Why Should India Deny Oxygen to The Idea of BRICS Currency?

Introduction

Postulated as a framework by Jim O’Neil for the emerging economies, originally BRIC in 2006, metamorphosed into BRICS with the China-sponsored membership of South Africa in 2009, despite it not fulfilling any criteria for an emerging economy. While an absence of coherent ideological and governance commonalities is evident from the mere composition of the group, it has consistently grown in its international stature over the decades. With an ascendant economic growth trajectory, the group is slowly evolving into a counter to the G7 countries. The BRICS+ countries, making up 45.2% of the world's population and accounting for 36.7% of global GDP in PPP, 23.3% in global exports, are expected to surpass the G7 as per EY by 2026.

The global merchandise exports of the BRIC plus countries increased by 12.6% points from 2000 to 2023, around the same time the G7 exports fell by 16.2% points. The rise of BRICS has eventually narrowed down the global economic landscape into G7, BRICS and others. Indeed, the global exports of the rest of the world marginally increased during the same period. Within the BRICS+, India and China have emerged as prominent players both in terms of their growing economic size and population. Instructively, as per the GDP ranking based on Purchasing Power Parity (PPP), China is pegged as the number one economy, with India projected to clinch the second position by 2028 1.  Other BRICS countries like Brazil, Russia, and the UAE are expected to make a giant leap in terms of global exports. Concomitantly, the economic role of each of these countries is bound to expand. Saudi Arabia remains ambivalent about BRICS and has been hedging its bets.

Washington Consensus and the Bretton Woods Institutions

The Bretton Woods System was instituted in the aftermath of World War II, which pegged the fixed exchange rates backed by USD or the US gold reserves (22,000 tons).

This enabled the US government to convert USD into gold reserves when requested by foreign central banks. This arrangement allowed the US Central Bank to print US dollars depending on the world’s demand without worrying about the inflationary consequences. Soon, growing imbalances in the US economy eroded confidence in the dollar’s stability. Unable to withstand the US inflationary pressures, the Bretton Woods System collapsed and in 1971, then US President Nixon suspended the convertibility of the USD into gold. Ever since, the USD has continued to remain as the global reserve currency, though it wasn’t backed by any formal treaty. There is no international treaty obligating nations to use USD, as the so-called Washington Consensus has withered away.

To reduce reliance on the USD, the IMF has introduced Special Drawing Rights (SDR) as a supplementary reserve asset. However, following the sudden escalation of prices following the Yom-Kippur war in 1973, SDRs failed to finance global trade. Economists attribute various reasons for the USD’s dominance. Prominent among them are the size of the US economy, full convertibility, a full-fledged financial system to back it, capital mobility, a strong banking system and an independent central bank. Although China has a large economy, it falls short of other requirements. In the case of the Euro, the monetary union is not backed by a fiscal union. For any currency to have wider acceptance, it must have the above-mentioned factors.

The emerging global economic trendlines are accompanied by a swift decline in the share of the US dollar as the international currency for global trade from 71.5% in 2000 to 58.2% in 2024 2. Given the increasing share of the BRICS countries, the economic policies of individual countries and the group collectively are going to have an impactful influence on the global economic landscape. It is notable that despite the uncertain US economic policy and dollar weaponisation post Russian invasion of Ukraine, the dollar share has remained unchanged.

US Unilateral Measures

However, driven by geopolitical factors, Trump’s trade tariff war, to insulate their economies, BRICS+ is attempting to coordinate their policies. A coherent approach would eventually translate into downsizing the dominance of the US dollar as the choice of global payments and transactions. Pertinently, BRICS might even want to circumvent the SWIFT trading helmed by clearance from US Bank and might be interested in creating new financial instruments.

After Trump unilaterally withdrew from Iran’s nuclear peace plan, JCPOA (Joint Comprehensive Plan of Action) and reimposed punitive sanctions on Iran, they proved to be very effective as Iran was shunted out from the SWIFT system. The other European countries that still wanted to honour the agreement announced plans to create an alternate system to continue payments. However, they couldn’t get far ahead with their efforts for fear of America’s weaponisation of the dollar. This decline in usage of the dollar, increasingly seen as de-dollarisation, has triggered fears of a shift in the balance of power, eventually reshaping the global economy and markets. Luis Oganes at J.P. Morgan said, “The concept of de-dollarisation relates to changes in the structural demand for the dollar that would relate to its status as a reserve currency. This encompasses areas that relate to the longer-term use of the dollar, such as transactional dominance in FX volumes or commodities trade, denomination of liabilities and share in central bank FX reserves,” 4. But as of now, the US dollar makes up for 88% of global traded forex volumes as opposed to 7% of the Chinese yuan.

