Trump is pushing India to China but can it offset cost of friction with US?

With relations with the United States under strain, Prime Minister Narendra Modi has welcomed a fresh opening in India-China relations, calling them “steady” and “guided by respect for each other’s interests”. This comes ahead of Modi’s planned visit to China later this month — his first trip in seven years to attend a regional security summit meeting in the northeastern city of Tianjin. — where he will meet Chinese President Xi Jinping. Besides Xi, Russian President Vladimir Putin will also attend, bringing together three leaders at odds, to varying degrees, with the United States.Back in New Delhi, Modi also met Chinese foreign minister Wang Yi on Tuesday (August 18), marking Wang’s first India trip in three years. While welcoming Wang, external affairs minister S Jaishankar, said their “two nations now seek to move ahead” from a difficult period in their ties.“When the world’s two largest nations meet, it is natural that the international situation will be discussed. We seek a fair, balanced and multipolar world order, including a multipolar Asia,” he said. “In the current environment, there is clearly the imperative of maintaining and enhancing stability in the global economy as well.”This new momentum into the easing of tensions between China and India, which had ramped up in recent years, is largely due to the Trump administration’s threat to increase tariffs on Indian goods to a whopping 50%, citing India’s imports of Russian oil.India and China subsequently announced measures to boost bilateral ties, including resumption of direct flights, faster visa processing, and facilitation of trade and investment flows. The thaw follows years of tension after the 2020 border clash that derailed relations. National Security Adviser Ajit Doval said after talks with Wang: “I am very happy that in the last nine months, there has been an upward trend. Borders have been quiet, and there has been peace and tranquility.”Both sides agreed to maintain calm along the border through “friendly consultations” even as broader diplomatic engagement accelerates. Beijing offers critical supplies as ties thawIn a key breakthrough, Beijing agreed to remove restrictions on export of fertilisers, rare earth minerals and tunnel boring machines to cater to India’s needs. Indian authorities said these were three key concerns raised in the meeting with Wang.China has already begun shipping rare earth magnets, fertilisers and tunnel-boring machines to India, sources told ET. Indian officials confirmed that shipments are already underway, easing pressure on industries ranging from automobiles to electronics.In April, China had mandated special export licences for seven rare earth elements and related magnets — materials vital for high-end technology products such as EVs, drones and battery storage. The disruption had triggered warnings from companies such as Bajaj Auto and industry associations that production would be hit.Fertiliser/urea curbs had also hurt India’s farm sector. Imports of di-ammonium phosphate (DAP) from China, once a major supplier, plunged to 840,000 tonnes in FY25 from 2.29 million tonnes in FY24. Since January this year, not a single tonne has arrived. Fresh shipments are expected to rebuild DAP stocks in time for the rabi season, ensuring distribution stability and relieving pressure on India’s procurement channels.Jaishankar and Wang also spoke about cross-border pilgrimage, people-to-people contacts, river data sharing, connectivity and bilateral exchanges. New Delhi has reinstated tourist visas for Chinese nationals and both sides are working to restore direct flights. In June, Beijing allowed pilgrims from India to visit holy sites in Tibet. Both sides also agreed to re-opening border trade through designated trading points, namely Lipulekh Pass, Shipki La Pass and Nathu La Pass.Indian companies are, meanwhile, exploring joint ventures with Chinese firms in technology and manufacturing, Bloomberg News reported, Beijing walks tightrope with India and PakistanBut even as Beijing extends the olive branch to India, it has not diluted its strategic partnership with Pakistan. After concluding talks in New Delhi, the Chinese foreign minister heads to Islamabad to co-chair the Sixth Round of the China-Pakistan Foreign Ministers’ Strategic Dialogue with Pakistan deputy PM and foreign minister Ishaq Dar from August 20–22, underscoring Beijing’s delicate balancing act.Pakistan’s foreign office said the visit would “further deepen their All-Weather Strategic Cooperative Partnership, reaffirm support on the issues of respective core interests, enhance economic and trade cooperation, and reaffirm their joint commitment to regional peace, development and stability.”Chinese foreign ministry spokeswoman Mao Ning said, “China and Pakistan are ironclad friends and all-weather strategic cooperative partners, and our bilateral relationship is not affected by any third party and does not target any third party.” At the same time, Mao emphasised that China values relations with both neighbours: “We are willing to enhance friendly cooperation with both countries, and hope that differences between these two countries can be properly handled.”Thorny issues remain unresolved…Despite the positive messaging, major challenges linger between India and China. The border dispute that flared up in 2020 remains a flashpoint, although both sides have stressed the need to “jointly maintain peace and tranquility in the border areas through friendly consultations”. Following talks between Doval and Wang, both sides agreed on the need to take a political perspective of the overall bilateral relationship while seeking a fair, reasonable and mutually acceptable framework for settlement of the boundary question. But it remains to be seen how much of this translated on the ground as China continues to fortify its border with India by building new roads, rail networks and villages that can also serve the Chinese military.The two powers are vying for influence across the Indian Ocean, the crucial waterway for Beijing’s Belt and Road Initiative, a global infrastructure project intended to deepen China’s supply chain networks.From China’s perspective, one of the biggest drivers of tension with India is the suspicion that New Delhi was abandoning its historically nonaligned foreign policy to move further into Washington’s sphere. Beijing points to the Quad defence group, which brings together four large democracies — India, the United States, Japan and Australia — to counter China’s military rise.Whether the next meeting of Quad leaders, expected later this year in India, goes ahead will depend on whether the Trump administration and New Delhi are able to mend their trade spat and rebuild trust, an Indian official said.There’s also India’s ambition to attract the multinational manufacturers that have been trying to reduce their dependence on China.Besides, the government will have to open India more to Chinese firms and investment while continuing to loosen restrictions on visas for Chinese businesspeople. India has blocked Chinese carmaker BYD from setting up factories and has banned Chinese apps including TikTok. US escalates pressure on India, goes soft on ChinaWhile India and China edge closer, the US has sharpened its criticism. US treasury secretary Scott Bessent accused India of “profiteering” from Russian oil purchases, arguing that it had resold crude for windfall gains. “They are reselling, they made $16 billion on excess profits — some of the richest families in India,” Bessent told a news channelBessent defended the absence of secondary sanctions on China, noting that Beijing had increased Russian oil imports only marginally since 2022 — from 13% to 16% of its total — compared to India’s sharp ramp-up after the invasion. “So China has a diversified input of their oil,” he said. On August 11, the Trump administration extended a trade truce with Beijing, delaying tariff hikes for another 90 days and moving to lift restrictions on high-end chip exports to China.The timing of these developments has sharpened India’s strategic dilemma: Beijing offering relief in critical supply chains, while Washington tightens the screws over oil. As one Indian official noted, the “thaw in Sino-Indian ties” is arriving at the precise moment when the US is raising the costs of non-alignment.Vijay Gokhale, a former Indian ambassador to Beijing, said in an opinion piece in The Times of India published recently that China and India still had many diverging interests. But he wrote that China provided India and other developing countries a crucial counterbalance to “Trumpian disorder” as a source of capital and technology and as a partner in fighting climate change.“China is beginning to look better than at any time in the previous five years,” Gokhale wrote.However, the broader regional puzzle remains: As India recalibrating towards China and BRICS, the question is whether improved ties with Beijing can offset the costs of friction with the US — a dilemma that could shape its foreign policy trajectory in the months ahead.Source: Bloomberg, The New York Times, ET and other news reports | Lead illustration: AI