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Reeling from Trump’s tariffs, India and China seek a business reboot

Published

7 months ago

2025/08/31

Priyan

Modi and Xi last had a bilateral meeting in 2017 [BBC]

India’s Prime Minister Narendra Modi landed in China on Sunday with the sting of Donald Trump’s US tariffs still top of his mind.

Since Wednesday, tariffs on Indian goods bound for the US, like diamonds and prawns, now stand at 50% – which the US president says is punishment for Delhi’s continued purchase of Russian oil.

Experts say the levies threaten to leave lasting bruises on India’s vibrant export sector, and its ambitious growth targets.

China’s Xi Jinping, too, is trying to revive a sluggish Chinese economy at a time when sky-high US tariffs threaten to derail his plans.

Against this backdrop, the leaders of the world’s two most populous countries may both be looking for a reset in their relationship, which has previously been marked by mistrust, a large part of it driven by border disputes.

“Put simply, what happens in this relationship matters to the rest of the world,” Chietigj Bajpaee and Yu Jie of Chatham House wrote in a recent editorial.

“India was never going to be the bulwark against China that the West (and the United States in particular) thought it was… Modi’s China visit marks a potential turning point.”

India and China are economic powerhouses – the world’s fifth and second largest, respectively.

But with India’s growth expected to remain above 6%, a $4tn (£3tn) economy, and $5tn stock market, it is on the way to moving up to third place by 2028, according to the International Monetary Fund (IMF).

“While the world has traditionally focused on the single most important bilateral relationship in the world, US and China, it is time we shift more focus on how the second and would-be third largest economies, China and India, can work together,” says Qian Liu, founder and chief executive of Wusawa Advisory, based in Beijing.

But the relationship is deeply challenging.

The two sides have an unresolved and long-standing territorial dispute – that signifies a much broader and deeper rivalry.

Violence erupted across Ladakh’s Galwan Valley in June 2020 – the worst period of hostility between the two countries in more than four decades.

The fallout was largely economic – a return of direct flights was taken off the table, visas and Chinese investments were put on hold leading to slower infrastructure projects, and India banned more than 200 Chinese apps, including TikTok.

“Dialogue will be needed to help better manage the expectations of other powers who look to India-China as a key factor of Asia’s wider stability,” Antoine Levesques, senior fellow for South and Central Asian defence, strategy and diplomacy at IISS, says.

There are other fault lines too, including Tibet, the Dalai Lama, and water disputes over China’s plans to build the world’s largest hydroelectric power project across a river shared by both nations, as well as tensions with Pakistan after the Pahalgam attack.

India also does not currently enjoy good relations with most of its neighbours in South Asia, whereas China is a key trading partner for Pakistan, Bangladesh, Sri Lanka and Afghanistan.

“I would be surprised if a BYD factory is coming to India, but there may be some soft wins,” Priyanka Kishore, founder and principal economist at research company Asia Decoded, says.

It’s already been announced that direct flights will resume, there may be more relaxations on visas, and other economic deals.

However, the relationship between Delhi and Beijing is “an uncomfortable alliance to be sure”, notes Ms Kishore.

“Remember at one point, the US and India were coming together to balance China,” she adds.

But India is completely perplexed with the US and its position: “So it’s a smart move – and feeds into the multipolar narrative that both India and China believe in.”

Modi is travelling to China for the Shanghai Cooperation Organisation (SCO) – a regional body aimed at projecting an alternative worldview to that of the West. Members include China, India, Iran, Pakistan and Russia.

In the past, India has downplayed the organisation’s significance. And critics say it hasn’t delivered on substantial outcomes over the years.

The June SCO defence ministers’ meeting failed to agree on a joint statement. India raised objections over the omission of any reference to the deadly 22 April attack on Hindu tourists in Indian-administered Kashmir, which led to the worst fighting in decades between India and Pakistan.

But experts say the downturn in Delhi’s relations with Washington has prompted India to rediscover the utility of the SCO.

China, meanwhile, will value the optics of Global South solidarity amid Trump’s tariff chaos.