Though China has unseated the US as the topmost global exporter, the US dollar continues to maintain its overall dominance. Its share in global markets is five times the United States’ share of global imports. Indeed, owing to its extensive use, emerging economies, which by far have increased global activity, are currently subjected to the turbulence stemming from the volatile US markets.

Alluding to the US dollar’s entitled status that can create a ripple effect across the globe, French Finance Minister Valery Giscard d’Estaing, in the 1960s, termed it as an “exorbitant privilege”, and it continues to wield a disproportionate control over global trade. Mark Carney, currently the Prime Minister of Canada, in his role as the governor of the Bank of England, in 2019, suggested that emerging countries must join to create their own replacement reserve currency to circumvent the ‘destabilising role” of the US dollar 5.

Indeed, leveraging this ‘exorbitant privilege’, US trade advisor to Trump, Peter Navarro issued summary threats to India and warned it to “act like a strategic partner of the US” 6.

BRICS Currency: To be or not to be!

Except for sizeable combined economic activity, BRICS+ doesn’t have anything in its favour to launch a common currency. Geographically flung apart, with dissimilar economic sizes and monetary policies, achieving fiscal and monetary integration of the BRICS nations is extremely difficult. The EU is a striking example of issues that countries must face when the economies are not equal and comparable. Absence of ideological coherence, strong political institutions and different levels of development and their capacity to take on debt further render unrealism to the idea of a common currency. A single currency needs a common interest rate. Given the existence of different price levels in BRICS currencies, stitching a cohesive monetary policy is very difficult. For the first time at the 14th BRICS Summit, in the shadow of the Ukraine war, Russian President Putin announced the BRICS plan to issue a “new global reserve currency” 7.

BRICS New Development Bank (NDB) President Dilma Rousseff indicated that there is an agreement in principle to use a new settlement currency called the Unit, which will be backed 40 per cent by gold and 60 per cent by local currencies in the BRICS bloc. The idea initially received some traction at the 2023 Johannesburg Summit. Ahead of the summit, Brazilian President Lula, expressing support, queried, “Who decided that the dollar was the (trade) currency after the end of gold parity?” 8.

Drawing wisdom perhaps from the struggles faced by the European Union countries post-2008 financial crisis to maintain fiscal balance, BRICS has junked the idea of a common currency. Setting the record clear, Yury Ushakov, adviser to Putin, stated that BRICS countries are focusing on increasing cross-border trade and settlements in local currencies and indicated Russia’s intention to create an independent BRICS payment system based on digital technologies and blockchain. Subsequently, at the 2024 Kazan BRICS Summit, Putin clarified that they are not fighting the dollar but deterring the weaponisation of the SWIFT platform 9.

Indian Response to the Idea of BRICS Currency

From the beginning, India has consistently stayed away from the idea of BRICS currency. Reiterating India’s stand, EAM Jaishankar has clarified that India would back out of creating a new currency. The root of BRICS' frustration with the dollar is the loss of autonomy over economic policy. The euro was launched 50 years after France and Germany set aside their hostilities. Unfortunately, old and new members of BRICS have long-standing rivalries, viz, India Vs China, UAE Vs Iran, which will preclude the idea of fiscal convergence. But the idea of BRICS currency can potentially unsettle the US, as the BRICS nations are part of large trade blocs, and together these trade blocs include 64 countries. Though the concept is a non-starter, any alternate payment mechanism adopted by BRICS can have an impact on the dominance of the US dollar.

Trump’s America First Policy, driven by the discriminatory tariff war and secondary sanctions, has substantially increased the financial volatility. Amid heightened fears of weaponisation of the dollar as a geopolitical tool, to mitigate vulnerabilities of dollar exposure and US monetary policy, BRICS countries are rapidly increasing trade in local currencies, which has surged to 90% from 65% two years ago 11.

At the heart of India’s approach to BRICS currency is to uphold economic sovereignty, which aligns with its quintessential policy of strategic autonomy. Central to its foreign policy is the advocacy of a multipolar, inclusive and equitable world. A world where power is diffused among several power centres and not concentrated in one or two powerful states, with a range of middle powers contesting for influence. Such a diverse world comprising nations with greater autonomy would foster greater international stability, security and prosperity. Centred on this principle, India promotes ‘multi-alignment’, stitching diversified partnerships with different countries. India believes that a critical rebalance of power would prevent a unipolar or bipolar world.

