India Rekindles Its China Ties as Trump’s Tariffs Bite

On 30 August, Indian Prime Minister Narendra Modi paid his first visit to China in seven years, meeting President Xi Jinping on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Tianjin in what seemed to signal a thaw in relations between the two Asian giants. Though often chilly, those relations had become particularly frosty since 2020, when a clash along a stretch of the disputed Himalayan border killed two dozen Chinese and Indian soldiers. In this context, the meeting between Modi and Xi appeared particularly cordial, with both heads of state expressing the wish that their countries become partners rather than rivals. 

Though it had been planned for months, Modi’s trip took on added significance amid sudden, unexpected strain on India’s ties with the United States. Just days before he went to Tianjin, the Trump administration slapped 50 per cent tariffs on Indian goods – the stiffest it has imposed on any country save Brazil, another U.S. ally in the middle of its own political crisis with the White House. Though New Delhi is ordinarily one of Washington’s closest partners in the Indo-Pacific, President Donald Trump has justified the sky-high tariffs on grounds of India’s continued purchases of Russian oil during the Kremlin’s grinding war in Ukraine. The fallout from the brief conflict between India and Pakistan in May also appears to have tarnished ties between Trump and Modi. 

Against this backdrop, footage of Modi beaming in casual conversations with not just Xi but also Russian President Vladimir Putin appeared to be a signal from New Delhi that it intends to stand up to Trump’s strong-arm tactics. Some commentators have gone much further, portraying the SCO summit – the largest since the organisation’s inception in 2001, with over twenty heads of state in attendance – as the foundation for an alternative world order in which those at the receiving end of U.S. bullying can coalesce to safeguard their interests. A gigantic military parade held by China days later on the occasion of the 80^th anniversary of the end of World War II, attended by Putin and North Korean leader Kim Jong-un but not by Modi, who had left beforehand, has buttressed perceptions that a new international bloc is in the making. 

While that scenario remains hypothetical, the scenes at the SCO summit of Modi, Putin and Xi huddling and laughing together have attracted worldwide attention and raised eyebrows in Western capitals. The leaders were likely playing up the bonhomie for the cameras, as a way of demonstrating their proclaimed commitment to a multipolar world – or at least a global order that is not dominated by the West. But Modi also intended these images for consumption back home, where his reputation as a respected statesman has taken a hit from Trump’s punishing tariffs.

Both Xi and Modi also took pains to stress that the sporadic outbreaks of hostility at their shared border should not be allowed to overshadow the bilateral relationship. It may be easier said than done: India and China fought a war over the frontier in 1962, and numerous flare-ups have occurred since. The two disagree even on the length of the border, known as the Line of Actual Control, which has yet to be demarcated; India says it is 3,488km, while China claims it is 2,000km. Speaking at his meeting with Modi, Xi reiterated the Chinese stance that the “two sides should … not allow the boundary question to define the overall China-India relations”, adding that “a cooperative pas de deux of the dragon and the elephant should be the right choice for the two countries”. Modi, for his part, spoke of “positive momentum” in India-China relations over the last year, highlighting the “importance of maintaining peace and tranquility in border areas”. These statements from both sides mark a clear departure from the deep freeze that has characterised their relations since the 2020 clash, and which underpins continuing large-scale military deployments at the border.

The Modi-Xi meeting marks the culmination of a cautious re-engagement initiated in 2024, predating the current tension with the U.S., and aimed at resetting the India-China relationship after five years when the two neighbours had almost no diplomatic interaction. The rapprochement started when Modi and Xi met briefly on the sidelines of the BRICS summit held in Kazan, Russia, in October 2024. This interaction – the first between the two leaders since 2019 – paved the way for several high-profile diplomatic visits in the following months, eventually leading to a fruitful trip to New Delhi by Chinese Foreign Minister Wang Yi in August, during which he attended the 24^th round of the Special Representatives Dialogue on the Boundary Question between India and China. 

Wang’s visit ended with the sides agreeing to set up mechanisms for an “early harvest” in boundary delimitation; withdraw additional forces deployed on both sides of the frontier since the 2020 clash; resume direct flights; reopen border trade; and facilitate commercial and investment flows. Indian and Chinese troops arrayed since 2020 in an eyeball-to-eyeball standoff have now disengaged from all points of friction along the Line of Actual Control. 

Unlike India’s Pakistan policy, which is a highly emotional subject for many Indians, New Delhi’s re-engagement with Beijing remains largely free of public scrutiny, allowing the Modi government more room to manoeuvre. Having secured a third term in 2024, Modi was able to pursue détente with China without appearing weak to his base. Economic reality was a powerful motivator: after the U.S., China is India’s second largest trading partner. In the fast-changing geopolitical landscape, New Delhi has opted for pragmatism in its foreign relations, a rethink the U.S. tariffs seem to have accelerated. By attending the SCO summit, Modi also raised the chances that Beijing will support India’s presidency of BRICS in 2026 – something that was hardly a foregone conclusion considering that Xi skipped the G20 summit when India was that organisation’s chair in 2023.

