
- 18th BRICS Summit: New Delhi, September 12-13, 2026 (India's 4th BRICS chairmanship)
- BRICS founding summit: 2009 (Yekaterinburg); South Africa joined 2010; expanded 2024 with Egypt, Ethiopia, Iran, UAE (Saudi Arabia invited, not yet formalised)
- Special Representatives mechanism on the India-China boundary question established: 2003
- WMCC (Working Mechanism for Consultation and Coordination on Border Affairs) established: January 2012
- India-China bilateral trade, FY 2025-26: approximately $127.7 billion (up 7.9% from $118.39 billion in FY 2024-25)
- India's trade deficit with China, FY 2025-26: estimated over $100 billion (roughly $99-112 billion across differing estimates)
- India withdrew from RCEP negotiations: November 2019
- This was the first India-China Commerce Minister-level meeting in nearly seven years