 

Given its principled approach for a multipolar world order, India firmly stands with the BRICS countries, which is a diverse group of countries with common interests seeking to navigate the global challenges through collaboration and cooperation. This is also reflected in its committed stand to develop an alternate financial system that is more inclusive and less vulnerable to geopolitical coercions. India is not interested in replacing the US dollar and its dominance. For that matter, India is not in favour of a common BRICS currency. However, it is keen on exploring parallel mechanisms where countries are sufficiently insulated from the looming threats of ‘economic warfare’. Diversification is the mantra that India seeks to strongly promote to evade the wanton weaponisation of trade and financial structures by powerful nations.

India and China are the powerful economic weights within BRICS+. Making 60% of BRICS GDP and as a major trade partner of all BRICS nations, they wield immense heft. Beijing has markedly benefited from the surge in the intra-BRICS trade in recent years. The expansion of BRICS has augured well for its trading prowess, with the balance within BRICS increasingly shifting towards Beijing. An increase in intra-BRICS trade is helping China to counterbalance the impact of the trade war with the US. Steadily buttressing its economic position, Beijing is evolving as a dominant player and might gain more mileage with a common BRICS currency.

Dollar Hegemony versus Yuan Hegemony

China would use the proposed BRICS currency to gain financial hegemony. As the Euro experience suggests, Germany, which has been the economic heavyweight in the European Union, has driven the entire exercise of creating the new currency and made it the intervening currency. Being a dominant economy, China would likely emulate the same and call the shots12. All other nations would have to oblige to Chinese dictates. Yuan is a minor international currency and part of the SDR currency basket; a common BRICS currency will boost its dreams of internationalising the yuan and even challenge the hegemony of the US Dollar. Though China is the largest exporting market and an economic superpower, the dream of making Renminbi a global reserve currency has been rather wishful despite efforts by China since 2009 onwards. A BRICS currency can lead to the dominance of the Yuan and China’s monetary policies.

Central to the idea of BRICS currency is to reduce dependence on the US dollar and bestow economic policy autonomy for countries. But by effectively integrating the monetary policies under China’s overbearing influence in BRICS would replicate the same process that BRICS countries want to avoid.

BRICS currency would, in fact, make China more powerful, lending it the power to veto to stall or allow plans to suit its economic interests. BRICS has been formed to reduce reliance on any powerful bloc and attempts to change the Western-led world order into a multipolar system where developing countries can wield a proportional influence commensurate with their global economic activity.

China’s Geoeconomic Trap

India and China have contrasting visions for BRICS, which is evident from Beijing’s enthusiasm for expanding the group to turn into a support organisation for its geopolitical agenda, including promoting its Belt and Road Initiative and Global Development Initiative. It was an attempt to strengthen its influence among the developed countries. Nations seeking an opportunity to get economically closer to China reposed great interest in joining BRICS. Watchful of Beijing’s geopolitical agenda for BRICS, India has been cautiously supportive of the process. China silently harboured the ambitions of turning BRICS into a China-centric group and was inclined to position BRICS as another venue for “anti-US political activism”13.

Beijing harbours a vision to dethrone the US as the sole hegemon, while India is desirous of a world order where a wider range of voices, particularly from the developed world and the Global South, are objectively considered for decision-making processes.

In fact, India’s discussions at BRICS have been development-oriented with a focus on South-South economic and financial cooperation. With an economic potential to evolve into a counterpart of the G7 countries, India wanted to promote engagement between both groups. The 2025 Rio Declaration explicitly called for a comprehensive reform of multilateral institutions such as the International Monetary Fund (IMF), World Bank, World Trade Organisation (WTO) and the UNSC to make it more inclusive, credible and representative of contemporary global realities14. India’s approach underscores a more equitable participation, advocating for the right of development within the global system.

China nurtures an ambition of a unipolar Asia and a bipolar world. Being a revisionist power, China is inherently hegemonistic with a tendency to utilise every intergovernmental organisation to promote its initiatives.

Historically and culturally, India is hard-wired to strategic autonomy and resists a subservient relationship. It refuses monopolisation of organisations or institutions and believes in building partnerships and fostering cooperation for shared developmental goals. India’s solutions for reducing reliance on the US dollar stem from the domestic success of the digital payment infrastructure, Unified Payment Interface (UPI), that revolutionised India’s efforts towards financial inclusion and seamless financial integration.