The Brics grouping – of which China, India, Russia, Brazil and South Africa are the founding members – has drawn the ire of Trump, who has threatened to slap additional tariffs on group members on top of their negotiated rates.

Getty Images Employees work on the SMT (surface mount technology) shop floor where components are mounted on a PCB (printed circuit board) at Padget Electronics Pvt., a subsidiary of Dixon Technologies Ltd., in Noida, India. — *Chinese smartphones manufactured in India hold a significant market share too. [BBC]*

Modi last met Xi and Russia’s Vladimir Putin at the Brics summit in Russia in October 2024. Last week, Russian embassy officials said Moscow hopes trilateral talks with China and India will take place soon.

“Leveraging each of their advantages – China’s manufacturing prowess, India’s service sector strengths, and Russia’s natural resource endowment – they can work to reduce their dependence on the United States to diversify their export markets and ultimately reshape global trade flows,” Bajpaee and Yu said in their editorial.

Delhi is also leveraging other regional alliances, with Modi stopping in Japan on the way to China.

“Asean and Japan would welcome closer co-operation between China and India. It really helps in terms of supply chains and the idea of Make in Asia for Asia,” Ms Kishore says, referring to the political grouping comprising 10 Southeast Asian economies.

India continues to be reliant on China for its manufacturing, because it sources raw materials and components from there. It will likely be looking for lower import duties on goods.

India’s strict industrial policies have so far held it back from benefiting from the supply chain shift from China to South East Asian countries, according to experts.

There is a case for partnership, a strong one, says Ms Kishore, where India pitches to manufacture more electronics.

She points out that Apple makes airpods and wearables in Vietnam, and iPhones in India, and so there would be no overlap.

“Faster visa approvals would be an easy win for China as well. It wants market access in India either directly or through investments. It’s dealing with a shrinking US market, it’s already flooded Asean markets, and a lot of Chinese apps like Shein and TikTok are banned in India,” says Ms Kishore.

“Beijing would welcome the opportunity to sell to 1.45 billion people.”

Given the complexity of the relationship, one meeting is unlikely to change much. There is a long way to go on improving China-India ties.

But Modi’s visit to China could repair some animosity and send a very clear signal to Washington that India has options.

[BBC]

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CEYPETCO Fuel prices increased from midnight today (21)

Published

2 hours ago

2026/03/21

Priyan

The Ceylon Petroleum Corporation (Ceypetco) has announced a revision of fuel prices, effective from midnight today (21).

Accordingly,

Auto Diesel – Rs. 382 (increased by Rs. 79)

Super Diesel – Rs. 443 (increased by Rs. 90)

Petrol 92 Octane – Rs. 398 (increased by Rs. 81)

Kerosene – Rs. 255. (increased by Rs. 60)

Petrol 95 Octane – Rs. 455 (increased by Rs. 90)

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Advisory for Severe Lightning issued for Galle, Matara, Kaluthara and Rathnapura districts

Published

9 hours ago

2026/03/21

Priyan

Advisory for Severe Lightning Issued by the Natural Hazards Early Warning Centre Issued at 12.30 p.m. 21 March 2026, valid for the period until 11.00 p.m. 21 March 2026

Thundershowers accompanied with severe lightning are likely to occur at some places in the Galle, Matara, Kaluthara and Rathnapura districts after 1.00 p.m.

There may be temporary localized strong winds during thundershowers. General public is kindly requested to take adequate precautions to minimize damages caused by lightning activity.

ACTION REQUIRED:

The Department of Meteorology advises that people should:

 Seek shelter, preferably indoors and never under trees.

 Avoid open areas such as paddy fields, tea plantations and open water bodies during thunderstorms.

 Avoid using wired telephones and connected electric appliances during thunderstorms.

 Avoid using open vehicles, such as bicycles, tractors and boats etc.

 Beware of fallen trees and power lines.

 For emergency assistance contact the local disaster management authorities.

