India outlines a new 3-point doctrine for its war on terrorism; US-China trade truce eases fears of a potential recession; “large Indian trade” delegation to visit the US; Trump seals $10 trillion economic and defense deals during his Gulf tour and announces to lift US sanctions on Syria – here’s a roundup of key global news from this week. ‘New Normal’: India vows retaliation against terror attacks Having successfully responded to the Pahalgam terror attack, Prime Minister Narendra Modi said that the recent actions would now become the “new normal”, and that any act of terror on Indian soil or against Indian citizens will be responded to and retaliated against similarly. Addressing the nation for the first time since the operation began, PM Modi on Monday (May 12, 2025) laid down a new three-point doctrine for India’s war on terrorism: — India will respond on its terms, — It will not tolerate nuclear blackmail, and — It won't distinguish between terrorists, their leaders and the government that sponsors them. India also rubbished the claim that its targeted strikes at Pakistan’s Sargodha airbase also hit the nearby Kirana Hills, which reportedly house some nuclear installations. The claim had drawn international attention with US President Donald Trump saying that the US averted a “nuclear conflict”, “a bad nuclear war”, that could have “killed millions of people”. This week, the global nuclear watchdog, the International Atomic Energy Agency (IAEA), also confirmed to The Indian Express that there has been “no radiation leak” from any nuclear facility in Pakistan after the escalated military engagement with India. Notably, both India and Pakistan have signed an agreement to refrain from attacking nuclear facilities. Meanwhile, the two countries decided to ease tensions further and reduce troops at the borders and forward areas. This week, the two sides exchanged a prisoner each, allowing a BSF constable, who had been in Pakistani custody since April 23, to return home. In exchange, Muhammadullah of the Pakistan Rangers, who had also crossed into India and had been detained by the BSF, was handed over to Pakistani officials. Another significant development around India-Pakistan tensions this week is Islamabad’s willingness to discuss India’s concerns about the Indus Waters Treaty (IWT), which India suspended following the Pahalgam terror attack. While India and Pakistan agreed on a ceasefire on May 10, the IWT remained in abeyance. Pakistan’s Water Resources Secretary, Syed Ali Murtaza, is understood to have recently responded to India’s formal intimation of the Union Cabinet’s decision to keep the treaty in abeyance, and offered to, on behalf of his government, discuss the specific terms India objects to. Murtaza’s offer to discuss India’s objections is a critical development because Pakistan had remained unresponsive to two prior notices — in January 2023 and again in September 2024 — requesting a “review and modification” of the IWT signed in 1960. In the meantime, ripple effects of the India-Pakistan conflict are also being felt beyond their borders. Turkey and Azerbaijan, which are otherwise popular tourist destinations, have found themselves caught in the crossfire due to their vocal support for Pakistan during recent military engagements. Many Indians have cancelled their travel plans to these countries. Data shows a 60 per cent decline in bookings to these two countries and a 250 per cent surge in cancellations over the past week. Indian traders have also been willing to boycott Türkish apples and other items such as dry fruits (pistachios). Also under fire is Çelebi Aviation, a Türkish company handling ground services including cargo, at Indian airports such as New Delhi, Mumbai, and Chennai. US-China trade truce brings relief to global markets In contrast, the global economy this week breathed a sigh of relief as the US and China agreed to de-escalate the trade war. The two countries on Monday (May 12, 2025) agreed for a 90-day truce in their ongoing trade war, bringing some relief to global markets and supply chains and easing fears of a potential recession. Following the announcement, stock markets surged while the US dollar and oil price went up. After two days of high-level negotiations in Geneva, Switzerland, US and Chinese officials announced that the two sides agreed to drop their respective tariffs by 115 percentage points. This means the US has brought down its 145 per cent tariff rate on Chinese goods to 30 per cent, and China has lowered its tariffs on US goods from 125 per cent to 10 per cent. US Trade Representative Jamieson Greer and Treasury Secretary Scott Bessent announced the tariff reductions and said the two sides had set up consultations to continue discussing their trade issues. China’s Commerce Ministry called the agreement an important step for the resolution of the two countries’ differences and said it lays the foundation for further cooperation. The joint statement issued by the two countries said China also agreed to suspend or remove other non-tariff barriers, including its increased export controls on rare earths – some of them are critical to the American defence industry – and restrictions or investigations against multiple US companies. Notably, signs of economic slowdown appear to have persuaded the world’s two biggest economies to de-escalate their trade war. For China, the costs of the stand-off were prohibitive due to its economy’s over-reliance on exports. The situation was even more serious in the