Having firmly rejected the idea of a common BRICS currency, with tech-driven innovation, India is now working on an alternative to the SWIFT system through UPI. India is exploring connecting with other alternative payment mechanisms like the BRICS Pay System and others. India is prioritising internationalisation of the rupee by bringing through transformative cross-border payments with UPI and making it globally interoperable. Bolstering the BRICS call for trade in national currencies, the RBI is now allowing foreign banks to open Special Rupee Vostro Accounts (SRVAs) to facilitate trade settlements in rupees. As of now, India is expanding its rupee trade with 18 countries. Alongside, RBI is piloting a digital rupee to eventually use for cross-border projects like mBridge, a multilateral central bank digital currency initiative (CBDC) 15.

In the process of reducing dollar dependence, India has never sought to replace it with any other currency. On the contrary, it is actively pursuing alternative globally operable payment mechanisms for trade and financial transactions. In other words, “India is not anti-dollar. It is anti-weaponisation of the dollar”.

Trump’s aggressive sanctions, tariffs and penalties have sparked a reassessment among nations and galvanised their efforts to reduce reliance on the US dollar. The double whammy of being subjected to the vulnerability of the US dollar and a systemic risk of sanctions is pushing nations to explore alternatives. As a dominating trading partner within BRICS, any common currency arrangement will be dominated by Beijing. Being an authoritarian state with questionable transparency, weak institutional checks and limited commitment to the rule of law, India will never agree to a common BRICS currency.

With a comparable demographic and diplomatic heft, ordaining consensus-based functioning, India pushed back calls for a common BRICS currency. The overarching goal of Chinese foreign policy is to turn BRICS into a counterbalance to the US. Besides, China’s plot of keeping the border issue alive and its efforts to encircle India and its strategy to challenge India’s status as the regional security power have brought things to a nought. Beijing’s constant needling of India’s external security interests with military and diplomatic support to Pakistan has constantly fed into New Delhi’s suspicions.

The festering, unsettled border dispute has long foreclosed the chances of a Sino-India entente. Additionally, China’s belligerent, muscular expansion has always been a constant source of instability and peace in the region. China’s utter disregard of India’s three Ms- mutual sensitivity, mutual respect and mutual interest has pushed India into circumspection. While the lack of trust and rivalry can be a source of dissension, in the long term would sufficiently safeguard the BRICS platform from turning into a Sino-centric organisation and lay the foundations for a pragmatic multipolar world order.

Conclusion

Trump’s economic coercion in his second term will further force nations to further diversify their relation, undermining the organisational foundations of the Western-led world. Emerging countries are now increasingly coopting advanced technology to bolster their foreign policy to navigate through the geopolitical uncertainties. Blockchain-backed bitcoins were used by countries in the aftermath of the 2008 financial crisis to avoid central bank surveillance. In the face of burgeoning punitive sanctions, nations are taking a fresh recourse to technology for creating a new parallel financial architecture to carry out transactions without a hitch.

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Hitler: The Proclaimed Messiah Of The Palestinian Cause

 

At times, startling revelations and uncanny disclosures made in books spark an appetite to delve deeper into the subject to satisfy curiosity. Months after the gruesome Hamas terror attack in Israel in October 2023, the world witnessed a surge of ‘from river to sea’ slogans renting the air. The partisan debates, one-sided attacks and bold calls for the liquidation of Jews with vehemence were hardly met with any counter. The book, “Israelophobia: The Newest Version of the Oldest Hate & What To Do About It” by Jake Wallis Simon, deciphered the oldest hate and unabashedly exposed the various players of this punitive discourse.

The book drops a truth bomb of the Palestinian Grand Mufti of Jerusalem, Hajj Amin al-Husseini’s Lemonade Summit with Führer Hitler.  Husseini, who harboured the dreams of becoming the ruler of the Arab world, leveraged Hitler’s hatred for Jews as the gel to forge a bond with the Nazi ruler. Placing Islam in high esteem, reportedly, Hitler had portrayed ‘Islam as a strong and practical faith’ and described Christianity as a ‘soft, artificial, weak religion of suffering’. In one of his memoirs, Husseini boastfully claimed that he supported the Nazis, “because I was persuaded and still am that if Germany had carried the day, no trace of Zionists would have remained in Palestine (P 140)”. This was a revelation for me. Since then, I longed to learn more about the collaborative scheme that vowed to destroy world Jewry. Buried in the annals of history, this coalition forged in ideology and smelted in the embers of hatred with profound implications was dismissed as rhetoric and forsaken. This collaboration, fuelled by shared loathing, hardly garnered international attention, thanks to the swift portrayal of Arabs as the victims.

