By Simone McCarthy, Nectar Gan, Rhea Mogul, CNN

Tianjin, China (CNN) — Chinese leader Xi Jinping told India’s Narendra Modi the “right choice” is for their countries to be friends as the two met in China for first time in seven years – a new milestone in a nascent rapprochement between the world’s most populous nations accelerated by shared frictions with the United States.

Xi and Modi’s highly-anticipated meeting Sunday, on the sidelines of a regional summit in the eastern port city of Tianjin, comes as both nations face stiff US tariffs under President Donald Trump’s global trade war, as well as Western scrutiny over their relationships with Russia as the war in Ukraine grinds on.

“The world today is swept by once-in-a-century transformations,” Xi told Modi in opening remarks, as both leaders sat face-to-face flanked by their officials. “The international situation is both fluid and chaotic,” he added.

“It is the right choice for both sides to be friends who have good neighborly and amicable ties, partners who enable each other’s success, and to have the dragon and the elephant dance together,” Xi said, referring to traditional symbols of the two nations.

“As long as they adhere to the overall direction of being partners rather than rivals … China-India relations can maintain stability and move forward over the long run,” he said.

Modi said India was “committed” to taking their countries’ relations forward “on the basis of mutual trust and respect,” and referenced their bettering of ties, including an easing of tensions along their disputed Himalayan border – where the two fought a deadly skirmish in 2020.

“The interests of 2.8 billion people in both our countries are tied to our cooperation,” he added.

The positive signals are sure to be closely watched in Washington, where tensions with New Delhi threaten to derail what had been years of efforts from US diplomats to deepen ties with the country as a key counterweight to a rising and increasingly assertive China – a set of circumstances that makes the latest meeting all the more important and timely to Xi.

Trump earlier this month levied significant economic penalties on India, initially placing its imports into the US under 25% tariffs and then slapping an additional 25% duties on the country as punishment for importing Russian oil and gas, which Washington sees as helping to fund Putin’s war in Ukraine. Both China and India are major purchasers of Russian oil, though China has yet to be targeted with such measures.

Modi said he spoke with Ukrainian leader Volodymyr Zelensky Saturday and “exchanged views on the ongoing conflict.” India has previously said it does not take sides in the war.

In his daily address on Sunday, Zelensky said that “everyone in the world has said that the fighting must be ceased,” including Turkey, Azerbaijan and Kazakhstan, who he noted were in China for the summit. “Almost everyone else in the world is also in favor of ending the war,” he continued.

India’s oil purchases could be a point of discussion on Monday, when Modi is expected to hold bilateral talks with Putin, part of his wider diplomacy as he joins a two-day summit of the Beijing-and Moscow-backed regional security grouping known as the Shanghai Cooperation Organization (SCO).

In addition to China, Russia, and India, the group includes Iran, Pakistan, Belarus, Kyrgyzstan, Tajikistan, and Uzbekistan, as well as partner and observer countries. Chinese officials ahead of the event said leaders from more than 20 countries from across Asia and Middle East would join the summit.

Xi hosted attending leaders for a welcome banquet on Sunday evening, where he appeared to put his warm and relaxed rapport with Putin on show. Footage released by Russia state news agency RIA showed the two leaders gesturing animatedly and smiling as they chatted at the event, showing a different side of the typically restrained Chinese leader.

The pair then walked shoulder to shoulder together after posing for a photo alongside other gathered leaders, with Xi gesturing for Putin to walk with him, footage released by the Kremlin showed.

The SCO is the two leaders’ first opportunity to meet in person since Putin’s summit with Trump in Alaska earlier this month – part of the US president’s push to end the war in Ukraine. Xi and Putin “discussed the latest contacts” between the US and Russia during a “detailed conversation,” Russian state media reported Sunday, citing Kremlin aide Yury Ushakov.

Putin’s war looms over the SCO gathering and the flurry of diplomacy around it, with the Russian president, who landed in Tianjin earlier Sunday, joining the gathering as Western leaders ramp up pressure on him– and his partners – to end the now more than three-and-half-year invasion.

A warming relationship?

Beijing is widely seen as eager for the newfound tensions between Trump and Modi to reduce what have been burgeoning security ties between the US and India. Chinese officials have watched with unease the elevation of the Quad security dialogue between India, the US and its allies Australia and Japan, widely seen as a bid to counter China.

In his remarks to Modi on Sunday, Xi sought to stress commonalities – framing the two countries as at “critical stages of development and rejuvenation,” and calling for them to “focus on development as their greatest common denominator, supporting and advancing each other,” according to a readout from China’s Foreign Ministry.

He also referenced their shared stated aim to make the international order more “multipolar” – a term used by countries, including those within the SCO, to call for international power to be more broadly shared – as opposed to dominated by the US and its allies, as they see it.

There has been a gradual normalization of ties between India and China after Modi and Xi met on the sidelines of the BRICS summit in Russia last October, which came as the two sides reached an agreement on military disengagement along their disputed border.

In recent months, the countries agreed to restart direct flights cancelled since the Covid-19 pandemic. Beijing also recently agreed to reopen two pilgrimage sites in western Tibet to Indians for the first time in five years, and both started re-issuing tourist visas for each other’s citizens.

Earlier this month, following a visit from China’s top diplomat Wang Yi to New Delhi, the two announced “ten points of consensus” on the issue to further reduce tensions.

Xi and Modi on Sunday also discussed what’s “happening on the international plain and the challenges it creates,” India Foreign Secretary Vikram Misri told reporters on the SCO sidelines, when asked about whether Trump’s tariffs were raised.

“They tried to, in a sense, see how to leverage that for building greater understanding between themselves, and how to … take forward the economic and commercial relationship between India and China in the midst of these evolving challenges,” Misri said.

Observers say, however, that even as the two leaders seek stability in their relationship, both in terms of trade and security, it will be hard for Xi and Modi to overcome a longstanding lack of personal trust.

Underlying tensions between India and China spiked in 2020 following a deadly conflict along their disputed Himalayan border, in which 20 Indian and four Chinese soldiers were killed in hand-to-hand combat.

The two nations maintain a heavy military presence along their 2,100-mile (3,379-kilometer) de facto border, known as the Line of Actual Control (LAC) – a boundary that remains undefined and has been a persistent source of friction since their bloody 1962 war.

But both leaders on Sunday appeared keen to signal the welcome of a warmer chapter.

An Indian readout released following the meeting said they reaffirmed that “their differences should not turn into disputes” and their “stable relationship and cooperation” was necessary for the “growth and development of the two countries, as well as for a multipolar world.”

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This story has been updated with developments. CNN’s Anna Chernova and Yong Xiong contributed reporting.