The global geopolitical stage is heating up as trade tensions, energy politics, and strategic alliances reshape the balance of power. India now finds itself at the center of this storm, caught between the United States, China, and Russia.
Recently, former US President Donald Trump imposed a 50% secondary tariff on Indian exports as a punishment for India’s continued purchase and resale of Russian oil products. This move, targeted only at India despite other countries like China and Turkey also importing Russian oil, has raised eyebrows. Many experts believe this step risks undermining decades of progress in the US-India strategic partnership.
Xi, Modi, Putin: A New Axis Emerging?
Over the weekend, Chinese President Xi Jinping hosted the Shanghai Cooperation Organization (SCO) summit alongside Russian President Vladimir Putin and Indian Prime Minister Narendra Modi. The three leaders posed together, symbolizing closer ties. Xi even declared it was “time for the dragon and elephant to dance together,” signaling warmer Indo-China relations.
For years, the US has invested in building India as a counterweight to China—through defense, nuclear cooperation, and technology partnerships like iCET and INDUS-X. But Trump’s tariff shock may be pushing New Delhi towards Beijing and Moscow, at least temporarily.
Why Only India? The China Exception
A big question is: why was India singled out for tariffs, while China, the largest buyer of Russian oil, was spared?
- Dr. Srividya Jandhyala, Associate Professor of Geopolitics at ESSEC Business School, explains:
- Geopolitics is deeply tied to economics.
- Corporate nationality plays a huge role in trade risks.
- Till recently, Indian companies had an edge over Chinese firms because they weren’t Chinese. Now, the tables have turned.
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Will Tariffs Hurt India?
India’s economy relies far less on exports compared to many Southeast Asian nations. Exports form only a small percentage of India’s GDP, unlike Vietnam or Thailand, where exports make up almost 80%.
- This means the tariff impact on India won’t be as devastating as some predict.
- However, industries like textiles and pharmaceuticals—which depend heavily on the US market—could face significant setbacks.
Another challenge: once Indian firms shift supply chains and build new partnerships outside the US, reversing course may be difficult, even if tariffs are lifted in the future.
Long-Term Geopolitical Game
India has always played a careful balancing act in geopolitics. During the Cold War, it led the Non-Aligned Movement, refusing to choose sides between the US and the Soviet Union. Today, that non-alignment legacy is resurfacing.
- While Modi’s handshake moment with Xi and Putin looks symbolic, deep mistrust remains:
- Past border clashes in Galwan Valley.
- The 1962 India-China war memories.
- India’s ban on Chinese apps like TikTok, and restrictions on Huawei & ZTE.
So, a full-fledged India-China alliance is unlikely. Instead, India is exploring geopolitical polyamory—keeping ties open with multiple powers without committing fully to any single camp.
What This Means for Business
- Global companies are now facing:
- Market access risks from tariffs and sanctions.
- Supply chain disruptions due to wars (Ukraine, Gaza) and trade controls.
- Shifting partnerships, where choosing the wrong market may lead to long-term disadvantages.
As Dr. Jandhyala puts it: once companies invest in a new market or supplier, they rarely go back—unless forced by a major crisis.
India’s current tilt towards China and Russia may not be permanent, but Trump’s tariff policy has introduced serious friction in US-India ties. With elections and leadership changes on the horizon, global businesses and policymakers will be closely watching whether New Delhi rebalances towards Washington—or deepens its engagement with Beijing and Moscow.
For now, India’s message is clear: it will continue to chart its own course in a fragmented, multipolar world.