Far removed from the Nazi and Arab scheming, back home, Hitler’s fascism turned out to be the popular stick to beat ‘Hindutva’. Ironically, the real culprits who leveraged this ideology have been spared this castigation, while Hindutva icon, Veer Savarkar, who endorsed the vision of “Jewish Homeland”, continues to be derided. Peeling the layers of history, Aabhas Maldahiyar, through his scholarly work, “Hitler: The Proclaimed Messiah of the Palestinian Cause,” sets the record straight. 

More than eighty years after World War II, the Middle East remains precariously poised, with Israel still battling radical Islamic factions that shout “death to Israel”. Rather than facing condemnation for the violence unleashed by terrorists, the ideological stream spanning continents continues to promote perpetrators and celebrate hatred. No part of the world is immune to the magnetic pull of ideology rooted in anti-Semitism.

Decades ago, intolerant, supremacist ideologies of fascism and Islamism converged to overthrow British Colonialism, exterminate Jews and oppose communism. Dripped in their venomous anti-Semitism, Hitler co-opted the Grand Mufti of Jerusalem, Husseini, to turn the Middle East into a crucible for ideologies. Amid the throes of war, Hitler appeased Muslims, stirring hope of liberation as they struggled against Jews and the British. The Arabs, in turn, created favourable propaganda about the Third Reich as the liberator among the English colonies. Hitching together the ideologies, both sides indeed, deployed scholars to build compatibility between National Socialism and Arab Nationalism.

Demonstrating extraordinary acumen, tomes of literature were generated to facilitate a close collaboration. In the Arab world, the rise of Hitler was celebrated. This admiration attained spiritual and theological overtures, with intellectuals joining the chorus. Interventions like- “Arabia will wake up on the day God sends a faithful man who believes in his actions and who summons the people of Arabia like Hitler has summoned the German people”(p 127). Soon, articles in press elevated him alongside the Prophet Muhammad. Not to be left behind, signalling the apotheosis of Hitler, Imams proclaimed, “God has sent the twelfth imam to the world in the form of Adolf Hitler”. Hitler’s deification culminated with his images being held alongside depictions of Ali, implying, “Ali is the first and Hitler the last imam”(p 128).

War is nothing but a battle of narratives. To lend the propaganda a religious legitimacy, the machinery selectively extracted passages from the Quran to stoke anti-Jewish sentiment. Sharpening some of the rough edges of Mein Kampf, passages critical of Arabs were purged from the translations found in Egypt, Morocco, Iran and Lebanon. Refraining from overstepping on the sensibilities of the Arabs, the definition of anti-Semitism was applied only to Jews and not to Arabs. The immaculate propaganda accumulated enormous goodwill for Hitler, though he never formally declared support for Arab independence. Husseini used inflamed enmity against the Jews to stoke the Arab revolution and the decimation of the Jews in Palestine.

The motivated demonisation of the Nazi-Arab alliance and the sinister playbook of the Third Reich, portraying Jews as a malevolent force, has had far-reaching consequences. Even now, the extermination of Jews is compellingly justified by the Islamo-leftist-intellectual cabal, deeming them as an ‘occupying force’ while the Arabs adorn the cloak of victimhood. The sharp, stinging, unrestrained prose of Maldahiyar hits readers' conscience as sharp arrows. Injecting doses of truth anti-venom, the author rightly establishes the presence of Jews in the region dating back to the second millennium BCE.

Taking the readers through a bewildering maze of name jumble, the author traces the specific markers of ‘Israeli identity’, pegging it to Iron Age I (p 19), precisely to 1209 BCE. The perpetually chaotic region of the Middle East has remained intensely contested with the rise and fall of several kingdoms. Retaining their identity, fleeing to safer regions under intense attacks, yearning for their roots, Jews always regrouped and returned to rebuild their fortunes in the region that was referred to as ‘Syria Palaestina’.

Laid out into thirteen chapters, the book explores the Nazi-Islamic collaboration in great detail. Offering a dedication verse to Jews, the book begins with a prologue and ends with a postscript. Splashed with rich repertoires of primary sources, with over a thousand bibliographic references and six notable appendices, the book stands as a testament to the author’s intellectual rigour.

Textured in their outlook, decades of jaundiced academic writings have buried a malefic nexus that sought a complete annihilation of an entire people. Under the pretence of political correctness, menacing scheming has been given a free pass. Holocaust denial is just the tip of the iceberg. Truth alone can offer redemption for historical wrongs and forewarn the world of impending threats.