That said, India’s aspirations to become a superpower also imply heightened rivalry with China over the long term. In that regard, participating in China-led forums also helps New Delhi prevent Beijing from wielding unchallenged influence, especially in Asia. As the two nations compete in various domains, the likelihood that the border dispute will return to haunt the relationship remains as significant as ever. Despite disengaging from friction points, over 50,000 troops from each side remain mobilised in rear areas along the Line of Actual Control. It will take concrete reductions in forces and mutual understandings on how to manage the undemarcated border before trust can be fully established between the two countries. 

President Trump’s decision to impose 50 per cent tariffs on Indian goods – the highest for any country, except Brazil, whose leader is treated by Trump as an ideological foe – has sent shock waves through India. The initial rate of 25 per cent that came into effect in early August was not too surprising, given the rates applied to other countries, including U.S. allies. But Trump’s signing of an executive order doubling them to 50 per cent as of 28 August, purportedly due to India’s purchase of Russian oil (see below), hit the Indian government, businesses and the public like a thunderbolt. 

These enormous tariffs seem not just disproportionate but also counterproductive for Washington’s strategy in the Indo-Pacific. The U.S., like many other countries, has long harboured misgivings about India’s protectionist policies, which have entailed high tariffs in many sectors in order to boost domestic manufacturing. In general, however, Washington has swallowed its qualms in deference to larger goals. Since the Cold War’s end, and particularly over the last two decades, successive U.S. administrations have nurtured the partnership with India, which they saw not just as a gigantic market but also (and more importantly) as a counterweight to China in Asia. Referring to each other as “natural allies” as early as 1998, New Delhi and Washington signed a civil nuclear deal in 2005 (despite India not having ratified the Non-Proliferation Treaty) and became “closest partners” in 2013. In 2016, the U.S. designated India a “major defense partner”, on a par with its “closest allies and partners”, with which it has several intelligence sharing agreements. Following the India-China border clash in 2020, India started participating more actively in the Quadrilateral Dialogue, better known as the Quad, an informal grouping comprising the U.S., India, Japan and Australia, which China perceives as a tool of containment. While, officially, India’s foreign policy remained anchored in the notion of strategic autonomy, in practice Modi moved India closer to the U.S. camp, antagonising China in the process.

The harsh tariffs are all the more surprising given that Trump and Modi have seemed to enjoy a warm personal relationship, with each repeatedly referring to the other as a “friend”. During the U.S. president’s first term, Modi organised a massive “Namaste Trump” rally in his home state of Gujarat and Trump reciprocated by attending a huge “Howdy, Modi” gathering when the Indian prime minister journeyed to Texas. When Trump returned to power, Modi was among the first heads of state to pay him an official visit, at a time when many world leaders were desperately trying to secure such a meeting. Six months down the line, however, the comity between the two leaders has given way to rancour – even if both have carefully avoided naming the other in public statements.

Beyond the economic concerns the U.S. tariffs raise for the government – India shipped $87 billion in goods to the U.S. in 2024, around a fifth of its total exports – Indians across the board are outraged at the way the Trump administration is treating their prime minister. This sentiment is something Modi can hardly ignore, given the strongman image he has crafted for himself over his decade in power. Defiant, he has vowed not to give in to U.S. pressure and urged his compatriots to work toward making India a self-reliant manufacturing hub. Despite the Trump administration’s accusations that India is funding Russian aggression, including particularly provocative comments from Trump’s trade adviser Peter Navarro referring to the Ukraine conflict as “Modi’s war” and to New Delhi as a “laundromat for the Kremlin”, India has refused to halt its purchases of Russian oil.

That said, whatever the optics of the SCO summit, the notion that India is pivoting toward China to offset the deterioration of ties with the U.S. is simplistic. The India-China relationship has its own strategic logic, even if Trump’s actions may have provided additional impetus for Modi to use the SCO platform to make a point – both to Washington and to his domestic audience. India has also privately sought to mend fences with Washington, according to a U.S. official, offering more favourable trade terms and indicating a desire to halt the precipitous decline in relations. 

India-U.S. trade has grown in recent years, but it has always remained susceptible to disagreements over market access and domestic political pressures. Since coming back to office, Trump has repeatedly criticised India’s policies as overly protectionist, including during a press conference with Modi in Washington in February. His initial 25 per cent tariffs on Indian goods seemed easy to understand on those grounds. His decision to double the Indian tariff due to its purchase of Russian oil is, however, hard to explain. By that logic, his administration should have imposed higher tariffs on several other countries, starting with China, which is by far the biggest buyer of Russian crude. Yet it has not done so for now, and the Trump administration seems fairly confident that it can secure a trade deal with Beijing. 

