Editor’s Note
Global geopolitics underwent a churn when the Ukraine conflict started, and the trend has continued, with Trump sending economic shockwaves across nations. The Indian stance is framed by its own national interests, retaining strategic autonomy as it navigates through the crosscurrents. In the bargain, India has enhanced its influence and made some strategic gains, too.
Three years into the Russia-Ukraine conflict, India had to navigate through a tricky diplomatic tightrope against a vitriolic Western alliance and a traditional friend to assert its strategic autonomy and maintain a consultative, collaborative and cooperative mechanism with either side in the face of severe criticism. While maintaining that sovereignty and territorial integrity are non-negotiable in a free world, it stopped short of criticising Russia for its aggression and abstained from multiple UN resolutions emphasising that it was on the side of peace through dialogue and diplomacy. Castigated for importing oil from Russia that sustained its war effort, Ukraine went to the extent of whining that the Russian oil that India imports is mixed with Ukrainian blood.
European duplicity was highlighted by Dr Jaishankar, pointing out that what India imports in a month is less than what Europe imports in one afternoon and that Europe must get over the idea that Europe’s problems are the world’s problems, but the world’s problems are not Europe’s. Maintaining a nuanced diplomatic stance, India continued to maintain its contact with both sides, with the PM highlighting to Putin in Sep 2022 that ‘Today’s era is not for war’, emphasising the importance of democracy, diplomacy and dialogue. His statements resonated through Western capitals with greater acceptance of India’s balanced approach, at one time being preferred as a suitable interlocutor for conflict resolution. While PM Modi was criticised for embracing Putin during his visit to Russia in July 2024, coinciding with the NATO summit in Washington, the very same Russia is now being placated for a peace agreement when at its strongest bargaining position with hitherto unthinkable concessions.
The world is at an inflexion point triggered by the change of guard at the White House and the Trump phenomenon of unprecedented policy reversals. Jettisoning decades of historical, military, and economic convergence, the US aligned with Russia, rejecting UN resolution ES-11/7 condemning Russia for the invasion sponsored by Europe in February 2025. The US accused Ukraine of not only triggering the conflict but also its dictatorial President with less than a 4% approval rating, perpetuating the unwinnable war.
It hit the pause button for military aid and intelligence sharing soon after the Oval Office disaster, before restoration after Ukraine retracted its demand on security guarantee for a ceasefire and mineral deal on American terms. Conscious of the irreplaceability of the US with European military and economic support, Zelensky sought to assuage the hurt to American pride through his letter to the US President. There is a tectonic recasting of the trans-Atlantic alliance with the US threatening to pull out from NATO (whose support it seeks to annex Greenland), along with WHO (and maybe IMF and World Bank). Emboldened by US vacillation, Russian juggernaut in eastern Ukraine has intensified missile and drone attacks with the recent recapture of Kursk and the US proposed ceasefire considerably watered down. Ukraine has lost its only bargaining chip, if at all, to regain lost territory.
The unprecedented turn of events has only vindicated India’s stand on maintaining strategic autonomy in an increasingly unstable and rapidly fluctuating geo-strategic environment with no permanent friends or enemies, only permanent national interests. US isolationism portends to retreat from the world, demanding reciprocal benefits for economic and military support. It extends to allies even beyond Europe, including Japan and Taiwan.
The Tariff Conundrum
India enjoys a roughly $45 billion trade surplus over the US, being a distant ninth amongst countries that enjoy a trade surplus with the US. However, Trump seems to have become obsessed with Indian tariffs, calling it the tariff king. US goods face a weighted average tariff of 7.7% in India, while Indian exports (18%) face a tariff of 2.8%, leading to a 4.9% differential. India charges 37.7% on US farm products to protect its domestic farmers, while the US imposes 5.3% on Indian farm exports, which are well within WTO regulations. Prior to the PM’s visit to the US, India implemented conciliatory tariff reductions on selected products to assuage US concerns. Notwithstanding the proposed mutually beneficial Bilateral Trade Agreement between the two by September 2025, the reciprocal tariffs will likely come into effect from 2nd April 25. Economic experts, though, predict the turbulence to be manageable.
Driven by US tariff threats, multiple countries and conglomerates have turned to India to diversify their trade relations. In an unprecedented move, European President Ursula Von Der Leyen led 22 EU commissioners to India in February 2025 to expedite the free trade agreement, which has languished since 2007, calling India one of the most trusted friends. There is greater urgency in completing the India- UK free trade agreement. Close on the heels of the EU delegation, a high-level Belgian economic delegation visited India from 01 to 8 March 25. New Zealand has decided to relaunch FTA negotiations with India after a gap of 10 years. With Mark Carney’s election as the Liberal Leader in Canada and his intention to repair relations with India, Canada is desperate to find alternatives to trade with the US. Since February 22, India has expanded its Economic Partnership Agreement/ trade agreements with UAE, Australia, Norway, and Switzerland and has made rupee settlements with UAE, Australia, Russia, and Maldives.
