India and China Rekindle Economic Ties Amid Strained US Relations

India and China are rebuilding strained economic ties amid tensions with the US following steep tariffs imposed by President Trump. Modi’s shift towards BRICS nations, including China, Russia, and Brazil, reflects India’s pursuit of strategic autonomy. Recent steps include eased Chinese urea exports to India, visa relaxations, and potential collaborations in clean energy. While mistrust lingers due to historical rivalries, pragmatic engagement is growing. India’s evolving alliances signal a recalibration of its foreign policy in response to global pressures and shifting trade dynamics.

India and China are taking significant steps to rebuild their economic partnership, which was severely impacted by a deadly border clash in 2020. This rapprochement comes at a time when Indian Prime Minister Narendra Modi is shifting closer to BRICS nations, following a series of punitive trade measures imposed by the United States under President Donald Trump.

A Shift in Economic Strategy

The turning point for Modi’s economic strategy came when Trump doubled tariffs on Indian goods to 50%, penalizing the nation for its continued purchase of Russian oil. Adding fuel to the fire, Trump described India’s economy as “dead” and criticized its trade policies as “obnoxious.” This marked a significant strain in the relationship between the two nations, particularly considering Modi’s earlier efforts to strengthen ties with the US. Modi had previously lauded Trump and was among the first world leaders to visit him after his return to the White House.

According to Henry Wang, president of the Center for China and Globalization in Beijing, India’s evolving relationship with China reflects its need to maintain "strategic autonomy" in a shifting global landscape. Wang noted that both countries, as leaders of the Global South, see the value in engaging with one another, especially given the growing external pressures from the US.

Signs of a Sino-Indian Thaw

China, also a target of Trump’s trade wars, has demonstrated its willingness to improve ties with India. In a key development, Beijing recently eased restrictions on urea exports to India, the world’s largest importer of this vital fertilizer. Although initial trade volumes remain modest, this move could pave the way for expanded cooperation, alleviating global shortages and stabilizing prices.

Further signaling a thaw, Modi’s government has lifted restrictions on tourist visas for Chinese nationals, a significant step after years of diplomatic tension. Additionally, reports suggest that the Adani Group is exploring a partnership with Chinese electric vehicle (EV) giant BYD Co., potentially enabling the conglomerate to manufacture EV batteries in India and expand its clean energy initiatives.

Despite these positive steps, deep-seated mistrust remains. The two nations have long viewed each other as competitors, and tensions escalated earlier this year when China reportedly provided military support to Pakistan during its conflict with India. Full rapprochement may take time, but the recent moves suggest a willingness to engage pragmatically.

BRICS and Beyond: India’s Realignment

As relations with the US deteriorate, India is strengthening its ties with fellow BRICS nations, particularly Brazil and Russia. Modi extended an invitation to Russian President Vladimir Putin to visit India, signaling a commitment to deepening economic collaboration. India has also signed agreements with Moscow to bolster trade, including continued imports of discounted Russian oil, which remain a sore point for Washington.

Brazil is another key partner in Modi’s shift. During a visit to Brasilia in July, Modi prioritized discussions on enhancing commercial ties and expanding India’s trade agreement with Mercosur, South America’s customs union. A follow-up conversation with Brazilian President Luiz Inácio Lula da Silva in August further cemented these plans, as both leaders emphasized the importance of bilateral trade.

US-India Relations: A Rapid Decline

Trump’s frustration with India stems from several factors, including its ongoing purchases of Russian oil and its rejection of his claims to have mediated in India-Pakistan tensions. India directly challenged these assertions during a call in June, which officials in New Delhi believe triggered a shift in tone from the White House.

China has seized this opportunity to offer vocal support to India. Xu Feihong, China’s ambassador to India, recently backed Modi against Trump’s trade policies, quoting Chinese Foreign Minister Wang Yi’s denunciation of using tariffs "as a weapon to suppress other countries."

A New Chapter in Global Alliances

The US has historically positioned India as a counterweight to China in the geopolitical sphere. However, Trump’s aggressive trade policies appear to have driven India closer to Beijing and other BRICS nations. While India and China may not restore full trust overnight, their recent actions suggest a pragmatic approach to balancing their interests in a rapidly evolving global order.

As the global economic landscape shifts, Modi’s recalibration of alliances reflects India’s quest for greater autonomy and resilience in the face of external pressures. The rekindling of Sino-Indian ties, alongside deepening BRICS partnerships, marks a pivotal moment in India’s foreign policy trajectory.