Unless US President Donald Trump’s tariff threats are primarily a negotiating ploy, India’s foreign policy has run into a virtual abyss. It faces its greatest crisis since 1998, when India conducted nuclear tests and was subjected to international isolation. The big difference is that the 1998 tests added to India’s overall power, which stands significantly diminished at the present moment. If the Indian economy had grown at an average of 8-9 per cent per annum over the last decade, instead of 6-6.5 per cent, and had India invested heavily in military modernisation, the country’s power in the international system would have been greater. Now, a significant restructuring of policy priorities under pressure might have to be undertaken.
All major foreign policies can be conceptualised as having a core, a semi-periphery and a periphery. This tripartite division is not geographical, but one based on different layers of significance. The core of India’s foreign policy, at least since 2000, has focused on the US, Pakistan, China, and Russia. The semi-periphery includes relations with the UK, France, and Germany in Europe; Israel, Saudi Arabia, UAE, and Iran in the Middle East; India’s neighborhood beyond Pakistan and China; and Canada, Brazil, Australia, Japan, and Singapore. For reasons of space, the periphery need not detain us here.
Unless dramatic reversals take place, the core of India’s foreign policy stands on the verge of collapse. To understand this, let us remind ourselves what the primary goals of Indian foreign policy have been, especially over the last two-and-a-half decades. Four such goals can be easily identified. India cultivated greater closeness with the US; it wanted to avoid a return of equivalence with Pakistan; it sought parity with China; and it wished to maintain cordial relations with Russia.
Cordiality with Russia remains undiminished, though it is under significant threat. A large part of Trump’s tariff penalty is aimed at undermining India’s reliance on oil imports from Russia. Even if the threats lead to a diversion to some other sources of oil, such as Saudi Arabia, India’s dependence on Russia for arms and weapons will not decline rapidly, keeping India-Russia warmth substantially intact. Invulnerable to rapid erosion, India’s defence relationship with Russia is long–lasting.
The other three core elements – concerning the US, Pakistan, and China — are nearly in a free fall.
Shadows of an earlier era
Trump has dealt two crushing blows. First, by threatening to impose a 50 per cent tariff on India’s exports to the US, leaving only electronics such as smartphones and pharmaceuticals out, he has essentially declared a trade embargo on Indian goods (though not on services). The US accounts for nearly a fifth of India’s total exports. It will take time for India to find alternative markets. Clothing from Tiruppur, polished diamonds from Surat, shrimp from Andhra Pradesh, machinery from Noida and Chennai, and auto parts from western and southern India run the risk of incurring losses adding up to tens of billions of dollars, at least in the short run.
The second Trumpian blow is channeled through Pakistan. At least since 1999, if not earlier, the US has consistently downgraded its relationship with Pakistan, placing India on a higher pedestal. This was a reversal of the Cold War pattern of Pakistan first and India later. Presidents Clinton, Bush, Obama, Biden, and even Trump in his first term sought friendship with India. A bipartisan consensus greeted India’s policy makers in Washington, as both Democrats and Republicans embraced India.
The recent India-Pakistan military conflict appears to have brought about a qualitative transformation, showing deepening shadows of an earlier era. Nothing symbolises the change more than Trump’s invitation to Pakistan Army chief Field Marshal Asim Munir for a luncheon meeting in the White House. Military chiefs of foreign countries are not invited to the White House unless they are also the head of state, as General Pervez Musharraf was. Agreements with Pakistan on cryptocurrency and exploration of potential oil reserves (which could well be a stand-in for mining rare earths in Balochistan) have also been struck. Of course, an old-style military alliance is missing, but one should note that the outgoing chief of the US Central Command, General Michael Kurilla, said that Pakistan was a US ally in the fight against terrorism, a surreal statement from Indian perspective and a dramatic change from the days that led to the 2011 killing of Osama bin Laden who was living less than a mile from the Pakistan Military Academy in Abbottabad. A potential role for Pakistan in Iran may also be under consideration.
In other words, this turn might have an autonomous strategic and economic logic. But it was almost certainly aggravated by India not recognising the US’ role in bringing about a ceasefire during the military conflict with Pakistan. India’s diplomacy could not muster up an appropriate response to Trump’s well-known penchant for credit-seeking. What words to use to appease egos, when policy becomes highly personalised, is always a diplomatic challenge. India’s decision-makers could not craft a formulation that simultaneously satisfied India’s sense of self-respect and the dictates of realpolitik or realism.
Let us now turn to China, the last core element of India’s foreign policy.
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Where do we stand?
In 1990, India and China had roughly the same GDP. But today, thanks to a blistering economic growth rate averaging 9 per cent per annum, China’s economy is five times larger than India’s. China’s military power is also significantly greater. As Vipin Narang and Pranay Vaddi write in a recent essay, ‘How to Survive the New Nuclear Age’, China is determined to become a “nuclear powerhouse” under Xi Jinping. (Foreign Affairs, July-August 2025) And “Xi has chosen.. to build hundreds of new silos for land-based Inter Continental Ballistic Missiles (ICBMs), which can be launched within minutes to devastate the U.S. homeland.” In short, China’s military prowess is inching closer and closer to that of the US.
In contrast, India’s search for parity with China — both economic and military — has eluded its grasp. To reach the perimeters of parity, India’s economy needed to grow at 8-9 per cent per annum over the last 10-15 years, as it did in the first decade of this century, while heavy investments in military modernisation were also needed. Neither has happened to a desirable degree.
Equally, the US had begun to see India as a counterweight to China, which after 2012-13 came to be viewed as America’s prime adversary. This logic drove the pro-India bipartisan consensus in Washington, though the rising capabilities of India’s American diaspora also played a role. India received valuable benefits from this turn. Defence cooperation rose and, quite markedly, the world’s third-most valuable company, Apple, also commenced its switch from China to India.
How will India approach China under the new circumstances? Earlier, the US sought India to counterbalance China. Will India seek China’s support for counterbalancing the US, if things worsen further? What will be the price of this greater closeness, given that Chinese support for Pakistan is longstanding and India also has an unresolved border dispute with China? India will have to approach China with a severe imbalance of power.
India’s policy makers and strategic thinkers have to find a way out of this abyss. The key is trying to strike a balance between the norms of self-respect, without which proud nations can’t live, and the realities of power, which can only be ignored at great peril.
Ashutosh Varshney is Sol Goldman Professor of International Studies and the Social Sciences and Professor of Political Science at Brown University. He tweets @ProfVarshney. Views are personal.
(Edited by Aamaan Alam Khan)
India needs to show some hard power. We have been focusing only on economy.