The author’s evocative, undisguised style of writing adds a layer of emotion, making this treatise an engaging read. Looking forward to the sequel, I strongly recommend this book for its uncompromising, bold investigation of the complicated and turbulent past of the Middle East.

 

Pages: 550

Publisher: ‎ BLUONE INK PVT. LTD. 

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India’s Assertive Diplomacy Takes Centre Stage at Tianjin

PM Modi visited China after a gap of seven years to attend the 25^th Shanghai Cooperation Organisation (SCO) meeting at Tianjin. His participation at the SCO Summit has been more or less regular; however, the 2025 SCO Summit dominated the headlines of international media. Coming in the wake of Trump’s extortionist tariffs on India and PM Modi’s refusal to capitulate, his engagement with SCO leaders, especially with President Xi and President Putin, has stimulated outsized attention.

Cutting through the clutter of op-eds galore, it is vital to decipher the prominence of his trip to Tianjin. Miffed by India’s defiance, the MAGA extremists have especially been egregiously presumptuous about the India-China reset at Tianjin. But PM Modi’s enthusiastic presence at the SCO has several facets to it.

Restabilisation of ties with China post-Galwan clashes began in October 2024 after the complete disengagement of troops in Eastern Ladakh. At the Kazan BRICS meeting, leaders agreed to “explore a fair, reasonable and mutually acceptable solution to the boundary question”. Subsequently, India and China held the 23^rd round of talks of Special Representatives of India and China on the Boundary Question (SR) in December 2024 after a gap of five years. SR Dialogue was suspended after the Galwan clashes. The last SR Dialogue was held in New Delhi in December 2019.

During the border standoff along the LAC, discussions at the diplomatic level were conducted through the Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC) and its military counterpart Senior Highest Military Commanders Meeting (SHMC). 17 rounds of WMCC and 21 rounds of SHMC meetings took place during the entire duration of disengagement.

The latest round, the 34^th iteration of WMCC in July, “expressed satisfaction with the general prevalence of peace and tranquillity in the border areas, leading to gradual normalisation of bilateral relations”. The 24^th round SR talks in August, steered by India’s Ajit Doval and China’s Wang Yi, agreed on- “Setting up an Expert Group, under the Working Mechanism for Consultation and Coordination on India-China Border Affairs (WMCC), to explore Early Harvest in boundary delimitation in the India-China border areas”. Additionally, they announced the resumption of direct flights, facilitation of visas and trade & investment flows, expansion of Mt. Kailash Yatra and re-opening of border trade through Lipulekh Pass, Shipki La Pass and Nathu La Pass.

A cautious normalisation of ties with China is already underway. Hence, the portrayal of PM Modi and President Xi’s meeting being propelled by Trump’s trade tantrums is misplaced. However, tariff weaponisation has inadvertently catalysed a recalibration. Making no secret of the tenuous global trade landscape, at the bilateral talks, Xi said, “The world today is swept by once-in-a-century transformations. The international situation is both fluid and chaotic. China and India are two ancient civilisations in the east, we are the world’s two most populous countries, and we are also the oldest members of the Global South”.  

For more than four years, India has diligently engaged in multiple rounds of dialogue with China, aiming for a full withdrawal of troops from the friction points- Demchok and Despang. Drawing lessons from earlier missteps, India has recalibrated its diplomatic approach with greater precision. China's strategy of prolonged negotiations—often designed to wear down its adversaries—demands unwavering patience and resilience. Through patient and persevering diplomacy, India has ultimately succeeded in breaking through the impasse. Hence, Xi understands that India is not an easy pushover. Beijing only respects strength. India’s defiance and resistance to Trump’s unwarranted economic coercion is a signal not only to Washington, but to Beijing also.

Entangled in a trade war with the US, China believes that a temporary reset with India is in its best interest. Battling with poor domestic consumption, trade imbalances, an ageing population and pension liabilities, China is keen on ramping up economic engagement with India. This aligns with India’s attempts to diversify trade to offset tariff pressure and strengthen its manufacturing capabilities. Given India’s size, growth potential and expanding markets, China is forthcoming about rapprochement with India. While Washington chose not to accept this reality to its detriment, Beijing is quick to grasp this.

Post-SCO, global media is awash with pictures of bonhomie between the leaders of India, Russia and China. Finnish Prime Minister Alexander Stubb made a pointed remark, “My message, not only to my European colleagues, but especially to the United States, is that if we don't derive a more cooperative and dignified foreign policy towards Global South, the likes of India, we are going to lose this game”. The emergence of a vibrant Global South can no longer be ignored. Xi’s implicit reference to India and China as members of the Global South underscores the same.

