There is an upward trend in India-China relations and Beijing has promised to address New Delhi's needs on rare earths, a top Indian official and a source said on Tuesday, as the neighbours rebuild ties that were damaged by a 2020 border clash.

India and China are aware of the “very high political, economic and military cost of frozen relations,” he says. “China felt it had pushed India too close to the U.S. while India realized that it was losing its vaunted strategic autonomy by getting too close to Washington and turning Beijing into an adversary.”

Indian Prime Minister Narendra Modi will meet with China’s top diplomat on Tuesday in a sign of easing tensions after a yearslong standoff between the nuclear-armed neighbors

Indian Foreign Minister Subrahmanyam Jaishankar and his Chinese counterpart Wang Yi on Monday discussed border peace, trade issues and bilateral exchanges, aiming to strengthen cooperation between the two countries.

Their relationship is defined by a bloody border dispute, a vast power imbalance and a fierce contest for influence across Asia. Yet, President Donald Trump’s latest trade war may be achieving the unthinkable: pushing India and China into a wary but tactical embrace.

Modi will attend the Shanghai Cooperation Organization summit opening on August 31 in Tianjin, his first visit to China since 2018, Ajit Doval said, in public comments at the start of a meeting with Beijing's Foreign Minister Wang Yi.

India and China are working to repair their strained relationship five years after a deadly clash in Galwan. The recent visit of Chinese Foreign Minister Wang Yi to New Delhi is being seen as a key step in this direction.

Prime Minister Narendra Modi had been moving to align India with the United States and freeze out China. Now, efforts to rebuild ties between the Asian giants are gaining momentum.

When asked about how China would mediate future India-Pakistan relations given their strained history and the current situation, Chinese Foreign Ministry spokesperson Mao Ning said on Tuesday that as a principle,

Chinese Foreign Minister Wang Yi arrived in India on Monday for a two-day visit. He assured EAM Jaishankar that China will address the three key concerns of India, including fertilisers, rare earth, and boring machines.

China is India’s largest trading partner in goods, with the south Asian country exporting more than $14bn in the 2024-25 financial year and importing a record $113bn of goods.