India and China will resume direct flights after more than five years as two of the world’s biggest economies seek to rebuild political ties at a time of rising global trade uncertainties.

The Indian Ministry of External Affairs said in a statement on October 2 that air service with China can start by later this month “subject to commercial decision of the designated carriers from the two countries” and fulfillment of other operational criteria. 

The move follows bilateral discussions earlier this year geared toward the reestablishment of air travel. Bloomberg News reported in August citing people familiar with the matter that direct flights were expected to resume soon.

Passenger flights between India and China were suspended after the COVID-19 pandemic. The connection never resumed after diplomatic relations between the two countries hit a low point in 2020 following border clashes. Travelers between the two neighboring countries currently transit through hubs like Hong Kong or Singapore.

Diplomatic ties between the longstanding rivals are on an upswing at a time when U.S. tariffs have added to economic uncertainties in the world’s two most populous nations. In August, China and India agreed to facilitate bilateral trade and investments following talks between their foreign ministers in New Delhi.

India’s largest carrier, IndiGo, said it would resume its flights to China starting October 26 with daily service connecting the eastern Indian city of Kolkata to Guangzhou in southern China. The carrier said it also planned to fly between New Delhi and Guangzhou “shortly.”

IndiGo’s chief executive officer, Pieter Elbers, welcomed the thaw in aviation ties, saying it would help his airline’s global growth plans.

“With this very important step, we are looking at introducing more direct flights into China,” he said in a statement. 

IndiGo’s shares rose as much as 1.5% on October 3 during trading in Mumbai before giving up some of the gains.

India’s other large local carrier, Air India, is also working on a plan to launch flights to Shanghai from New Delhi on a Boeing 787 Dreamliner aircraft, according to people familiar with the discussions who spoke on the condition of anonymity. 

Rollout dates for Air India’s flights have not been finalized and could be sometime after the IndiGo launch, they added.

‘Big Respite’

Before the suspension, Air India and IndiGo, as well as Chinese airlines such as Air China, China Southern and China Eastern operated services between major cities of the two countries.

“Resumption of flights will lead to more people-to-people contact,” said Ajay Prakash, chief executive at Nomad Travels and former president of Travel Agents Federation of India. “It will also come as a big respite for medium and small sized companies that do business with China.”

This needs to be followed up with improved visa rules to ensure ease of travel and India should also look at attracting Chinese tourists, Prakash added. 

Earlier this year, India began allowing tourist visas for Chinese nationals after years of curbs. India and China had first agreed in January to resume direct flights and once more in June, but progress was slow.