The Trump administration’s sudden tariff threat against India has shaken years of deepening U.S.–India cooperation, forcing Prime Minister Narendra Modi to recalibrate New Delhi’s foreign policy. For China, the rift is a strategic boon: Beijing sees Washington undermining its own Indo-Pacific coalition by alienating India, once a pillar of efforts to counter Chinese influence.

Trade clash triggers geopolitical shifts

Earlier this month, the U.S. threatened to raise tariffs on Indian exports to 50%, citing India’s continued imports of Russian oil. The move undercut the security and technology partnerships Washington had carefully built with New Delhi to contain Beijing. Analysts in India noted that the breakdown of trust “works in Beijing’s favor,” giving China more room to maneuver in South Asia.

Modi and Xi reopen channels

The cooling of U.S.–India ties coincides with a cautious thaw between Modi and Xi Jinping. Their October 2024 meeting in Kazan marked their first in-person talks since 2019, following the deadly 2020 Himalayan border clash. Since then, India and China have restored direct flights, eased visa restrictions, and begun discussing the reopening of three mountain border trading posts. Beijing also allowed Indian pilgrims to travel to holy sites in Tibet.

China’s Foreign Minister Wang Yi is set to visit India this week for the first time in three years, while Modi prepares for his first trip to China in seven years to attend a regional security summit with Xi and Vladimir Putin.

Strategic hedging by New Delhi

Despite signs of reconciliation, deep divisions remain: China’s support for Pakistan, border militarization, and competition for Indian Ocean influence continue to strain trust. Still, Indian analysts suggest Modi is signaling flexibility as “strategic hedging” against Trump’s tariff policies. Former ambassador Vijay Gokhale wrote that China offers India and the Global South a counterweight to “Trumpian disorder,” particularly in technology and climate cooperation.

Implications for the Quad and Indo-Pacific

India’s tilt complicates the Quad alliance with the U.S., Japan, and Australia, designed to balance China’s military rise. Whether the next Quad summit goes ahead in India later this year will depend on whether Washington and New Delhi can resolve their trade spat. Meanwhile, Chinese state media has mocked U.S. efforts, framing Modi’s upcoming China visit as proof of Washington’s failure to “contain” Beijing.