Xi Jinping’s first visit to India in seven years has become the clearest sign yet of a tentative reconciliation between Asia’s two largest powers, although their disputed border, economic rivalry and wider strategic competition continue to limit how far the rapprochement can go.

Chinese President Xi Jinping received a ceremonial red-carpet welcome in New Delhi on Saturday as India hosted the BRICS summit, marking a highly symbolic moment in the gradual rebuilding of relations between the two Asian powers after years of military and diplomatic tension.

Xi’s arrival on September 12 was his first visit to India in seven years. He was welcomed with an Indian military honour guard and traditional performers before joining Prime Minister Narendra Modi and other leaders at the two-day summit.

Yet behind the elaborate ceremony lay a far more important diplomatic message. The visit represents the most visible evidence so far that India and China are attempting to stabilise a relationship that deteriorated sharply after the deadly confrontation between their soldiers in the Galwan Valley in June 2020.

Twenty Indian soldiers and four Chinese troops were killed during that clash along the disputed Himalayan frontier, bringing relations between the nuclear-armed neighbours to their lowest point in decades.

For several years afterwards, both countries deployed large numbers of troops, artillery and military equipment along the Line of Actual Control, while New Delhi imposed restrictions on Chinese investment, applications and technology companies.

Diplomatic engagement was reduced, direct flights were disrupted and economic relations became increasingly entangled with national-security concerns.

The atmosphere in New Delhi this weekend was deliberately different.

From confrontation to cautious engagement

Xi and Modi held bilateral discussions on the sidelines of the summit, with both sides signalling their intention to prevent disagreements from escalating into confrontation.

According to India’s foreign ministry, the two leaders expressed a commitment to addressing outstanding border issues and developing a more stable bilateral relationship.

Beijing, meanwhile, has said it is willing to work with India to manage differences and develop relations based on longer-term strategic considerations.

The language is significant because neither government is portraying the process as a dramatic reconciliation.

Instead, the emerging approach appears centred on managing rivalry.

India and China have gradually restored some diplomatic contacts, travel links and direct flights, while senior officials have resumed discussions over border management.

The objective appears to be less about eliminating competition than preventing another military crisis from overwhelming the broader relationship.

For two countries whose combined populations exceed 2.8 billion and whose economies are deeply connected to global supply chains, even limited stabilisation could have substantial consequences.

Economic ties remain complicated

Despite years of political tension, China remains critically important to Indian industry.

Indian manufacturers depend heavily on Chinese components, machinery, electronics, pharmaceutical ingredients and renewable-energy equipment. At the same time, New Delhi has become increasingly concerned about allowing Chinese companies deeper access to strategic sectors of its economy.

Those tensions have created an unusual relationship in which trade remains enormous while investment and technological cooperation are increasingly restricted.

Xi’s visit could create political space for some economic barriers to be eased, but expectations of a rapid commercial normalisation remain low.

Companies continue to face investment restrictions, visa delays and obstacles affecting the movement of industrial equipment and personnel between the two countries. Analysts therefore see a substantial gap between diplomatic improvement and genuine economic reconciliation.

India is also attempting to build its own manufacturing base through programmes designed to reduce dependence on Chinese supply chains, particularly in electronics, telecommunications, renewable energy and advanced technology.

That competition will not disappear simply because diplomatic relations are improving.

BRICS provides the stage

The choice of the BRICS summit as the setting for Xi’s return to India adds another layer of geopolitical significance.

BRICS began with Brazil, Russia, India, China and South Africa but has expanded substantially, incorporating countries including Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates.

The grouping now represents a large share of the world’s population and economic output and has become one of the principal forums through which emerging economies demand greater influence over global institutions.

For Beijing, BRICS is an important component of its strategy to promote a more multipolar international system and reduce Western—particularly American—dominance of global governance.

India shares some of those objectives but approaches the organisation differently.

New Delhi has repeatedly resisted attempts to portray BRICS as an explicitly anti-Western alliance. Modi has stressed that the grouping should represent the interests of developing countries without positioning itself automatically against the United States or Europe.

That distinction reflects India’s broader foreign-policy strategy.

While maintaining close relations with Russia and participating in organisations dominated by China, India has simultaneously expanded defence, technological and strategic cooperation with the United States, Japan, Australia and European partners.

It remains a member of the Quad alongside Washington, Tokyo and Canberra while also participating in BRICS and the Shanghai Cooperation Organisation.

That ability to operate across competing geopolitical camps has become one of the defining characteristics of Indian foreign policy.

A changing international environment

The cautious India-China thaw also comes at a moment of broader uncertainty in global politics.

Both Beijing and New Delhi have reasons to reduce unnecessary tensions while the international economic system becomes more fragmented and protectionist.

Trade restrictions, technological competition and shifting American policies have encouraged many major powers to diversify their diplomatic relationships.

For India, stabilising relations with China reduces the danger of simultaneously managing military pressure on its northern border while confronting regional security problems elsewhere.

For Beijing, improved relations with India could weaken efforts to construct a more unified strategic coalition designed to contain Chinese influence in Asia.

There are therefore pragmatic incentives on both sides.

But pragmatism should not be confused with strategic alignment.

The Himalayas still divide them

The most serious unresolved issue remains the disputed border.

India and China share a frontier of more than 3,000 kilometres, much of which has never been formally demarcated. Both countries claim territory controlled by the other, particularly in Ladakh and Arunachal Pradesh.

Military disengagement agreements have reduced immediate tensions in several locations, but large numbers of troops remain stationed across the Himalayan region.

Infrastructure construction has also accelerated.

India has expanded roads, bridges and military facilities near the frontier, while China has developed extensive transport and logistics networks across Tibet.

Those deployments mean that the possibility of another confrontation has not disappeared.

The relationship is also complicated by Beijing’s close strategic partnership with Pakistan, India’s principal regional rival.

China has invested tens of billions of dollars in Pakistan through the China-Pakistan Economic Corridor and remains one of Islamabad’s most important defence partners.

India, meanwhile, continues to deepen security cooperation with the United States and other countries increasingly concerned about China’s growing military power.

Neither development is likely to be reversed by the current diplomatic thaw.

Competition without confrontation

The meeting between Modi and Xi may therefore represent the beginning of a different phase rather than a return to the relationship that existed before 2020.

The emerging model appears to be one of controlled competition.

Both governments recognise that their strategic rivalry will continue, but they also have strong incentives to establish mechanisms preventing disputes from escalating into military confrontation.

The red carpet in New Delhi symbolised that shift.

Six years after soldiers fought with improvised weapons in the mountains of Ladakh, the leaders of Asia’s two largest powers are again publicly emphasising dialogue, economic development and diplomatic engagement.

But beneath the ceremonial photographs and carefully chosen language lies a relationship still defined by mistrust.

The border dispute remains unresolved. Economic competition is intensifying. Both countries seek greater influence across the developing world, and each views the other’s strategic partnerships with suspicion.

Xi’s visit therefore does not mark the end of India-China rivalry.

It may, however, signal something almost as important: a shared recognition that rivalry between two nuclear-armed powers does not have to become permanent confrontation.

For New Delhi and Beijing, the challenge after the BRICS summit will be turning that recognition into a durable framework—one capable of surviving the next border incident, trade dispute or geopolitical crisis.