The outlook for India-China trade is “very bright”, Yu Lu, Vice President of the China Chamber of Commerce in India, said ahead of Chinese President Xi Jinping’s visit to New Delhi for the 18th BRICS Summit.

Yu Lu’s assessment comes at a significant moment for bilateral economic ties. Xi is scheduled to visit India on September 12–13, marking his first trip to the country in seven years. His visit is expected to include talks with Prime Minister Narendra Modi on issues including bilateral relations and economic cooperation.

Business Community Sees Scope for Expansion

Yu Lu’s comments point to growing optimism among sections of the Chinese business community about the potential for stronger commercial engagement with India.

The two economies remain closely connected despite several years of political and security tensions. Recent efforts to stabilise bilateral relations have included the resumption of direct flights, progress in border trade and greater people-to-people exchanges.

The Chinese Embassy has described economic and trade cooperation as an important area of the relationship, while Indian officials have also acknowledged the resilience and growth potential of bilateral commerce.

Trade Imbalance Remains a Major Challenge

The positive outlook, however, comes against a substantial trade imbalance.

India imported around $131.6 billion worth of goods from China in 2025-26, while exports to China stood at about $19.5 billion, leaving India with a bilateral trade deficit of more than $112 billion, according to recent trade data reported by Moneycontrol.

Reducing that imbalance is likely to remain an important issue as New Delhi seeks greater access for Indian products in the Chinese market.

India is also looking for greater certainty in areas such as investment, technology imports and critical supply chains.

Investment and Market Access in Focus

Economic engagement between the two countries has potential, but businesses continue to face regulatory and policy hurdles.

Ahead of the BRICS Summit, Indian officials have been preparing to discuss restrictions affecting investment by Chinese companies and difficulties surrounding imports of certain high-tech equipment from China.

These issues highlight the gap between political efforts to improve relations and the practical challenges faced by companies operating across the two markets.

For Chinese businesses, India represents a major consumer and manufacturing market. For India, Chinese technology, components and industrial equipment remain important to several sectors.

Xi Visit Could Open a New Economic Conversation

Xi’s India visit could provide an opportunity to address some of these commercial concerns at the highest political level.

The two countries are also looking at the possibility of establishing a more structured strategic economic dialogue, with trade deficits, market access, investment and other economic issues expected to feature in discussions.

Such a mechanism could give businesses a more predictable channel for raising trade and investment-related concerns.

Cross-Border Payments and Supply Chains

Financial connectivity is another emerging area of discussion.

India has been advocating greater use of local currencies and improved payment-system links within BRICS. At the same time, both India and China have an interest in maintaining reliable supply chains for industrial goods, technology and other critical inputs.

However, New Delhi's approach is likely to remain cautious. India wants stronger economic engagement without creating excessive dependence on a single external source for strategically important products.

A Cautious Economic Thaw

Yu Lu’s “very bright” assessment reflects the opportunities created by improving diplomatic engagement, but the broader picture remains more complicated.

Reuters reported that regulatory barriers, visa difficulties, security concerns and mutual distrust continue to constrain deeper business ties despite the recent diplomatic thaw.

For India and China, the next phase of economic relations will therefore depend on whether political engagement can translate into easier market access, greater investment flows, smoother trade procedures and more balanced commerce.

Xi’s visit may provide momentum, but turning that momentum into sustained business growth will require progress on those practical issues.