Five years ago, during Donald Trump’s visit to India, bilateral relations between the United States and India were thriving, characterized by mutual respect and burgeoning trade agreements. The past few years, however, have seen a significant shift, particularly between India and China. As the geopolitical landscape evolves, it raises the question: Can the emerging India-China relationship reshape trade dynamics and potentially diminish U.S. influence in Asia?
Background: The India-U.S.-China Triangle
In February 2020, Trump was celebrated in India, while simultaneously, tensions between India and China reached a boiling point after deadly clashes in the Galwan Valley. In the aftermath, India took measures such as banning over 200 Chinese apps and fostering closer military and strategic ties with the U.S. and its allies in the Quad framework, comprising Australia and Japan.
Conversely, just this year, India has shown signs of reconciliation with China amid growing frustrations with U.S. tariffs. The Trump administration’s protectionist policies, particularly the imposition of steep tariffs on Indian imports, have prompted India to reassess its adversarial stance towards China.
Rapprochement Between India and China
Recent diplomatic exchanges indicate a thaw in India-China relations. Prime Minister Narendra Modi’s meetings with top Chinese officials, including discussions on border disputes and economic cooperation, signal a willingness to restore stability in their bilateral relations. Both nations have expressed intentions to resume direct flights, facilitate border trade, and improve visa processes, showcasing an eagerness to normalize relations.
Strategically, both countries recognize the costs of prolonged tension. Analysts suggest that India’s pivot towards China is partly a response to the shifting geopolitical dynamics, including U.S. tariffs adversely affecting Indian exports. For China, warmer relations with India could enhance its influence in the Asia-Pacific region and counter U.S. hegemony.
Impact on Trade Dynamics
As India seeks to reduce its dependency on the U.S. market amid rising tariffs, enhanced trade relations with China could provide essential economic relief. Despite India’s trade deficit with China, which was recorded at $99.2 billion in 2024-25, the prospect of collaborative supply chains and increased market access for Indian exports offers a way to mitigate the impact of U.S. tariffs.
China’s overtures to India could also be strategic, aimed at weakening the U.S.-led Indo-Pacific framework. If India aligns more closely with China on trade and economic policies, it could undermine U.S. attempts to rally its allies against Beijing. This evolving dynamic could allow for the formation of trade blocs in Asia that are less dependent on Washington.
Geopolitical Implications
For the U.S., the changing tide in India-China relations poses a challenge to its influence in the region. The Quad, designed to act as a counterweight to China’s expansion, might struggle with internal cohesion if India opts for a more balanced relationship with its neighbor. Should New Delhi align more closely with Beijing, it could dilute the anti-China agenda that has defined much of U.S. foreign policy in recent years.
Moreover, Trump’s focus on isolating China could backfire, as it might inadvertently push India towards Beijing. Analysts dub this situation the "Dragon-Elephant tango," reflecting a complex dance of mutual interests and historical tensions that could redefine regional alliances.
Navigating Strategic Autonomy
India’s longstanding policy of strategic autonomy complicates U.S. efforts to fully integrate it into an anti-China coalition. New Delhi has historically favored a balanced approach, engaging with multiple powers while maintaining its independence. Despite increasing pressure from the U.S. to confront China directly, Indian officials have asserted their commitment to this policy.
As India warms up to China, it may generate complications within the Quad alliance. India’s potential pivot could encourage it to pursue broader agendas, focusing on collaborative solutions to regional challenges rather than solely opposing China.
The Future of Asia-Pacific Relations
The thawing of India-China tensions could reshape the Asia-Pacific landscape, fostering an environment where trade blocs operate independently of U.S. influence. This can lead to a new geopolitical order where both India and China seek cooperation on issues like development financing and climate change, thereby reducing the efficacy of U.S. sanctions and tariffs.
Experts predict that although the warming ties may bring some normalcy to bilateral relations, long-term competition and conflict will persist. The global dependence on Chinese manufacturing and trade will likely continue, compelling nations to find balance while navigating their individual economic interests.
Conclusion
In summary, the evolving relationship between India and China, influenced by changing U.S. policies under Trump, could have profound implications for trade and geopolitics in Asia. As each nation reevaluates its position in a rapidly shifting landscape, cooperation may instead mark the path forward. However, the underlying tensions and competition are unlikely to disappear entirely, suggesting an era of complex interdependence. Countries may find themselves crafting strategies that optimize their national interests, all while balancing the influences of major powers like the U.S. and China.
As we witness this development, it remains crucial for stakeholders to stay informed and adaptable, recognizing that the balance of power in Asia is in constant flux. The actions taken today by these influential nations will shape economic and geopolitical landscapes for generations to come.
