India's Diplomatic Dilemma: Navigating Tensions with the US and China

India's Strategic Shift Amidst US-China Tensions

Over the last twenty years, India has aimed to strengthen its alliance with the United States, positioning itself as a counterbalance to China's influence in the region. However, this strategy has encountered significant challenges due to the strained personal relationship between Prime Minister Modi and President Trump.

The inability of New Delhi to finalize a trade agreement with the assertive Trump administration has led to hefty tariffs of up to 50%, including a punitive 25% duty on Russian oil imports. This situation threatens to adversely affect India's economy, especially since the US is its largest export market, valued at $86.5 billion. Trump's derogatory comments about India's economy and allegations that New Delhi is funding Russia's military efforts in Ukraine have further strained relations. Recent reports suggest that Trump has even canceled his planned visit to India later this year, indicating a deepening rift.

In light of this diplomatic cold shoulder from the US, India is compelled to recalibrate its foreign policy, leading to renewed engagement with China. The increasing pressure from the US and its allies has pushed India to seek a diplomatic thaw with Beijing, despite five years of tense relations that began with the Doklam standoff and escalated following the deadly Galwan clash in June 2020, where 20 Indian soldiers lost their lives.

Prime Minister Modi, during his recent visit to China after a seven-year hiatus, met with President Xi Jinping on August 31 at the Shanghai Cooperation Organisation (SCO) Summit in Tianjin. The two leaders committed to finding a 'fair, reasonable, and mutually acceptable' resolution to the ongoing border disputes and expressed intentions to enhance bilateral trade and investment.

Prior to Modi's visit, Chinese Foreign Minister Wang Yi visited India on August 18-19, and Indian officials, including External Affairs Minister S. Jaishankar and National Security Advisor Ajit Doval, made discreet trips to Beijing. These discussions focused on reinstating travel and trade links, revising border protocols, and preparing for Modi's Tianjin visit.

China appears to be taking advantage of the rift between India and the US, as evidenced by its recent leniency towards India amid deteriorating relations with Washington. It is crucial to recognize that China has never been, nor will it ever be, a true ally of India.

With a significant trade imbalance favoring China, it is likely that India will become a dumping ground for inexpensive Chinese goods. Strengthening trade ties with China could pose even greater challenges for India in enhancing its domestic production capabilities.

In contrast, India enjoyed a trade surplus of over $40 billion with the US, indicating that America owes India a substantial amount. This is a key issue that Trump aims to rectify. Conversely, India faces a staggering trade deficit of nearly $100 billion with China, which could worsen with increased trade, further undermining India's position as a significant global economic player.

Despite government claims of robust GDP growth and assertions that India has become the world's fourth-largest economy, these statements may soon be challenged by the current realities.

Moreover, India's attempts to reconcile with China may be perceived domestically as an effort to legitimize Beijing's territorial aggressions in Ladakh and the Northeast. The Opposition Congress party has criticized the government's approach to normalizing relations with China despite unresolved border issues, labeling it as 'spinelessness.'

Recently, India's foreign policy has resembled a pendulum swinging between two extremes, all under the guise of 'strategic autonomy.' While New Delhi aspires to align with the democratic world led by the US, it simultaneously seeks closer ties with Russia for energy and defense.

The 2022 Russian invasion of Ukraine presented India with an opportunity to clarify its stance, but by remaining neutral, New Delhi has exposed its policy ambiguities. Modi's recent discussions with Ukrainian President Zelenskyy hold little weight in this context.

Currently, India finds itself at a crossroads, facing an aggressive China on one side and a frustrated America on the other, led by a President who is personally displeased with Modi. The path forward is clear: India must choose between continuing to drift among major powers or establishing a foreign policy rooted in internal strength.