DC Edit | India Must Find Balance Amid Global Trade Churn

The balancing act in these times of a great churning in global trade thanks to Trumpian tariffs, is a delicate enough task. As confidence in the US leading the global economy wanes, it is China that may be looking somewhat different in the eyes of some nations. As the threat of tariff barriers being raised by the US looms, interest in strategic matters may be taking a back seat for now, at least in Asia where no wars are being fought now.

India, which is still busy sorting out its trade deal with the US as the extended deadline of August 1 nears, has had even greater difficulties in staying on the balancing beam of global geopolitics as Prime Minister Narendra Modi and the defence and foreign ministers have had several engagements in power blocs like BRICS and SCO that may be diametrically opposite of those mainly serving US interests.

With Nato now threatening tariffs against China, India and Brazil in the light of opposition building to trade with Russia that these countries have been freely resorting to, especially in buying cheaper Russian crude, the task of resetting trade ties is getting complex for everyone. It is interesting then that the foreign minister should have had a meeting with the Chinese President Xi Jinping who also had an extended meeting with the Russian foreign minister Sergei Lavrov.

Pakistan’s mischief in sponsoring cross-border terror had further fouled the timing of global diplomacy even as trade readjustment is in progress. With Operation Sindoor’s countermeasures against Pakistan came further complications as China moved from being a confrontational neighbour to enemy status in India’s eyes because it actively participated in Pakistan’s military defence.

How could the meeting with Chinese President Xi not be clouded by the background of most recent events post-ceasefire? And yet the foreign minister was able to highlight the positives, of which the resumption of the Kailash Mansarovar Yatra stands out as it fulfils India’s sentiments about a spiritual journey. And yet this may only serve China’s approach to India that prioritises trade and business normality over border dispute and de-escalation that India would like to see addressed first.

There may have been a thaw in ties thanks to the border situation cooling somewhat since late 2024 in the wake of the Modi-Xi meeting in Russia, but there is no escaping the fact that it is China, an economic superpower above India’s standing, which seems to have derived the most comfort from its tweaking of Pakistan as an ally to keep India in check. And China may be getting smug about trade as it is still going on uninterrupted with a near $100 billion surplus for China.

If India can leave aside for a moment its priority of having to speak out against state-sponsored terror of the Pakistan kind while gathering international support for this, it might be able to negotiate with China on irritants like the withholding of key minerals for EV batteries and tunnel boring machines for the Bullet train project, etc., that suggests China holds the whip hand. The only positive feature of ties is that India keeps talking to China at the highest levels, including with President Xi, unlike with Pakistan, which is declared an enemy state not worth talking to.