These are tense times of sleepless nights for New Delhi. A US President is visiting China after nine years. For India, that’s equal parts heartburn, hope, and a pit-in-the-stomach feeling because there is so much to lose and so much to gain. And all depends on what direction the upcoming summit-level talks between US President Donald Trump and his Chinese counterpart Xi Jinping in Beijing on May 13-15 takes.
Besides the geopolitics of it in a very turbulent global landscape, why it matters to India is because China and the US—the world’s two largest economies—are the biggest trading partners of India.
The fact that Trump is not averse to sudden policy reversals is not making India breathe easy either. While he vociferously trumped up the QUAD grouping in his first term as US President and then watered it down in his second stands out as a prime example of his unpredictability.
The best case scenario for India—short of the talks being a damp squib—would be if Washington and Beijing strike a delicate balance and just about ‘tolerate’ and ‘balance’ each other in trade, tariffs, supply chain issues, energy security, rare earths and the conflicts in Iran and Taiwan.
Because then, India would be able to play out its ‘strategic autonomy’ plank to the outmost in the backdrop of its warm ties with the US and the warming ties with China and leverage the existing mechanisms of strong military ties with the US where QUAD becomes relevant once again while playing out the full potential of the BRICS and SCO multilateral mechanisms with China even as it preserves its own national interest. This way, both the powers remain strongly engaged and invested in India.
That China is backing India’s chairmanship as the BRICS this year, and India backing China as the chair for 2027, is in itself a positive.
The worst-case scenario for India would be if the Beijing talks result in a game-changing geostrategic relationship between the two biggest powers or the ‘G-2’ moment, because that would reduce India’s strategic importance.
Among the major economies, India, a US ally, has already been imposed the highest tariff of 50 per cent by the US, while it is 47 per cent in the case of China, a US rival and therefore better trade terms than India. An easing of tariffs on China would also mean investors preferring China rather than shifting to newer geographies like India.
India’s energy security would also be highly disadvantaged if China manages to secure exemptions from the US. And if a ‘Board of Trade’ to manage US-China trade ties gets set up, India runs the risk of being bypassed in the process, thereby eroding its importance.
But the silver lining in the cloud is Trump’s assurance of a trade deal with India very soon. This is where India will have to play its best cards and transform a challenge into an opportunity.
Lastly, to hedge against a negative fallout from the upcoming talks, India will have to bet more on multilateral blocs like the European Union and ASEAN.