The world is watching India. US President Donald Trump’s plan to impose an unworkable and unheard-of 50 per cent tariff plan on Indian exports to America is forcing Prime Minister Narendra Modi to charter a new course of Indian diplomacy—one his team hopes will consolidate his domestic politics.
For the last seven months, Trump’s diplomacy has been to please his core constituency, to reduce huge American debts, and to work for his plan to Make America Great Again. MAGA is having tremors all over the globe.
India-US relations are in turmoil and will not recover easily. Modi is facing an unprecedented crisis imposed on India for reasons best known to Trump. India is indeed a victim of Trump’s whims and plans for international trade. Now that Modi is forced to make choices, he is opting to do what he knows best. He will be using public diplomacy and international relations to strengthen his domestic support base.
Modi’s diplomacy
Modi’s nationalist voter base will surely rally behind him.
It’s an irony that large numbers of the Modi supporters were totally in favour of strengthening the India-US relationship. But, the great betrayal by Trump will sow the seed of distrust in them.
After Indira Gandhi in 1971-1972, rarely has any Indian leader found himself at such crossroads—forced to choose between a devil and the deep sea. Modi has made the choice.
After prolonged deliberations, Modi has decided to “stand up” against Trump for his anti-Indian stance. His party members are already arguing that India is being victimised for not following Trump’s dictates.
Modi himself gave a clue to his new diplomatic endeavour in his Independence Day speech.
“Modi is standing like the wall against any policy that hurts Indian farmers, fishermen, and the pastoral community,” he said.
As a result, we saw Minister of External Affairs S. Jaishankar meeting Russian President Vladimir Putin in Moscow, exuding confidence.
It’s more than symbolic that Jaishankar can converse with Trump in fluent English and with Putin, he can talk about the histories of the Czars in Russian.
There is a qualitative difference emerging in the age-tested India-Russia relationship.
Modi’s visit to China is a sign of what India is ready to do to handle the onslaught of tariffs on the vulnerable Indian economy. The Prime Minister resorts to “flexibility” in a crisis. “Team Modi”, as one insider put it, is dealing with trade and tariff-related issues are has four powerful ministers.
Minister of Commerce and Industry Piyush Goel is entrusted to negotiate the trade deal and a tariff issue in Washington. Others part of the team are Jaishankar, Minister of Agriculture and Farmers Welfare Shivraj Singh Chouhan, and Minister of Finance Nirmala Sitharaman. They are meeting and exchanging inputs and views in real time.
The tariff war has made Modi a target of the pro-American and anti-China lobbies in New Delhi. Many Indian analysts who have been critical of the Modi government’s politics are not able to digest this overnight resetting of dialogue with China. More so, because it is alleged that China played a role in helping Pakistan during Operation Sindoor.
They want to emphasise that “Modi’s diplomacy is more responsible” for the current mess of the bilateral relationship. They think India’s softening of its stand against China will not be without cost.
However, Trump’s use of Pakistan as a pawn in the game and his stance on New Delhi’s import of Russian oil is ‘very perplexing’ for the entire political spectrum in India.
Modi’s critics feel India is making decisions more out of compulsion than prudence. Otherwise, how can an overnight QUAD go into limbo and BRICS turn useful? These kinds of arguments have rendered meaningless in view of deepening of crisis that would impact the job market and GDP, too. Modi is unlikely to visit the annual event of the United Nations General Assembly (UNGA). No dates of the Quad Leaders’ Summit are finalised yet.
More pungent are those Modi critics who have invested a lifetime in strengthening India-US relations. They allege that the jugalbandi of Modi and Jaishankar failed in assessing Trump’s agenda in his second term.
However, the Modi-Jaishankar duo is disregarding both types of criticism because there is no time left for Modi. In the global marketplace, there are not many suitable alternatives. At this point, China and Russia serve the purpose of Indian requirements.
Modi is the leader in a hurry to ensure that Indian GDP doesn’t slide sharply. Many experts have predicted a fall of GDP by half a percent. “India will have close enough relations with China to handle the enormous crisis created by Trump, and separately, India will be cautious enough to handle long-standing issues, keeping in mind its national interests,” said a source in the Indian government.
Notably, Modi’s China visit at the end of the month to attend the SCO summit is clubbed with his visit to Japan. His plan is to leave behind belied hopes from the second term of Trump and accept realities faster to chalk out new plans.
Privately, like it has been happening in many world capitals, on the Raisina Hill, there is a reality check, an acceptance that India made an error of judgment in assessing President Trump’s second term and his MAGA agenda.
It is important to observe that in his second term, Trump has found no use for India in dealing with China affairs. In fact, on Capitol Hill, the US State Department is almost powerless, and real estate developers like Steve Witkoff are having disproportionate power. The old arrangements of the US government with the friendly countries have crumbled down without notice. Also, Trump’s business instincts have overshadowed the US State Department’s time-tested policies.
Also read: Tariffs, chips, and China — how Trump’s trade playbook affects India
Trump’s heavy bargaining
India’s new approach in multi-lateral relations with China, Russia, South Africa and Brazil is because of Trump, who gave Modi two hopeless choices.
First, can any Indian Prime Minister ever accept publicly that an American President pushed him or her to take a strategic decision vis-à-vis Pakistan, that too when Trump is economical with the truth?
Trump’s shockingly inadequate sensitivity of India and Pakistan relationship is at the root of the issue. He publicly offered a choice to Modi that the latter can never accept. In New Delhi, no political leader would waste a minute in even considering such an option. Maybe this realisation irritates Trump.
Second, in February 2025, during Modi’s visit to Washington, Trump had asked for access to Indian agriculture and dairy markets. These issues were taken up in subsequent trade negotiations. Since then, nothing has gone in the right direction. In India, agricultural issues are as sensitive as the defence forces-related matters.
Indian sources claim that all the developments that happened between March and early July suggest that the issue of opening up India’s agriculture industry and dairy sector for America turned out to be a serious issue that has rocked the bilateral relationship. That explains Jaishankar and NSA Ajit Doval’s series of meetings with Russian and Chinese teams.
The Trump team members, without enough knowledge of the actual ground situation of India’s dairy co-operative infrastructure and agricultural socio-economy, are demanding something no Indian Prime Minister can agree to.
Every time the negotiating team of India and the US, after engaging in give and take, made the final draft of the trade deal and forwarded it to the White House, it was rejected.
Why? Most people claim that Trump wanted to boast to his MAGA crowd that, ‘look, my friend Modi opened up for America the great market of 140 crore people.’ He imprudently thought that corn, soya, beef, cheese, and other dairy products would be lapped up by Indian consumers.
Scholars of India-US relations in Washington and New Delhi are watching in amazement as Trump’s core group presents undiplomatic, unrealistic, and unacceptable demands to India.
No Indian PM can give can offer the kind of concessions Trump seeks in India’s agriculture industry. It is next to impossible in the current situation in New Delhi.
The hope of Trump scaling down his tariffs is quite slim.
As the 27 August deadline is approaching, the Indian establishment is in full-scale damage control mode. Government’s different ministries are calculating risk factors, and the Indian embassies worldwide are searching for new markets.
The reforms in the GST structure and other steps are planned to handle the coming crisis. If the economic impact is not under grip, then the Modi government will have a political crisis on its hands.
In this situation only hope is that Indian exporters will find sooner than later alternative avenues for their products. The tariff terror is real.
The Indian government is not in a denial mode, as is evident from the changing track of diplomacy with China.
Sheela Bhatt is a Delhi-based senior journalist. She tweets @sheela2010. Views are personal.
(Edited by Ratan Priya)