Hinting at recalibration, PM Modi stated, “A stable relationship and cooperation between India and China and their 2.8 billion people on the basis of mutual respect, mutual interest and mutual sensitivity are necessary for the growth and development of the two countries, as well as for a multipolar world and a multi-polar Asia befitting the trends of the 21st century”. Interestingly, PM Modi’s subtle invocation of Asian solidarity for a constructive partnership finds a resonance with President Xi’s summary statement, “It is the right choice for both sides to be friends who have good neighbourly and amicable ties, partners who enable each other’s success, and to have the dragon and the elephant dance together”.

The diplomatic trope, “the dragon and the elephant dance together”, has been more flourish than reality. However, the affirmation from leaders that “the two countries were development partners and not rivals, and that their differences should not turn into disputes”. While India is willing to be a partner in reshaping Asian destiny, its discomfort with China runs deep. India treats both China’s weaponisation of strategic supplies like speciality fertilisers, rare-earth magnets, and tunnel boring machines and Trump’s tariffs and secondary sanctions with equal scepticism and distrust.

Though India is reconsidering the FDI cap and easing its position on Chinese investment in the electronic manufacturing sector to jack up production, it is equally wary of Beijing’s economic entrenchment. The unresolved border dispute, recurring standoffs, blatant violation of mutual agreements, together with Beijing’s containment policy of India, geopolitical competition in the strategic Indian Ocean Region, continue to remain persistent irritants in the relationship.

Beijing’s attempts to emerge as a reliable foreign force in South Asia through its informal tracks with Myanmar and promotion of multilaterals between Pakistan, Afghanistan, and Bangladesh haven’t escaped India’s attention. China has drawn the Maldives, Nepal, Myanmar, and Sri Lanka into the SCO and is pushing Bangladesh to join. Alongside, Beijing is also weaving an alternative to SAARC without India in the South Asian region.

China's military intelligence support to Pakistan during Operation Sindoor, along with its repeated obstruction of UN sanctions against the Resistance Force (TRF) and its veto of global terrorist designations for five Pakistani nationals at the UNSC, continues to serve as a stark warning to Indian policymakers. These actions highlight the complex web of geopolitical alignments, where India’s current decisions are shaped not just by regional concerns but by the broader strategic calculus of global power dynamics.

Trump’s untrammelled bullying is shifting the world order. Seeking self-reliance and diversification, India is expanding its engagements and recalibrating ties. However, India is redefining relationships on its own terms. PM Modi has unequivocally conveyed India’s commitment to a “multipolar world and multipolar Asia” in talks with Xi. Stealing the light at the SCO with his infectious camaraderie, PM Modi certainly earned unusual approval from the Chinese.

Good optics make for better signalling. In geopolitics, appearances are important. Body language, symbolic gestures and display of bonhomie all have a role to play. The grand display of camaraderie at Tianjin, with three leaders of the top four countries chatting and clasping hands, went beyond symbolism. The coming together of PM Modi, President Putin and President Xi sparked the notion of a potential alternate world order.

India-Russia-China cordiality has grabbed headlines with US hawk Navarro accusing India of “getting in bed with two biggest authoritarian dictators in the World: Putin and Xi Jinping”. This kind of criticism reflects a poor understanding of India’s foreign policy dynamic. Unlike the modern-day Nation-States, India is a civilisational power which builds solid relationships for the long term and from the perspective of a worldview. Impetuosity is foreign to it, and it resists making decisions in a huff. National interests have always been paramount.

India has resolutely safeguarded its interests and continues to do so. In a major diplomatic win, the SCO condemned the Pahalgam attack and backed India’s stand to bring the perpetrators to justice. Earlier, at the SCO Defence Ministers Meeting, India refused to sign a joint declaration for diluting Indian stance on terrorism and for not mentioning cross-border terrorism.

Enunciating India’s vision for SCO as Security, Connectivity and Opportunity, PM Modi stated, “We believe that every effort towards connectivity must uphold the principles of sovereignty and territorial integrity. Connectivity, that by-passes sovereignty, ultimately loses both trust and meaning”, and once again refused to endorse China’s Belt and Road Initiative (BRI).  Evidently, India refuses to make any concessions to China in pursuit of stable relations with China. This underscores the strength of India’s fiercely independent foreign policy, firmly anchored in safeguarding its core interests.