US, where the economy contracted by 0.3 per cent in the first quarter of 2025. With new tariffs driving up costs, economists feared that the country would slip into recession. Although the pause has effectively contained the trade war, consumers in the US continue to face a tariff of 30 per cent on imports from China (20% connected to the fentanyl issue and which predated the “Liberation Day” tariffs on April 2), and consumers in China a tariff of 10 per cent for imports from the US until the two countries negotiate an actual deal. Ironically, while the US-China truce brought some relief to global markets, it may have unintended consequences for countries like India. It could potentially slow India’s momentum by taking pressure off companies such as Apple to diversify away from China, and affect New Delhi’s ambitions of playing a bigger role in global supply chains. Of late, Apple has been actively expanding its manufacturing in India, attracted by subsidies offered under India’s production-linked incentive (PLI) scheme. Taking a direct swipe at Apple’s growing operations in India, US President Trump revealed that he had told Apple CEO Tim Cook to rethink expanding manufacturing in India unless it was strictly to serve the Indian market. In the meanwhile, India on Monday (May 12, 2025) informed the World Trade Organisation (WTO) of its proposed retaliatory tariffs against the US in response to its 25 per cent duties on steel and aluminium. Compounding the frictions further is Trump’s new executive order on the prices of drugs that seeks to force companies to align US drug costs with the cheapest ones abroad. The move could effectively see pharmaceutical giants intensify pressure on lower-cost markets like India to raise their prices as the low-cost markets would determine prices in the lucrative US market. Trump said he would introduce a “most favoured nation” (MFN) policy whereby the US pays “the same price as the nation that pays the lowest price anywhere in the World”. India’s generic drug industry, which is not only a source of low-cost medicines in India but also in the US and UK, has long been a bone of contention for large pharma companies in developed countries. These companies argue that weak intellectual property rights in India leave them uncompetitive. Trump’s executive order follows the US placing the Indian patent regime on its “Priority Watch List” for intellectual property rights (IPR), which has a significant bearing on drug manufacturing. All of this happened as a “large Indian trade” delegation led by Union Commerce Minister Piyush Goyal is set to visit the US for talks next week to potentially finalise the contours of an interim trade agreement between the two countries. Trump’s Gulf tour yields deals worth $10 trillion In the meantime, Trump actively sought to reinforce the US’s economic and strategic influence in the Gulf. He toured through three Gulf countries this week – Saudi Arabia, Qatar and the UAE – and sealed a series of tech, business and military deals worth up to $10 trillion. Trump reached Saudi Arabia on Tuesday in the first leg of his three-nation visit, where he received a royal welcome from Saudi Crown Prince Mohammed bin Salman. The two sides signed multiple deals totalling $600 billion, including nearly $142 billion in defence sales agreement — described as the largest in history. AI and energy infrastructure as well as medical research are among other areas covered in the deal. Evidently, economic alongside security partnership was the main focus of Trump’s Gulf visit. In Qatar – the second stop of his trip – Trump signed an agreement worth more than $243.5 billion and outlined plans to increase the investment to $1.2 trillion. Doha also committed $10 billion towards upgrading a US military facility and agreed to purchase $42 billion in weapons from the US, media reports cited Trump as saying on Thursday during a speech at a US military air base in Qatar. Qatar Airways agreed to buy 210 Boeing jets worth $96 billion, representing the largest deal yet facilitated by Trump since he arrived in West Asia, The New York Times reported. In addition, the US finalised several defence-related agreements with Qatar - including a $1 billion deal for Qatar to acquire drone defence technology from Raytheon RTX, and a $2 billion agreement for it to purchase remotely piloted aircraft from General Atomics. Before heading to the UAE on Thursday, Trump visited a US military installation – Al-Udeid Air Base, which was a major staging ground during the US wars in Iraq and Afghanistan – and spoke to US troops, The Associated Press reported. Trump concluded his tour in the UAE, where he announced more than $200 billion in commercial deals. The two countries announced they would work together to construct the largest artificial intelligence data centre outside of the US in Abu Dhabi, with the Emirati firm G42 building the facility that will cover 10 square miles and have a 5-gigawatt capacity, the Department of Commerce said. US shifts Syria policy, edges towards nuclear deal with Iran Interestingly, during his visit to Saudi Arabia, Trump announced that US sanctions on Syria will be lifted. He also met with Syrian President Ahmed al-Sharaa in the presence of Saudi Crown Prince Mohammed bin Salman while Turkish President Recep Tayyip Erdogan joined them via telephone. “I will be ordering the cessation of sanctions against Syria in order to give them a chance at greatness”, Trump said. It is seen as a much-needed move for the