Prime Minister Modi’s visit to the Shanghai Cooperation Organisation (SCO) meeting in China today focused primarily on strengthening economic relations with member states, especially China and Russia, amid global shifts caused by new US tariffs on Indian exports and ongoing geopolitical tensions.

 

Trade and Investment Partnerships

Modi’s meetings, especially with Chinese President Xi Jinping and Russian President Vladimir Putin, emphasized advancing mutual trade and investments. India and China agreed to resume direct flights halted since 2020 and pledged to enhance tourism and business exchanges. The talks also included China removing export limitations on rare earths, fertilizers, and tunnel boring machinery, opening new channels for Indian manufacturing and infrastructure.

 

Regional Economic Integration

At the summit, leaders discussed proposals for the creation of an SCO Development Bank and expanding the interbank association, aiming to accelerate payment infrastructure and settlements in national currencies. These steps may help bypass Western financial dominance and facilitate smoother trade workflows among SCO nations—which collectively account for about 30% of the world’s GDP.

 

Impact of US Tariffs and Geopolitical Shifts

The timing of this engagement is crucial, following punitive 50% US tariffs on Indian exports linked to New Delhi’s Russian oil imports. Modi’s diplomatic pivot toward China and Russia indicates India’s intent to counterbalance US pressure by building stronger economic alliances within the SCO—signifying a shift toward the Global South and multipolar world order.

 

Economic Outcomes and Future Strategies

Leaders are expected to adopt over 20 documents including the SCO Development Strategy 2035 and the Tianjin Declaration, setting the path for deeper economic cooperation. The outcomes are anticipated to bring opportunities in the fields of infrastructure, technology transfer, and cross-border trading for India in the coming years. India’s recent announcement of nationwide E20 fuel rollout and its 7.8% GDP growth in Q1 FY26 strengthen its profile as a resilient and attractive economic partner within SCO.

 

Overall, Modi’s visit is set to inject momentum into regional economic integration, support market access for Indian businesses, and accelerate strategic investments with major Asian powers