The Indian Commerce Secretary, in his deposition before a parliamentary board, denied making any commitment to the US on tariff reduction while at the same time indicating conditional opening up of the Indian telecom sector to Starlink through Jio and Airtel hitherto constrained due to security considerations. Further, trade deals will have to be mutually beneficial if it is F35 with its huge cost differential and doubts on technology transfer and local production, oil or gas. Given the cost differential, Tesla is unlikely to dent the Tata and Mahindra domination in the electric car segment, which is just 2.4 % of the Indian automobile industry. Lately, Russia has offered engines for Tejas Mk1A aircraft in the backdrop of overly delayed GE F404 engines from the US.
Just about every consequential power is courting India economically, diplomatically and militarily. All these indicate the rapidly growing economic and business alternatives to stressed tariff relations with the US. It is a double whammy of opportunity, after the supply chain transition away from China, for India to exploit investments, trade and market access over the ensuing decade. Despite risks, India cannot be browbeaten (to drink more American whiskey) and has displayed pragmatism and maturity in its response mechanism, unlike an open confrontation like Canada (over electricity) and the EU.
Geo Strategic Situation
Over the last few years, India has positioned itself in a propitious geo strategic disposition through subtle diplomatic heft.
- The October 24 meeting between Xi Jinping and PM Modi has induced a thaw along the LAC, complimented by India’s resilient and robust response to PLA transgressions. Though Beijing has been untrustworthy, its economic and domestic regression, internal fissures in PLA, and unexpected consequences of long-term deployment along the LAC are likely to restrain it from misadventures in the immediate term. Recent conciliatory statements from PM Modi’s interaction with Lex Fridman and Beijing’s reaction tend to cool tempers.
- The US – Russia reproachment has the flip side of attenuating Russian diplomatic and economic dependence on China (The Russia-China-Iran axis on nuclear issue at best being a negotiating leverage) to India’s advantage. The no limit partnership can be viewed as contextual as Russia hates to play second fiddle even to Beijing.
- Strategic patience and pragmatism have restored India’s traditional relations with Maldives where President Muizzu won the elections on an India out campaign. Economic bailing out of Sri Lanka and negotiations with IMF has led to the erstwhile India critic Dissanayake assuring that it’s soil will never be used for anti-India activities. Predatory and unreliable BRI strategy of China is facing economic and political headwinds in most of the world.
- The hands-off approach indicated by US towards Bangladesh after supposedly triggering the regime change, offers India the latitude to deal with the country with a carrot and a stick approach. Its political, economic and ideological recalibration is unsustainable due to its sociocultural and linguistic distinctiveness.
- India’s approach towards the Arab-Israeli imbroglio has been consistent with its long-established conviction. While the terror component of Oct 7 attack inside Israel cannot be condoned, the two-state solution supported by India and indeed most of the World is synonymous with UN resolution 242 of 1967, reaffirmed in Dec 2024. The US proposal of a Riviera of the Middle East in Gaza displacing 2.3 Mn Palestinians is an unworkable proposal.
- In the emerging circumstances, India’s strident stand on reformation of global institutions including the UN is gathering greater traction.
Trump administration’s first few days in office seem to resonate with what Lenin had said: “There are decades where nothing happens, and then there are weeks when decades happen”. The post-Second World War politico-economic and security alliances are facing headwinds over reciprocal benefits for the US. While the US plans to reduce 20 % of troop deployment and cut diplomatic staff in Europe, the latter has unveiled the ReArm Europe initiative with a $875bn plan. Germany seeks change in the free world’s leadership and raises defence expenditure through constitutional amendments.
France, which in 2023 opined against Europe being a vassal of the US, is proposing an extension of the nuclear umbrella over Europe along with boots on the ground and planes in the air by Britain. Given its balanced approach in the evolving geoeconomics and geostrategy, India is in a sweet spot to act as a bridge between the US and Europe on one side and Russia-China-Iran-North Korea on the other. Where else can one imagine the top-end military equipment of the US and Russia finding a common platform than in Aero India 2025?
If the US desires to become great again through expansionism (Canada, Greenland, Panama Canal), isolationism, transnationalism (it has never been benign), protectionism and retreat from the multilateral organisations, India seeks to achieve Vikshit Bharat through multilateralism, inclusiveness, self-reliance and concept of Vasudhaiva Kutumbakam. PM Modi’s expansive articulation of the view in his interaction with Lex Fridman only substantiates this narrative.
Maj Gen SC Mohanty (Retd)