fledgling, transitional government in Syria headed by al-Sharaa who came to power in December last year after the overthrow of longtime president Bashar al-Assad. US sanctions on Syria date back to 1979, when the country was under the grip of President Hafez al-Assad – father of Bashar al-Assad. In the intervening years, further sanctions were imposed on the state and individuals linked to both the regime and the opposition, including current President al-Sharaa due to his past ties with al-Qaeda. In the meantime, the US also reportedly appreciated the agreement between the Syrian government and the Kurdish-led Syrian Democratic Forces (SDF) that would facilitate the SDF’s integration into state institutions. Turkey has repeatedly fought against the SDF, that largely controlled Syria’s northeast, over the past decade. The SDF’s integration with the Syrian state came alongside the Kurdistan Workers’ Party, or PKK agreeing to disarm and disband. Abdullah Ocalan’s PKK has been in conflict with the Turkish state for over four decades. In other comments during his Gulf visit, Donald Trump also said that Iran and the US have “sort of” agreed to terms on a nuclear deal. He described talks between American envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi as “very serious negotiations” for long-term peace and said they were continuing to progress. “Iran has sort of agreed to the terms: They’re not going to make, I call it, in a friendly way, nuclear dust,” Trump said at the business event. “We’re not going to be making any nuclear dust in Iran.” Iran and the US held the fourth round of talks in Muscat, Oman, on Sunday (May 11, 2025), which Iran described as “difficult but useful”. After about three hours of negotiations on Sunday, Iran’s Foreign Ministry spokesperson Esmaeil Baghaei described the talks as “difficult but useful talks to better understand each other’s positions and to find reasonable and realistic ways to address the differences,” Al Jazeera reported. “Next round will be coordinated and announced by Oman,” he said in a post on X. All the while, Israel’s war in Gaza raged on as Prime Minister Benjamin Netanyahu continued with his so-called promised escalation to destroy Hamas. Alongside the escalations, Israel imposed blockade on the Gaza Strip in March after it broke the ceasefire signed in January this year. The UN said it is ready to deliver enough aid to feed all Palestinians in Gaza for at least four months as soon as Israel allows it. The Red Crescent also renewed its call for Israel to reopen crossings with Gaza for the entry of humanitarian aid, warning that it has been “left to starve and ache”. Meanwhile, Israel’s war on Gaza is dominating the talks at the 34th Arab League Summit kicked off today (May 17, 2025) in Baghdad, Al Jazeera reported. Israel’s war on Gaza has killed at least 53,119 Palestinians and wounded 119,919, according to Gaza’s Ministry of Health. Amid escalation in Gaza, diplomatic activity intensified elsewhere to contain another conflict. Russia, Ukraine hold direct talks Russia and Ukraine held the first direct talks in three years in Turkey on Friday (May 16, 2025) where the two sides agreed to exchange 1,000 prisoners of war each, according to the heads of both delegations. Both sides also discussed a ceasefire and a meeting between their heads of state, according to the chief Ukrainian delegate, Defence Minister Rustem Umerov. Russian presidential aide Vladimir Medinsky, who headed Moscow’s delegation, said both sides agreed to provide each other with detailed ceasefire proposals and Ukraine requested the heads of state meeting, which Russia took under consideration, The Associated Press reported. Notably, the talks came after the US and Europe stepped up pressure on Russia to agree to a 30-day ceasefire starting Monday (12 May 2025). Although Ukraine accepted the ceasefire proposal, Russia didn’t comply. The Ukrainian air force said on Monday that Russia launched more than 100 Shahed and decoy drones at Ukraine in nighttime attacks, according to The Associated Press. Wrapping up his visit to West Asia, Trump said a meeting between himself and Russian President Vladimir Putin would happen “as soon as we can set it up”. “I think it’s time for us to just do it,” Trump told reporters in the UAE, Al Jazeera reported. Following the meeting between the two sides in Turkey, Kremlin spokesman Dmitry Peskov also appeared to indicate that momentum is building for a possible Trump-Putin meeting. He told reporters that top-level talks were “certainly needed”, but added that preparing a summit would take time. Post Read Questions Evaluate India’s new 3-point doctrine for its war on terrorism in the aftermath of the Pahalgam terror attack. In what ways does the US-China 90-day truce impact global supply chains and address the threat of a global recession? What does the truce signal about the domestic economic pressures faced by both the US and China? The US-China trade truce could have unintended consequences for countries like India. Comment. US President Donald Trump emphasised economic and security partnerships during his recent visit to the Gulf. What does this reflect about Trump's foreign policy approach? How might the US’s defense deals with Qatar and Saudi Arabia impact the regional balance of power? What could be the implications of the Kurdish-led Syrian Democratic Forces (SDF) integrating into Syrian state institutions for regional stability? Send your feedback and ideas to ashiya.parveen@indianexpress.com.
