SCO Signals a Possible Reset in India-China Ties Ahead of BRICS

It was not a dramatic “pull-aside” or a diplomatic huddle, as had happened in the Chinese city of Tianjin exactly a year ago. But the optics were unmistakable: Indian Prime Minister Narendra Modi warmly shaking hands simultaneously with Chinese President Xi Jinping and Russian President Vladimir Putin. The three leaders briefly appeared together at the Shanghai Cooperation Organisation summit in Bishkek, Kyrgyzstan, an image that highlighted their overlapping interests in a changing global order. There were also two significant bilateral meetings before the photo-op.

Despite the ongoing US bombing of Iran and Iranian retaliation against American bases in Jordan, India held its first bilateral meeting with Iranian President Masoud Pezeshkian since the conflict began on the sidelines of the summit. Modi described Pezeshkian as a “peace-loving person” who could advance the cause of peace, while the Iranian president called for stronger bilateral cooperation and measures to mitigate the impact of sanctions. Modi too spoke of greater cooperation and trade, without directly addressing the implications of US sanctions.

Equally interesting was Putin’s bilateral meeting with Pezeshkian. The Russian leader said Moscow was providing “goods and commodities” to Iran, while praising the Iranian people for their “courage and resilience”. The meeting underscored Russia’s support for Iran, although the wider claims about the extent of military, technological and intelligence assistance remain difficult to establish. The conflict has nevertheless brought Russia and Iran closer, while US policy in the region has contributed to a broader reassessment of alliances and economic partnerships.

In that sense, the Putin-Modi-Xi photo-op and the bilateral meeting with the Iranian president can be read together as part of the diplomatic build-up to the BRICS summit in New Delhi ten days later. Some of these leaders are expected to assemble again, this time without Pakistan, to discuss the changing global economic and geopolitical environment. India appears to be more willing than before to engage with a broader platform that includes Russia and China, while retaining its own strategic autonomy.

The question is how far India is willing to go with Russia and China in building a new post-colonial road to prosperity. Russia remains India’s all-weather friend and is likely to remain so even as New Delhi seeks to maintain its relationship with the US. China, meanwhile, has continued to push for greater use of national currencies in its bid towards de-dollarisation.

So, will the BRICS summit be a turning point? Will India announce a rupee-yuan trade agreement? Was the SCO meeting a precursor to a larger announcement in Delhi? The discussions at Bishkek have fuelled speculation about greater use of central bank digital currencies, digital payments and intra-BRICS settlements in national currencies. Russia and China have long supported such initiatives. The question is whether India is ready to take the plunge.

China Signals

The SCO summit and the photo-op were not the only indications of a possible thaw between India and China. There was also news that former chief of the PLA Western Theatre Command Gen Zhai Zongqi had been sentenced to prison on corruption charges. Zhai had held senior military positions during a period that included tensions between India and China, including the 2017 Doklam episode and the 2020 Galwan Valley clash.

He was not the current head of the theatre command facing India and was a member of the Standing Committee of the Chinese People’s Political Consultative Conference. His imprisonment is therefore not, by itself, evidence of a policy shift towards India. However, coming alongside other diplomatic and military contacts, the development could be viewed as one of the several signals worth watching as both sides seek to stabilise relations and address border tensions.

Changes among Chinese military officials may also reflect broader internal considerations within the political establishment. It would be premature, however, to conclude that these developments were specifically intended to facilitate an India-China rapprochement. Similarly, India’s engagement with the QUAD and its wider Indo-Pacific partnerships does not necessarily preclude efforts to maintain dialogue with Beijing.

The broader challenge for India is to balance these relationships without becoming overly dependent on any one strategic grouping. That balancing act will become increasingly important as competition between the US and China affects trade, technology, energy and security.

In a week packed with geopolitical developments, the US, meanwhile, announced measures relating to Venezuela’s oil sector. President Donald Trump described the arrangement as “the biggest oil deal in history,” while Venezuela’s interim leadership was being reshaped. This blatant, neo-colonial takeover of Venezuela’s oil wealth seems to have weighed heavily on the leaders at the SCO summit. If Venezuela’s oil can overnight “double American oil reserves” then that logic applies to more or less all nations.

The developments have raised wider questions about access to energy resources, sanctions and the use of economic and political pressure in international relations.

For India and China, the world’s biggest energy buyers, the implications are significant. They have an interest in diversified sources of energy and in markets where supply can be accessed on predictable and commercially viable terms. Greater cooperation on payments, energy and trade could therefore become an important part of the BRICS conversation.

The world is consequently looking to BRICS for practical proposals on trade, payments, finance and energy security. The New Delhi summit comes with considerable expectations, but its significance will ultimately depend less on symbolism and more on whether the participating countries can agree on measures that are workable, commercially useful and acceptable to their diverse interests.