The recent meeting between US President Donald Trump and Chinese President Xi Jinping on the sidelines of the APEC Summit in Busan, South Korea, and Trump’s use of the term “G2” to frame the gathering, has raised profound questions for India. Strategic calm between the US and China may reduce global volatility, but it also demands sharper policymaking and diplomacy from us.
Indians realise that the sort of decisive economic clout China displayed at Busan is currently not available to India in its strategic dialogue with the US. Beijing can use its global supply-chain dominance and its massive market size as effective weapons. India, though a growing market, lacks a comparable, single point of pressure to wield with the US that can influence high-level negotiations so effectively. We have no rare earths to withhold, and we don’t buy 12 million tons of American soybeans either. We cannot dictate terms the way China did.
For India to achieve comparable diplomatic results, we must focus on developing our own unique points of asymmetric leverage — whether in technology, manufacturing scale, or critical minerals — to strengthen our hand, both vis-à-vis the US and, critically, in our complex relationship with China. India’s dependence on the US is greater than China’s, and that constitutes a key strategic disparity. Unfortunately, we have the same disparity with China too. What works in Beijing’s favour when negotiating with India, giving it an inherent advantage in bilateral economic and trade discussions, is that we too are dependent on imports from China, whereas there is nothing we sell them or purchase from them that makes as much of a difference to them (just as the US too has other sources to supply the garments, the gems, the shrimps or the phones we are anxious to sell them).
Trump’s apparent warming to China delivers a sharp strategic message to India. For years, New Delhi has operated on the foundational assumption that the US would always view it as a “useful instrument” to constrain or counterbalance a rising China. The unspoken pact of the Indo-Pacific strategy — where India’s geopolitical weight was seen as crucial to Washington’s China strategy — has taken a major hit. The transactional nature of the Trump-Xi deal highlights a clear hierarchy of U.S. interests: for the Trump administration, the relationship with Beijing, driven by the colossal trade deficit and the desire for high-profile deals, remains far more important than the one with New Delhi. This is evident in the differential treatment: While a partial trade truce was quickly struck with China, the US has continued to pressure India with tariffs, even as a bilateral deal with New Delhi is being negotiated. Indians have lost jobs as a result of US tariffs, while China is being hailed in Trump’s social-media posts.
The assumption that the US would always have India’s back is now obsolete. New Delhi must recognise that its strategic value to Washington is conditional and subject to the vagaries of US domestic politics and the immediate priority of managing the relationship with the peer competitor, China. This necessitates a profound and urgent recalibration of India’s foreign policy assumptions. Our strategic options must revolve around maximizing our strategic autonomy and building comprehensive national power.
India must accelerate its move towards a genuinely “multi-aligned” foreign policy, deepening strategic ties with other key global powers and regional groupings, in particular Europe, the UK, the Gulf states, Africa and ASEAN. The future of the Quad (with Japan, Australia, and the US) remains uncertain, with Trump yet to confirm attendance at the next summit scheduled to be hosted by India. Its utility must be viewed constructively, but alongside the value of enhanced engagement with Russia, Central Asian states and even China. New Delhi should leverage its growing geopolitical weight to extract maximum benefit from competing powers.
The temporary thaw in US-China relations paradoxically gives India a window for its own pragmatic diplomacy with Beijing. While the border issue remains the core constraint, New Delhi should pursue a strategy of “managed competition” with China. This means maintaining military preparedness on the border while keeping diplomatic and trade channels open to stabilise the relationship and prevent escalation. India must develop the resolve to negotiate from a position of strength, which requires domestic actions as well.
The single greatest vulnerability exposed by the US-China dynamic is India’s economic reliance on Chinese imports, particularly in critical sectors like pharmaceuticals and electronics. India must aggressively pursue the diversification of its supply chains and focus on economic self-reliance (atmanirbharta) in a strategic context. This includes attracting global manufacturers looking to de-risk from China, a strategic opportunity that a US-China detente could slow down. Simultaneously, investing heavily in indigenous critical and emerging technologies like AI, quantum computing, and semiconductors is paramount to achieving true strategic autonomy.
India needs policy coherence rooted in domestic realities. Imposing a reform package will not succeed if it clashes with entrenched political interests or social expectations. The challenge is to maintain openness and genuine ease of doing business while protecting workers, industries, and critical technologies. Our economic governance must adapt: trade rules, investment norms, and finance architecture have to make room for strategic instruments like industrial policy, government investments and digital sovereignty. We must use markets, but build institutions and deploy the state where markets falter.
For India, the “G2” summit serves as a timely and sharp awakening: The assumption of an unshakeable US commitment to India as a counterweight to China is a costly illusion. We find ourselves in a multipolar world where American tariffs destroy Indian jobs and Beijing’s response matters to businesses in Mumbai. India’s path forward is clear: Abandon the passive assumption of guaranteed US backing and embrace a proactive, multi-aligned strategy centred on building national economic and technological resilience. Only by maximising our own strength and strategic flexibility can India secure its interests amidst a dynamic and increasingly transactional great power landscape.
The writer is MP, Thiruvananthapuram, and Lok Sabha chairman, Parliamentary Standing Committee on External Affairs
