India and China are development partners, not rivals, Prime Minister Narendra Modi and Chinese President Xi Jinping agreed on Sunday, as they discussed ways to improve trade ties amid global tariff uncertainty.

Modi is in China for the first time in seven years to attend a two-day meeting of the Shanghai Cooperation Organisation regional security bloc, along with Russian President Vladimir Putin and leaders from Iran, Pakistan and four Central Asian states in a show of Global South solidarity.

Analysts say Xi and Modi are seeking to align against pressure from the West, days after US President Donald Trump imposed a punitive total of 50% tariff on Indian goods, partly in response to New Delhi’s purchase of Russian oil.

Trump’s moves hurt decades of carefully cultivated US ties with New Delhi, which Washington had hoped would act as a regional counterweight to Beijing.

Modi told Xi his country was committed to improving ties with China and discussed reducing India’s burgeoning bilateral trade deficit of nearly $99.2 billion, while emphasising the need to maintain peace and stability at their disputed border after a clash in 2020 triggered a five-year military standoff.

“We are committed to progressing our relations based on mutual respect, trust and sensitivities,” Modi said during the meeting on the sidelines of the summit, according to a video posted on his official X account.

He said an atmosphere of “peace and stability” has been created on their disputed Himalayan border and that cooperation between the two nations was linked to the interests of 2.8 billion people of the world’s two most populous countries.

The nuclear-armed Asian neighbours share a 3,800 km (2,400 miles) border that is poorly demarcated and has been disputed since the 1950s.

Xi said that China and India are each other’s development opportunities rather than threats, Chinese state news agency Xinhua reported.

“We must … not let the border issue define the overall China-India relationship,” Xinhua reported Xi as saying.

China-India ties could be “stable and far-reaching” if both sides focus on viewing each other as partners instead of rivals, Xi added.

Ties between the nations were ruptured by the 2020 clash, in which 20 Indian and four Chinese soldiers died in hand-to-hand combat, following which the Himalayan border was heavily militarised by both sides.

Indian Foreign Secretary Vikram Misri told reporters later in the day in that the border situation had evolved over the course of last year, following a patrolling agreement in October. “The situation at the border is moving towards normalisation,” he said.

To a question on the US tariffs, he said that Modi and Xi discussed the international “economic situation” and the challenges it created.

“They tried to … see how to leverage that for building greater understanding between themselves and how to … take forward the economic and commercial relationship between India and China,” he said.

The leaders also discussed expanding common ground on bilateral, regional, and global issues, and challenges like terrorism and fair trade in multilateral platforms, a statement from the Indian foreign ministry said.