China is already the world’s second largest economy. India will soon become the third largest.Prefer HTon Google The biggest highlight of the 18th BRICS Summit underway in New Delhi is the thaw in relations between China and India. China’s President Xi Jinping’s visit is his first to India since 2019. Prime Minister Narendra Modi visited China in 2025 for the Shanghai Cooperation Organisation meeting. These interactions follow a deterioration in relations between the two countries after a border dispute erupted in 2020.Chinese President Xi Jinping will visit India for the first time in nearly seven years to attend the 18th BRICS Summit in New Delhi on September 12-13, China’s foreign ministry said on Thursday (In picture: PM Modi with Xi Jinping) (Reuters)What promise or potential does this diplomatic thaw and possible détente hold? China is already the world’s second largest economy. India will soon become the third largest. To be sure, the two have a large gap between them. Here is what a non-zero-sum-game Sino-Indian relationship could do for the Global South as a whole.Sino-Indian economic relations are marked by an asymmetry between trade and investmentIndia imported goods worth $131 billion from China in 2025-26, 17% of its total imports that year. The country ranked second, UAE, had a share of just 8.2%. China’s importance in trade is much larger than its importance in investments in India. In 2025-26 Chinese FDI in India amounted to just about $6 million, not even one percent of total FDI in India. To be sure, some of the FDI friction resulted from Indian policies such as PN3, which prohibited Chinese FDI in India. These restrictions were recently removed and it remains to be seen whether the bilateral between Narendra Modi and Xi Jinping sees announcements of Chinese investments in India. Clearly, India stands to gain from expanding its economic engagement with China, especially in sectors such as manufacturing.A sustained revival in investment will require improvements in non-economic aspects of the Sino-Indian relationshipTo be sure, Sino-Indian relations cannot be evaluated on the basis of just economics. The two countries fought a war in the 1960s, continue to have a border dispute and India has had a genuine grudge about China shielding Pakistan in international forums despite the latter’s role in promoting terror in India. China and India are not alone in having such a trust deficit.