Latest News

Iranian strikes on bases used by US caused $800m in damage, new analysis shows

Published

20 hours ago

2026/03/21

Priyan

Damage to radar sites at Al Sader and Al Ruwais (UAE) [BBC]

Iranian strikes on military bases used by the US in the Middle East caused about $800m (£600m) in damage in the first two weeks of the war, a new analysis shows.

Much of the damage was caused in initial retaliatory strikes by Iran in the week after the US and Israel launched the war, according to a report by the Center for Strategic & International Studies (CSIS) and an analysis by the BBC.

The full extent of the damage caused by Iranian strikes on US assets in the region is not clear.

But the $800m in estimated damages to US military infrastructure – a figure that’s higher than has been previously reported – offers a picture of the steep costs to the US as the conflict drags on.

“The damage to US bases in the region has been underreported,” said Mark Cancian, a CSIS senior adviser and co-author of the think tank study. “Although that appears to be extensive, the full amount won’t be known until more information is available.”

In response to a request for comment, the US Department of Defense referred the BBC to US Central Command, which is leading the war. Officials there declined to comment.

Iran’s retaliatory strikes targeted US air-defence and satellite-communication systems, among other assets, in Jordan, the United Arab Emirates, and other countries across the Middle East.

A significant portion of damage was caused by a strike on a US radar for a Thaad missile defence system at an air base in Jordan.

The AN/TPY-2 radar system costs approximately $485m according to a CSIS review of defence department budget documents. The air-defence systems are used for the long-range interception of ballistic missiles.

Strikes by Iran caused an additional $310m in estimated damages to buildings, facilities and other infrastructure on US bases and military bases used by American forces in the region.

Iran also has struck at least three air bases more than once, according to an analysis of satellite imagery by BBC Verify. The repeat strikes underscore Iran’s efforts to target specific US assets. Russia has reportedly shared intelligence with Tehran on American military forces in the region.

Satellite imagery shows the three air bases – Ali Al-Salim base in Kuwait, Al-Udeid in Qatar and Prince Sultan in Saudi Arabia – with fresh damage appearing during different phases of the conflict.

The US has also lost 13 military service members since President Donald Trump joined Israel in launching the attacks on Iran on 28 February.

The US-based Human Rights Activists News Agency (Hrana) estimates the overall death toll has reached nearly 3,200, including 1,400 civilians.

Trump has said the US is on track to achieve his goals of destroying Iran’s nuclear program, degrading its conventional military power, and ending the regime’s support for proxy groups in the region.

“We’re doing extremely well in Iran,” Trump said at a White House event on Friday.

But the war has rattled the global economy with the near-closure of the Strait of Hormuz, and uncertainty over the duration of the conflict and whether Trump will deploy ground troops.

Source: Planet Labs PBC, 2026 Satellite imagery of a US naval base in Bahrain

Analysis of satellite imagery has been hampered by restrictions imposed by major US-based providers on the release of the imagery.

But it is possible to discern certain patterns in Iran’s retaliatory action against US military interests in the region.

Radar and satellite systems have been a focus from the start, when Iranian strikes hit a US naval base in Bahrain. They function as the eyes and ears of modern military operations.

Satellite imagery most notably showed the destruction of two radomes – protective enclosures for such sensitive equipment. It is highly probable the systems themselves were damaged, although it is not possible to gauge the extent.

Radar sites were hit at Camp Arifjan, a US military facility in Kuwait, and Saudi Arabia’s Prince Sultan Air Base, where US aircraft are located. Imagery of the latter shows smoke rising from a radar component for a Thaad air-defence system.

More extensive damage to Thaad systems is evident at US bases in the UAE and Jordan. It’s unclear what the cost of that damage was. The degradation of these systems reportedly led the US to redeploy Thaad components from South Korea to the Middle East.

The damage from Iran’s retaliatory strikes account for a fraction of the overall costs to the US for the war.

Defense Department officials reportedly briefed members of Congress that the first six days of the war cost $11.3bn. The first 12 days cost 16.5bn, according to CSIS.

The Pentagon is asking for another $200bn in funding for the war. Defence Secretary Pete Hegseth said on Thursday that the figure “could move.”

“It takes money to kill bad guys,” Hegseth said.

[BBC]