AA Edit | Will China, Russia Shape India’s Tariff Response?
Prime Minister Narendra Modi will be in Tianjin for the Shanghai Cooperation Summit (SCO) that is to be hosted by the Chinese President Xi Jinping
Prime Minister Narendra Modi will be in Tianjin for the Shanghai Cooperation Summit (SCO) that is to be hosted by the Chinese President Xi Jinping. There is a strong likelihood that the Russian President Vladimir Putin will also be there on August 31-September 1. The meetings with the Chinese and Russian Presidents will be rich in optics, especially given the circumstances in which global trade has been turned topsy-turvy by Trumps’ tariffs that took effect against imports from 69 countries on Thursday at various rates, including the highest slab of 50 per cent-plus reserved for Brazil and India.
While Russia remains in focus because of its oil trade with two of its biggest customers in China and India (Europe, a big buyer of Russia’s LNG, being another), it is time for India to shed its old complex about China, negotiating with which was perceived as a sign of historical weakness. Having been driven into a corner by Trump’s tariff plus penalty, it is imperative for India to show that it has other pastures to look at, specifically China which remains the largest exporter of goods into India.
At a time when what was arguably the most important relationship for India in the new millennium has soured thanks to Trump’s jaundiced views and his tariff tantrum, India must go beyond the optics of a diplomatic bilateral meeting and facilitate ministerial-level dialogues to suss out the possibility to China buying more from India even as India diverts some of its US imports to China.
It would be in India’s interest to hold deeper trade and political conversations with China now that the border situation is somewhat satisfactory after the last meeting between Prime Minister Modi and President Xi that took place in Kazan, Russia. It cannot be easy to open the heart out to China so soon after it had played a role in helping the Pakistani armed forces in the drone, missile and fighter jet battles of May 2025. But to separate security issues and look at trade is an imperative now.
The opportunity is not just to show to the US that the friend it is spurning now has other options. Truth to tell, India may not have handled Trump too well in harping on the role that it says Trump did not play in ending hostilities with Pakistan in the wake of the Pahalgam attack by Pakistani terrorists and the consequent Operation Sindoor. It also did not butter him up by nominating him for the Nobel Peace Prize, nor invest in his family’s cryptocurrency business.
In standing up to the US, Mr Modi has declared that protecting the country’s 700 million agriculture and dairy farmers, fishermen and the people they employ is too crucial a national priority. This is incontestable even if credible arguments can be made against the high tariffs India employs while protecting most of its domestic market and hence is unable to move into a more advanced phase of openness after the economic reforms of the 1990s.
Russian oil may be the trump card for the US President to finesse India, but the demand to open the dairy and agriculture sectors may have become the trigger that the US may have used as it looks at options to tax imports and increase exports. Self-sufficiency is a noble concept but the road to it is long. To find a balanced response to the good, the bad and the ugly is the immediate challenge and the meetings with the Chinese and Russian Presidents may give it a better shape.