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Opinion Thaw with China is welcome, but India should remain cautious

Abandoning the strategy of engaging with technologically advanced democracies in favour of uncertain alliances with authoritarian regimes would be imprudent

Managing an increasingly assertive China remains India’s long-term challenge

September 2, 2025 12:21 PM IST First published on: Sep 2, 2025 at 12:21 PM IST

Written by Abhishek Roy Choudhury and Atharv Joshi

As images from Tianjin’s Shanghai Cooperation Organisation’s (SCO) summit dominated the weekend’s global headlines, China’s Xi Jinping framed Sino-Indian ties as the “right choice” of good-neighbourly partnership, while Prime Minister Narendra Modi affirmed India’s “commitment” to move relations forward on “mutual trust and respect”. But this is not another photo-op event in international affairs. Since assuming office, US President Donald Trump and his transactional and transient policies have altered the global power landscape. His seven months in power feel much longer. The abrupt increases in tariffs on goods imported into the US, the world’s largest consumerist economy, have been a catalyst for a shift in alliances and friendships. Interestingly, from a tariff point of view, traditional allies such as South Korea, Japan, and the European Union have received tough treatment on tariffs, but competitors like China and Russia have received softer treatment. The single stroke of “reciprocal tariffs” has provided a favourable environment for the formation of various likely and unlikely alliances in the world order.

The increased cooperation between China, South Korea and Japan or the recent declaration from the Franco-German Ministerial Council, is evidence of that. The thawing relations between India and China must be seen against this background. For India, the US is one of the biggest export markets, and the recently imposed 50 per cent tariff on India will certainly make many sectors of the export industry more competitive.

On the other hand, the US has targeted China in a more sustained and calculated manner through tariffs, export controls on sensitive technologies such as semiconductors, and asking its trade partners to keep Chinese products out of their own markets. In the face of high tariffs on Indian-origin goods, the ostensible cooperation between India and China sends an appropriate signal to the United States. After all, both Asian countries represent a significant part of the global population as well as economic power. Both neighbours are now on talking terms. However, there are significant questions that arise for New Delhi. India’s newfound cooperative mood with China might signal a message to the US, but what does it mean for India-China relations? Could it prompt the US to reconsider its current approach toward India? If greater India-China cooperation creates leverage, do both nations benefit equally? New Delhi’s policymakers are undoubtedly evaluating their options carefully. On one side lies the complex history with China, marked by the 1962 war and ongoing border disputes, while on the other is the US’s cultural, financial, and geopolitical investment in India as a counterbalance to China since the Clinton administration in 1993.

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The Trump administration has abandoned this relationship for an erratic, unilateral approach, unravelling years of engagement for “short-term” trade deals and domestic political gains. This shift constitutes a significant act of geopolitical self-sabotage for the US, given India’s vital role as a long-term counterweight to China. Yet, this is India’s new reality. To achieve a truly self-reliant “Atmanirbhar Bharat,” New Delhi must strategically pivot to build its own influence and leverage, independent of trade pressures and geopolitical dynamics. In the long term, India needs to focus on becoming a global manufacturing hub, prioritising ease of doing business, and developing a robust domestic ecosystem for semiconductors, critical minerals, and other reliable resources.

Despite immediate pressures from the US, India should approach any major shift toward China or Russia with caution. As the world’s largest democracy, this principle is central to India’s identity. New Delhi’s recent foreign policy has been grounded in a clear understanding of the country’s developmental needs. India’s needs for more foreign investment and technology transfers through capital investment need to be met by the traditionally strong countries. Above all, managing an increasingly assertive China remains India’s long-term challenge. These fundamental realities remain unchanged, regardless of Trump’s whimsical diplomatic actions. In today’s multipolar world, no single superpower dominates; instead, there is only the opportunity to be “the most influential power.” The US’s actions increasingly suggest that this position is vacant and open for competition. For New Delhi to achieve its ambition of becoming a self-reliant “Vishwaguru,” it must act strategically. PM Modi’s recent visit to Japan to enhance cooperation and the forthcoming Free Trade Agreement with the European Union are positive steps. However, aligning too closely with one nation to signal strength to another carries unavoidable risks.

Looking ahead, the landscape for alliances and rivalries will remain complex and ambiguous. Like other US allies and partners in Europe and Asia, India must navigate a world where Washington’s approach is transactional and coercive. Even so, abandoning India’s strategy of engaging with technologically advanced democracies in favour of uncertain alliances with authoritarian regimes would be imprudent. Even if communication with Washington falters, Prime Minister Modi can still build strong connections with leaders in Europe and elsewhere who are open to collaboration.

Abhishek Roy Choudhury is German Chancellor Fellow with the Alexander von Humboldt Foundation in Berlin, and Atharv Joshi is Trade Compliance Specialist at On Running