Prime Minister Narendra Modi’s participation in the 25th Shanghai Cooperation Organisation (SCO) Summit in Tianjin, China, marked his first visit to China in seven years.

• He and Russian President Vladimir Putin also held a significant bilateral meeting at the SCO Summit venue.
• The outcomes carried not only diplomatic significance but also strong economic and market implications for India.

Key takeaways from PM Modi’s SCO

• ‘No double standards’ on terrorism: Prime Minister Narendra Modi said that the Pahalgam terror attack was not only a blow to India, but it was an open challenge to every country that believes in humanity. 
  • He also asserted that the SCO must clearly and unanimously reject “double standards” on terrorism.
  • He acknowledged the significant role of SCO-RATS in this regard. 
  • Under India’s leadership, the Joint Information Operation was launched this year to counter al-Qaeda and its affiliates.
  • India also proposed enhanced coordination and joint measures against radicalisation.
• Sovereignty is non-negotiable: He emphasised the importance of respecting national sovereignty in global connectivity projects. 
  • “Connectivity that bypasses sovereignty loses both trust and meaning,” raising India’s concerns about regional unilateral infrastructure projects such as China’s Belt and Road Initiative (BRI).
• SCO’s Journey: The Prime Minister highlighted that over the past 24 years, the SCO has played a vital role in connecting the extended family across the Eurasian region. 
  • He underlined that India has always contributed in a constructive and positive manner as an active member of the organisation.
• Three pillars of SCO: India’s approach to the SCO is guided by three central pillars: S — Security, C — Connectivity, O — Opportunity.
  • Attention was brought to the:
    • Importance of security, peace and stability towards the growth of countries,
    • India’s connectivity endeavours for Afghanistan and Central Asia through the Chabahar Port and the International North-South Transport Corridor.
• Connectivity hub offer for SCO nations: Making a significant pitch for regional cooperation, PM Modi proposed the use of Iran’s Chabahar Port, a project India has helped develop, as a reliable and respectful alternative to other regional corridors, such as Pakistan’s Gwadar Port.
• Civilisational Dialogue Forum: The proposal for establishing a Civilisational Dialogue Forum under the SCO to showcase the cultural richness of member states.
  • It would serve as a platform to highlight ancient civilisations, diverse artistic traditions, literature, and heritage, thereby deepening mutual understanding and strengthening people-to-people ties across the region.
  • “Startups, innovation, youth empowerment, digital inclusion and shared Buddhist heritage were new areas which India incorporated.

Impact for Indian stock market due to recent Modi-Xi Meet

• Hedge Against US Tariff Pressures: The Modi–Xi meeting provides India with a strategic cushion against Donald Trump’s steep 50% tariff package on Indian exports.
  • Strengthening the Russia–India–China (RIC) axis signals an alternative to over-dependence on the US. 
  • If China opens its markets further, it could help reduce India’s trade deficit and offset the potential 15–25% losses caused by the US tariffs.
• Reduced Geopolitical Uncertainty: Improved dialogue between India and China reduces the uncertainty that has plagued bilateral ties due to border escalations and China’s support for Pakistan. 
  • Investors are likely to gain confidence knowing that the risks of political disruption are lowered. 
  • If the discussions lead to formal agreements, it could bring stability and boost the economies of both nations, which in turn benefits the stock market.
• Boost for EVs and Renewable Energy: China’s assurance of supplying fertilisers, rare earths, and machinery is especially critical for India’s electric vehicle (EV) and renewable energy sectors. 
  • Rare earth minerals are essential for EV manufacturing, and this assurance directly benefits companies like Tata Motors, Suzlon Energy, and Waaree Renewables. 
  • As a result, these stocks registered gains, reflecting improved investor sentiment in the green energy space.
• Multi-Sectoral Growth Opportunities: Closer cooperation between India and China opens growth avenues across multiple sectors. 
  • India can gain from China’s expertise in solar technology, electric mobility, and large-scale infrastructure execution, which will accelerate renewable adoption and reduce costs. 
  • Sectors like shipping and logistics could see tailwinds as this trilateral alliance (Russia–India–China) promotes Eurasian trade routes and reduces Western dominance over supply chains.
  • These developments add strategic depth to India’s long-term growth story.
• Long-Term Energy Security: India’s energy security receives a major boost through the growing share of Russian oil in its imports, rising from just 1.7% in FY20 to 35.1% in FY25. 
  • Settling more oil trade in rupees and yuan reduces India’s dollar dependence, thereby easing forex pressures and stabilising reserves. 
  • This shift strengthens India’s macroeconomic stability, which is viewed positively by the stock market.

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