Adrift in a world upended by Trump

A total block of the strait would not only interrupt even the meagre supplies of oil and gas, which Iran is permitting on a selective basis, but also cargoes of strategic commodities such as helium, which is used in semiconductor production and in machines for magnetic resonance imaging in hospitals and chemical fertilisers and sulphur. Both sides are engaged in a game of brinkmanship but this has its limits. The limits are greater for the US because it has much more to lose if the global economy is disrupted beyond a point and a prolonged economic recession takes hold in the world.

India’s relations with countries on its western flank have become skewed because it has given priority to its partnership with Israel, aligned itself with US strategy in the Gulf and, by default, downgraded its relations with Iran. In the wake of the Iran war, India will have to re-order its own relations with the key actors in the region in the direction of greater balance. This will be important for India’s energy security and for the safety of its over nine million-strong diaspora spread across the Gulf.

We cannot predict the course of subsequent events but some enduring trends are already visible. The war marks the end of US global hegemony even if the country remains the world’s largest economy and has the strongest, most sophisticated military. There will be a reordering of geopolitical equations across the world, but this could be an extended and dangerous transition. Navigating this transition will be a huge challenge for India.

India-US ties

How should India deal with the US in this period of transition? Despite its diminished power and agency, the US will remain a substantial power and capable of causing significant harm to Indian interests. Over the past two and a half decades, India’s exposure to the US has significantly increased. The US has become a key source of trade, technology, and investment and a close military and security partner. 

This has been underpinned by a strategic convergence of interests in the Indo-Pacific.

Since the emergence of China as a peer rival, the US saw the Indo-Pacific as the new centre of gravity of global economic and military power. It recognised that keeping intact its global hegemony would rest on maintaining pre-eminence in this theatre — not to merely balance China but to be capable of defeating it. This has changed. Under Trump 2.0, the US considers dominating the Western Hemisphere as critical to maintaining its global hegemony. In the Indo-Pacific, it seeks a posture of deterrence and not pre-eminence. 

This is an important difference and is reflected in the downgrading of the Quadrilateral (Quad) security grouping — of Australia, Japan, India, and the US — which had become a lynchpin of the Indo-Pacific strategy. 

The US did not hesitate to significantly run down its military assets in the Indo-Pacific to support its war against Iran. Its equation with China has changed and the latter has sensed an opportunity to advance its interests in the region. One should not underestimate the importance of the recent visit of the chairperson of Taiwan’s Opposition KMT party, Cheng Li-wun, to China from April 7 to 12 at the invitation of Chinese President Xi Jinping. This is the first such visit by a KMT leader since 2016 and was used by China to revive the 1992 Consensus, concluded with the then KMT-led government in Taiwan, which recognises that there is only one China, though this is interpreted differently by either side. This is rejected by the Democratic Progressive Party, which currently holds office in Taiwan, since it undermines Taiwan’s sovereignty as an independent state. The visit takes place at a time when there are serious questions being raised about US commitment to Taiwan’s defence in the event of a Chinese invasion. 

The visit was followed by unilateral measures by China to resume direct flights between China and Taiwan, restore several trade concessions, and make cross-strait (Taiwan Strait) travel easier. The more relaxed cross-strait relations will, undoubtedly, influence the forthcoming summit between Xi and Trump in Beijing next month unless the Iran war resumes and Trump seeks another delay. What is clear is the display of Chinese confidence that the unification of Taiwan with the mainland may be achieved without war and that time is on China’s side.

Since the Indo-Pacific strategy hinges on the maintenance of the Taiwan Strait as an international waterway, the change in the status of Taiwan would undermine the very rationale of the strategy. This will be of greater consequence for the Asian allies of the US-Japan, and South Korea and Australia — but India’s maritime security would also be affected. This is despite the recent visit to Washington by Foreign Secretary Vikram Misri and the announcement that US Secretary of State and National Security Advisor Marco Rubio may soon visit India, and that a meeting of the Quad foreign ministers could take place during the visit.

The rivalry between the US and China is structural and likely to persist. However, even a tactical shift in these relations can have significant consequences for US allies and partners. It’s like a pendulum. Small oscillations at the top between the major powers lead to larger swings at the bottom for the lesser powers. The challenge for India is to reduce its vulnerability to shifts in US policy by progressively reducing its exposure to the US and diversifying its trade, technology, and security partnerships.

There is an important shift in US perceptions on India’s strategic value to the country. There has all along been a view in some quarters in the US that America was not getting enough of a return on its investment in India’s transformation into a great power; and that India would never fight a war alongside the US. An even more negative view, which is being articulated by several leading members of the Trump administration, is that the US should never make the mistake that it did with China — that it is US support that created a powerful rival in China. The same could happen with India. One also sees limits being placed on Indian professionals seeking opportunities for advancement in the US. Anti-immigrant sentiments targeting Indians have grown. The texture and flavour of India-US relations have changed, and this should be factored in while making policy in India. It would be wrong to assume that these changes are specific to the Trump presidency. In fact, they represent deeper political and social changes in the US and may persist even beyond the current administration.

