Last Updated:August 25, 2025, 12:26 IST
As India balances ties with Russia, China, new Western partnerships, and the hope of a renewed US alliance, it stands stronger in a multipolar world.
US President Trump and Russian President Putin with PM Modi | File Image: AP
India’s firm and calibrated response to the US imposition of 50 per cent tariffs on its exports in August 2025 has been a masterclass in geopolitical strategy, transforming a potential economic setback into a platform for global influence. Under Prime Minister Narendra Modi’s leadership, India has demonstrated restraint, resilience, and diplomatic finesse, refusing to yield to pressure while forging new partnerships and keeping channels open for reconciliation with the United States. This approach has not only cushioned India against economic fallout but also elevated its stature as a pivotal player in a multipolar world.
A Measured but Firm Response to US Tariffs
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When the US announced a 25 per cent baseline tariff, followed by an additional 25 per cent tied to India’s purchase of Russian oil, it aimed to guilt-trap India over its robust energy alliance with Russia. Rather than reacting impulsively, India chose a path of strategic restraint. Foreign Minister S Jaishankar deftly countered US claims that India’s oil purchases fuelled Russia’s war machine, pointing out that the US had previously encouraged such imports to stabilize global energy markets.
This fact-based rebuttal exposed inconsistencies in US policy, particularly as China, the largest buyer of Russian oil, was exempt from similar sanctions. India’s economic resilience underpinned this composure. With $702 billion in foreign exchange reserves and a domestic demand-driven economy, India is well-equipped to absorb the projected 0.3–0.4 per cent GDP loss for FY2026, as estimated by Care Ratings. The exemption of India’s services sector, including pharmaceuticals, from tariffs further softened the blow.
Instead of retaliating, India used the crisis to diversify its geopolitical and economic alignments, showcasing a maturity that few nations have displayed under such pressure.
Reviving the Russia-India-China Axis
The tariff crisis spurred India to breathe new life into the seemingly dormant Russia-India-China (RIC) axis within the Brics framework, reinforcing its strategic autonomy. This move was not about abandoning the West but about balancing partnerships to reduce dependence on any single power.
India’s special strategic partnership with Russia has been a cornerstone of its foreign policy since the 1970s, and the tariff crisis only accelerated efforts to strengthen this bond. During EAM Jaishankar’s visit to Moscow on August 21–22, 2025, both nations reaffirmed their commitment to expanding trade, particularly in hydrocarbons. India’s oil imports from Russia surged to 1.6 million barrels per day in the first half of 2025, up from 50,000 bpd in 2020, with plans for joint energy projects in the Russian Far East and Arctic shelf.
Bilateral trade hit a record $68.7 billion by March 2025, with India pushing to narrow its $59 billion trade deficit through increased exports of pharmaceuticals, agriculture, and textiles. Diplomatic engagements further solidified this partnership. Two telephonic conversations between PM Modi and President Vladimir Putin – before and after his Alaska meet with US President Trump – focused on deepening ties and addressing the Ukraine conflict, with Putin accepting an invitation to visit New Delhi later in 2025.
National Security Advisor Ajit Doval’s discussions in Moscow emphasised defence cooperation, critical for India’s military needs. These steps underscored India’s resolve to maintain robust ties with Russia, defying US tariff pressures while securing energy and defence interests.
The crisis also catalysed a cautious reset in India-China relations, strained since the 2020 Galwan border clash. Chinese Foreign Minister Wang Yi’s visit to New Delhi on August 18–19, 2025, and PM Modi’s planned attendance at the Shanghai Cooperation Organisation (SCO) summit in China on August 31, 2025 – his first visit since 2018 – marked a significant diplomatic breakthrough.
Building on PM Modi’s meeting with President Xi Jinping at the 2024 BRICS summit in Kazan, both nations agreed to resume direct flights, enhance river-sharing data, and relax visa restrictions, boosting trade and investment. China’s decision to lift curbs on rare earth mineral exports addressed a crucial need for India’s technology and manufacturing sectors.
Progress on the Line of Actual Control (LAC) dispute, with commitments to a “fair, reasonable, and mutually acceptable” resolution, further signalled a pragmatic approach. Within BRICS and SCO, discussions on de-dollarisation and RIC trilateral talks have gained momentum. This tactical engagement with China allows India to diversify trade while maintaining strategic rivalry, balancing economic gains with security imperatives.
Strengthening Western Partnerships
India has seized the tariff crisis to bolster ties with Western partners, offsetting potential losses from US markets and reinforcing its global economic position. India and the UK recently signed a landmark Free Trade Agreement (FTA), set to boost bilateral trade by £25.5 billion and target $120 billion by 2030. The agreement, with phased tariff reductions on UK exports like whisky and medical equipment, protects sensitive Indian sectors like smartphones, diversifying India’s export markets and enhancing its resilience against US tariffs. This FTA positions the UK as a key partner in technology and investment, strengthening India’s economic leverage.
Moreover, India’s strategic partnership with the EU, particularly France, has also gained traction. While specific details on France’s “fresh commitments” remain broad, the 2008 India-EU summit in France highlighted trade and investment ties, with France playing a pivotal role in defence and energy cooperation. Ongoing EU-India FTA negotiations since 2007 suggest France’s continued support for deepening ties, particularly in technology and energy transition. These partnerships enhance India’s geopolitical standing, offering alternatives to US-centric trade.
US Re-engagement and the Resilience of Bilateral Ties
The US tariffs have strained a strategic partnership cultivated carefully since President Bill Clinton’s 2000 visit to India. Yet, India’s indispensable role as a counterweight to China and a Quad member ensures the US cannot afford a prolonged rift.
The appointment of Sergio Gor, a trusted confidante of President Trump, as the new U.S. ambassador to India signals Washington’s intent to repair ties. Ongoing cooperation in technology, defence, and space – such as the NASA-ISRO astronaut mission planned for 2025 and US investments by firms like Apple – underscores the depth of this relationship.
While the India-US trade negotiations may have come to a temporary halt, India’s clarity and focus on protecting sensitive sectors like agriculture, combined with its strategic autonomy, positions it to negotiate from strength. The tariff crisis, rather than derailing this partnership, has prompted both nations to reassess and potentially re-engage. It has provided both countries the space that often strengthens long-term bonds. Whenever that happens, it will now be on India’s terms.
India’s Geopolitical Ascendancy
India’s response to the tariff crisis has cemented its position as a global power. By deepening ties with Russia and China, securing the UK FTA, and leveraging France’s support, India has diversified its partnerships, reducing reliance on the US market. Its principled stand against tariff bullying, coupled with an open door for US re-engagement, reflects a mature, calibrated strategy.
PM Modi’s leadership – marked by deft diplomacy with Putin, Xi, and Western leaders, alongside domestic initiatives like Make in India – has turned a potential crisis into a showcase of India’s resilience and influence. As India balances robust ties with Russia, fresh engagement with China, new Western partnerships, and the hope of a renewed US alliance, it stands stronger in a multipolar world – a testament to Modi’s strategic vision.
The writer is a BJP National Spokesperson and author. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
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