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Modi Adviser Urges Deeper India-China Economic Ties

Bloomberg Markets •
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India should deepen economic ties with Beijing by opening the door to greater Chinese investment and reconsidering regional trade pacts as shifting geopolitics make the US a less dependable partner, an adviser to Prime Minister Narendra Modi said.

The recommendation marks a notable shift in tone from New Delhi, which has restricted Chinese capital and technology since a deadly 2020 border clash. The adviser argued that pragmatic engagement serves India's development goals, particularly in manufacturing and green energy, where Chinese expertise and capital could accelerate progress.

While security concerns remain paramount, the adviser suggested that economic compartmentalization — separating border disputes from trade and investment — could create space for mutually beneficial cooperation. This approach mirrors strategies employed by other US allies in the region who maintain robust commercial links with Beijing while managing strategic competition.

The proposal faces domestic political hurdles and skepticism within the security establishment. Any relaxation of investment screening or tariff barriers would require careful calibration to address data security, supply chain resilience, and public sentiment shaped by the ongoing military standoff along the Line of Actual Control.