India and China are gradually adjusting their trade dynamics, with China recently easing restrictions on key exports to India. This development follows high-level diplomatic engagements and reflects a shift toward a more pragmatic global outlook. Despite signs of improving ties and ongoing conversations, several unresolved issues remain between the two countries.

In a notable move, China has lifted curbs on the export of vital goods such as fertilisers, rare earth materials, industrial magnets, and tunnel boring machinery to India. This signals renewed energy in trade relations between the two Asian giants.

The change comes on the heels of last month’s discussions between Indian External Affairs Minister S. Jaishankar and Chinese Foreign Minister Wang Yi. During his ongoing two-day visit to New Delhi, Wang informed Jaishankar that Beijing had responded positively to India’s requests, with shipments of the previously restricted items already underway, according to official sources.

This signals a strategic recalibration of ties. Both sides seem to recognize the importance of cooperating in critical sectors to reduce supply chain pressures and bring more stability in a volatile global climate. Rather than a relationship driven by emotion, this shift appears rooted in practical considerations—engaging where interests align, managing disputes carefully, and working toward a more stable and structured bilateral framework.

At the same time, India is facing fresh tariff concerns in its trade engagement with the United States, where disputes over duties on steel, aluminum, and other sectors continue to simmer. Against this backdrop, India’s closer cooperation with China could serve as a balancing factor, ensuring that it has alternative trade partnerships to fall back on. For Beijing too, working with New Delhi helps diversify its economic options amid global tensions. This makes India-China collaboration not just regionally significant but also strategically important in the evolving world trade order.