Amidst escalating tariff tensions with the United States, Prime Minister Narendra Modi has emphasized the critical need for India and China to collaborate in order to stabilize the global economic order. Modi's call for cooperation comes at a time when both Asian giants are facing economic pressures from Washington's trade policies.

Speaking in Japan ahead of his visit to China for the Shanghai Cooperation Organisation (SCO) summit, Modi highlighted the importance of stable and predictable relations between India and China for regional and global peace and stability. He noted that such collaboration is crucial for a multipolar Asia and a multipolar world. Modi is scheduled to meet with Chinese President Xi Jinping to discuss shared interests and address regional challenges. This will be Modi's first visit to China in seven years.

The Prime Minister's remarks come in the wake of the U.S. imposing a 50% tariff on Indian exports, comprising 25% import duties and an additional 25% levy on India's oil trade with Russia. Similarly, China has been facing increased tariffs on its goods by the U.S. These protectionist measures have triggered volatility in the world economy, making cooperation between major economies like India and China even more vital.

Analysts suggest that the timing of Modi's visit to China is opportune, as it comes when relations between India and the U.S. have soured. Michael Kugelman, a South Asia analyst, noted that "Indian trust in the US is shattered" and that Washington may have underestimated the fallout of the tariff hike. Some analysts believe that China may see the situation as an opportunity to stabilize ties with India amidst its own trade tensions with the U.S.

Even prior to the recent tariff hikes, India had been gradually seeking closer ties with China for investment and technology and in the hope of boosting trade. Relations had been strained following a border clash in 2020, but a thaw began when Modi and Xi met in person at a BRICS summit. Now, the "US-India crisis has given Modi good cause to accelerate efforts to ease tensions," according to Kugelman.

In his interview with the Japanese daily Yomiuri Shimbun, Modi stated that India is ready to advance bilateral relations with China from a strategic and long-term perspective, based on mutual respect, mutual interest, and mutual sensitivity. He also emphasized the need to enhance strategic communication to address developmental challenges.

At the same time, even as Modi seeks stronger ties with Beijing, India has also been reaffirming its commitment to a free and open Indo-Pacific, along with Japan. This indicates a multi-faceted approach where India aims to balance its relationships with different global powers while safeguarding its own interests.

The economic impact of the US tariffs on India is expected to be considerable, as the U.S. is India's top export destination, accounting for $86.5 billion annually. Sectors like textiles, jewelry and other labor-intensive industries are likely to be the most affected. In response, India has already begun exploring alternative markets to diversify its trade and mitigate the impact of the tariffs.

Overall, PM Modi's message underscores the importance of India and China working together to navigate the current global economic uncertainties and foster stability in the region and beyond. His visit to China and meeting with President Xi Jinping are expected to focus on strengthening bilateral ties, promoting trade and investment, and addressing shared challenges in a rapidly changing world.