True, India has not supported the efforts of the U.S. and allies to sanction and economically isolate Moscow for the all-out invasion of Ukraine. To the contrary, since the February 2022 invasion, the share of Russian oil in India’s imports has grown exponentially, from 0.2 per cent to over 40 per cent. While Western capitals objected at first, India has been unapologetic about its choice, and most foreign governments have decided to close their eyes in the name of geopolitics, as they perceive India to be an essential partner in countering China’s rise. In July, however, Trump started lambasting India for buying Russian oil and re-exporting some of it to third countries after refining it. New Delhi called these broadsides “unjustified and unreasonable”. 

The proximate causes driving the exorbitant tariffs may lie elsewhere. Chief among them is the four-day India-Pakistan conflict that erupted in May in the wake of the Pahalgam terror attack in Indian-administered Kashmir. The fighting between the two nuclear-armed states was intense, but it came to an end after the U.S. and others pushed both sides to stop. India has repeatedly denied that Trump secured the ceasefire that went into effect. It also took issue with the U.S. president’s claims that he had dangled the carrot of a trade deal to convince the sides to stand down. Furthermore, Trump’s comments seemed to treat India and Pakistan as equal parties in the conflict, an idea that is anathema to New Delhi, but maybe more importantly, undermined the Indian narrative that Modi had brought Islamabad to its knees through his display of resolve under fire. Opposition parties in India have also used Trump’s unconfirmed claims that he brokered peace by using trade concessions to cast aspersions on Modi.

Modi’s refusal to accept Trump’s claim that he “solved” the conflict and avoided a nuclear war seems to have provided the real trigger for the spike in tensions. That said, a U.S. official noted that a series of longstanding frictions and more recent slights have also contributed to the current rift. The Trump administration’s frustrations with India’s trade practices, latent anti-immigrant sentiment espoused by elements of the president’s base and complaints of haughty Indian diplomatic interactions with the U.S. all reportedly added to a climate of mistrust. Despite the slump in relations, the fact that Trump and Modi have avoided criticising each other directly offers an opportunity further down the line to use personal diplomacy to fix this setback. 

Much ink has been spilled discussing the images of Modi sharing a long car ride, walking hand in hand and apparently joking with Putin at the SCO summit. On India’s part at least, the optics were intentional: Modi sought to clearly convey that, whatever the U.S. or others might say or do, India will not backtrack from its time-tested relationship with Russia. “India and Russia have always stood shoulder to shoulder even in the most difficult situations”, the Indian prime minister said at a meeting he held with the Russian president on the summit sidelines. “Our close cooperation is important not only for the people of both countries, but also for global peace, stability and prosperity”. Back in 2022, Modi implicitly chided Putin for the Ukraine invasion by telling him that “today’s era is not an era of war”, but since then New Delhi has refrained from condemning Moscow, even it has called for a political solution to the war. “We welcome all the recent peace efforts”, Modi reiterated during his meeting with Putin in Tianjin. “A way must be found to end the conflict as soon as possible and establish lasting peace”.

The India-Russia partnership goes back decades. Despite being part of the Non-Aligned Movement during the Cold War, New Delhi maintained close ties with Moscow throughout and leaned more decisively toward the Soviet Union in the 1970s to counterbalance U.S. support for its rival Islamabad. In 1971, it signed the India-Soviet Treaty of Peace, Friendship and Cooperation with Moscow, which became its primary source of new weaponry. In recent years, New Delhi has worked to diversify its acquisitions in order to reduce its dependence on Russian arms and military equipment, but the two countries continue to have a close relationship that extends beyond the defence and energy sectors. Indian Foreign Minister S. Jaishankar, who has been the leading government advocate of India’s position on purchasing Russian oil, has described the links between India and Russia as “the only constant in world politics”. In 2010, Moscow and New Delhi elevated their relationship to a “special and privileged partnership”, a status that neither side has conferred on any other country. Modi’s behaviour in Tianjin is one sign that India is committed to that relationship despite geopolitical circumstances. Another is that Putin will be travelling to New Delhi in December for the 23rd annual India-Russia summit.

Unlike the relationship between India and Russia, India-China ties remain rife with potential sources of tension, particularly the longstanding border dispute. Trump’s tariff salvo proved the perfect occasion for both sides to reaffirm their avowed commitment to a multipolar world. But distrust runs deep, and India has its own ambitions, which makes it farfetched to imagine India accepting China as a champion of the so-called Global South, a title Beijing covets, or as the leader of an alternative to U.S. hegemony worldwide. But for now at least, New Delhi and Beijing seem to be returning to a phase of cooperation and amicable, if vigorous competition, leaving behind the outright animosity that has characterised the last five years.