India Weighs a Gradual Reset in Economic Engagement With China

• India is exploring a gradual reopening of economic ties with China, linked to reciprocal actions.

• Talks are shaped by global trade uncertainty and potential US tariff pressures.

• The approach favors selective, incremental easing rather than broad relaxation.

• India has already eased visas and travel norms; investment curbs are under review.

• Press Note 3 remains central, with any changes to be cautious and negotiated.

India’s leadership is considering a measured and step-by-step reopening of economic ties with China, according to people familiar with ongoing discussions. Any loosening of existing restrictions would be contingent on reciprocal actions from Beijing, reflecting New Delhi’s cautious approach as it navigates shifting global trade dynamics.

The conversations are unfolding amid uncertainty in international commerce, including the prospect of tougher tariff policies from the United States. Against this backdrop, policymakers are evaluating whether selective adjustments to current curbs could strengthen India’s economic position without compromising strategic interests.

Officials involved in the process suggest that the strategy under review favors incremental changes rather than a sweeping rollback of controls. Some movement has already occurred. Procedures for granting business visas to Chinese professionals have been streamlined, and authorities are now examining whether certain limitations on investment can also be eased in a controlled manner.

Government sources emphasize that progress will depend on mutual openness. While India has taken steps such as resuming direct flights, restarting visa issuance, and relaxing entry requirements for Chinese engineers working on critical infrastructure projects, China continues to restrict access for several categories of Indian services exports. This imbalance remains a central concern in the talks.

Preparatory work for a policy shift has been underway for some time. A senior committee led by NITI Aayog member Rajiv Gauba previously supported removing barriers to Chinese investment. In addition, the Economic Survey for 2023–24 made the case that attracting Chinese capital could enhance India’s export competitiveness.

India’s current framework stems from Press Note 3, introduced in April 2020, which requires government approval for investments from countries sharing a land border with India. Any change to that regime, officials stress, will be deliberate and closely negotiated.