New alliances

While Trump has upended the prevailing international order, he has also created opportunities for new alliances and partnerships among the countries he has targeted. India is already strengthening its relations with existing partners in the Quad — Australia and Japan — and with South Korea. The US has turned Europe into an adversary and has threatened to leave the North Atlantic Treaty Organization (Nato). The West as we have known it for decades does not exist any longer as an identifiable and coherent entity with shared interests and political values. Europe too feels threatened by China’s predatory economic policies and its alliance with an aggressive Russia. It is this changed geopolitical reality that enabled India and the European Union (EU) to finally conclude an ambitious free-trade agreement (FTA) in January this year, after on and off negotiations over more than two decades. For India, the EU can become an important source of both capital and technology and a significant market. For the EU, only India offers the scale that in the past China had both for trade and for investment. As Europe expands its defence spending in response to American unreliability and a growing Russian threat, there are synergies in India’s own quest for diversification and indigenous manufacture. There could be collaborative innovation and production, and India could also become an important source of highly skilled manpower.

There is a similar driver at play in India’s relations with Japan, South Korea, and Australia as it becomes clear that the US is no longer as committed to the Quad as during Trump’s first term as President and subsequently under President Joe Biden. These countries share India’s concerns about China and are prepared to consolidate and expand their economic and security partnership with India even as the salience of the US declines.

For India’s foreign policy, there are two other significant challenges that do not directly relate to the Trump factor but would nevertheless contribute to building resilience against the disruption and unpredictability that he has unleashed across the world. These relate to India’s relations with Southeast Asia and with its South Asian periphery.

India’s relations with Southeast Asian countries, with which it shares longstanding historical and cultural links, saw a steady expansion since Prime Minister Narasimha Rao announced the “Look East” policy in 1992. The Narendra Modi government upgraded this to the Act East policy after taking office in 2014. The expansion in ties was reflected in India becoming a sectoral dialogue partner of the Association of Southeast Asian Nations (Asean) in 1992, a full dialogue partner in 1996, and a summit-level partner in 2002. This was upgraded to a Strategic Partnership in 2012 and eventually to a Comprehensive Strategic Partnership in 2022. India also concluded an FTA with Asean in 2005 in goods but not in services. It became involved in extended negotiations on the Regional Comprehensive Economic Partnership (RCEP), the world’s largest FTA among 16 countries, comprising Asean’s 10, China, Japan, South Korea, Australia, New Zealand, and India. The negotiations began in 2012 and concluded in 2019. India was fully expected to sign the final agreement in November 2019 but unexpectedly withdrew at the last moment. A key economic pillar of India’s Act East policy was dismantled and pushed India to the margins of a region where economic growth was the most dynamic in the world. India’s profile in this region of great importance has diminished precisely at a time when China has been making greater inroads there, stitching up supply chains that it dominates. There may have been a calculation that by becoming part of the Indo-Pacific strategy, led by the US, India could still be an influential presence in the region. With the US downgrading this strategy and with the possibility of a US-China détente, limited, though this may prove to be, India finds itself a less consequential player in the region. This needs to change. Though this may be challenging, India could seek to return to the RCEP, which would be supported by Australia and Japan and perhaps some Asean countries as well. It should also apply to become a member of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which is a higher-level trade agreement among 13 Asian and Pacific countries, led by Japan. Neither the US nor China is a member of the CPTPP, though China has applied to become a member.  

India should take a bold and strategic decision to become a member before China does.

Irrespective of what happens to India-US relations, India’s own subcontinental neighbourhood will continue to be the most critical component of the country’s foreign relations. A politically stable and economically prosperous periphery is indispensable to India’s security and can contribute significantly to India’s economic security. By its sheer size and economic and technological dynamism, India can emerge as an engine of growth for all its neighbours. The economic integration of South Asia is in India’s own interests, and it should be led by India. The region as a whole could be more successful in promoting mutual resilience than in pursuing this as separate national endeavours. There should also be an urgent awareness of the threats that the region faces as a result of climate change and environmental degradation. 

These can only be tackled through regional collaboration, which only India can lead. The deep cultural affinities the people of the subcontinent share are an asset that can be leveraged to promote regional integration. 

This would also minimise the opportunities for external powers to meddle in the subcontinent to India’s detriment. If you leave open spaces, someone will walk in.

The old order is in the throes of an unpredictable transition. This transition is full of risks but with a well-thought-out strategy, India could help shape a new order in association with partners both old and new. The American connection will count for less.