New Delhi, March 24, 2025 – India is reportedly exploring a relaxation of trade and investment restrictions imposed on China following the deadly 2020 Galwan Valley clash, as bilateral border tensions show signs of easing and the United States ramps up pressure on New Delhi to reduce tariffs. Sources familiar with the discussions suggest that these potential policy shifts could mark a significant thaw in India-China economic relations, while also addressing India’s ballooning trade deficit with its northern neighbor.
According to a report by The Indian Express, the Indian government is engaged in interdepartmental talks to ease several measures enacted in 2020, when border skirmishes in the Galwan Valley strained diplomatic ties. Among the proposals under consideration are relaxed visa policies for Chinese personnel, the removal of certain tariff and non-tariff barriers on Chinese imports, and the reinstatement of some previously banned Chinese mobile applications. Additional measures include resuming direct flights between the two nations and issuing visas to Chinese scholars, signaling a broader intent to normalize exchanges.
The Narendra Modi administration is also reportedly reassessing its stringent 2020 investment policy, which mandates government approval for FDI from countries sharing a land border with India—a measure widely seen as targeting China. Sources indicate that controlled Chinese investments could be permitted to help offset India’s growing trade imbalance with China, which has become a pressing economic concern.