Fundamental differences exist between India and China. Beijing has to demonstrate its commitment through specific actions; grand verbosity can no longer work. The burden of sustaining this new reset is on China now. India has clear redlines and its foreign policy is rooted in its commitment to democratic values, the rule of law, and pluralism. This was clearly reflected in PM Modi’s absence at China’s military parade after the SCO Summit. Beijing sought to use the parade to mobilise national sentiment to position itself as Asia’s pre-eminent power. Indian participation would have positively legitimised China’s pursuit of domination.

The tariff war against India is an epic blunder of Trump’s foreign policy. This miscalculation allowed India and China to explore a partnership rising above differences. India has always rejected imperial tendencies and rigid groupings. Asserting independence, India is diversifying its relationships. The rubric of geopolitics is changing; the old order of alliances and kowtowing is passe. Multi-alignment and geopolitical hedging have come to dominate international relations.

India rejects the unipolarity of the US and the unilateralism of China. Amid Trump’s hardball approach, defining a clear sense of its own interests, India is affirmatively asserting its strategic multi-alignment.

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A Quantum Leap in India-Japan Strategic Engagement

PM Modi’s two-day visit to Japan to attend the 15^th Annual India-Japan summit meeting comes amid crucial geopolitical flux. At a time when President Trump seeks to upend the world order, nations are resetting their ties to cope with the looming uncertainties. Blighted by unpredictability, nations are reexploring bilateral partnerships and seeking to anchor ties based on mutual trust and respect.

Trump’s threatening tariffs and motivated secondary sanctions have propelled nations to reshape their partnership with a transformative agenda. Ending up with a short end of the stick, Japan, the US ally since World War II, responded to India's alacrity to strengthen the bilateral ties amid looming ‘Trumpian Disorder’. With close to eight decades of establishing diplomatic ties, India and Japan have a longstanding friendship and goodwill.

Amid the ever-changing dynamics of geopolitical power games, trusted partnerships have always been pillars of stability. Positively reorienting the convergence of interests and strategic outlook, India and Japan have laid down a 10-year strategic roadmap to weather the geopolitical headwinds.

Japan has been a part of India’s journey in Viksit and Atmanirbhar Bharat. Rooted in their commitment to a free and open Indo-Pacific (FOIP), upholding the rules-based order, and seeking to elevate the old friendship, leaders have taken a quantum leap in terms of enhancing cooperation. In these tumultuous times when lack of mutual respect and tolerance to sensitivities are destabilising ties, known for its discreet diplomacy of taking up differences privately, harmonising mature relationships, India and Japan have unveiled a joint statement -“Partnerships For security and prosperity of our next generation”.

Trump’s tariff fury and volatile foreign policy have raised concerns about America’s credibility in upholding the world order and its commitments to nations. Taking its brinkmanship to the next level, the US has tried to corner India. However, turning the adversity into an opportunity, PM Modi, in his address to the India-Japan Economic Forum at Tokyo, highlighted India’s transformation, asserting, “capital in India doesn’t just grow, it multiplies”, underscoring its stable economic rating.

Reinforcing Japan Bank for International Cooperation (JBIC)’s testament to India as the most ‘promising’ investment destination, PM Modi extended an invitation to Japanese businesses to India. Be it official Development Assistance (ODA), metros, manufacturing, AI, high-speed rail, urban renewal, smart cities project, India-Japan partnership reflects mutual trust. Japanese investment, though modest ($34 billion), has great strategic weight. It is aligned with India’s long-term priorities like Make in India, Digital India, Startup India, renewable energy, and advanced manufacturing. In the last two years, the Japanese private sector has announced 150 MoUs worth $13 billion with India in automotive, energy, aerospace, semiconductors and human resources.

Experiencing decades of prolonged economic stagnation emanating from the post-Plaza Accord, leading to a period of “Lost Decades”, Japan has never recovered from the asset bubble collapse. Further, economic mismanagement, demographic decline and an ageing population have exacerbated its economic woes.

The recent trade deal with the Trump administration of lower tariff slabs in exchange for an investment pledge has further left Tokyo high and dry, with Trump claiming the package as “our money to invest, as we like”. Further, surrounded by nuclear powers, in the highly contested Indo-Pacific theatre, Trump’s wavering security pledges have spurred debate among the US allies about American willingness to come to their aid in a conflict. Ahead of PM Modi’s visit Japanese trade negotiator scrapped a US trip, delaying the finalisation of $500 billion investment plan.

Once bitten, twice shy, Tokyo is also reassessing its options on economic engagement and security. PM Modi’s assurances couldn’t have been more timely. Positioning India as a ‘stabilising power’, PM Modi said, “The world is not just watching India, it is counting on India. Japan is a tech powerhouse and India is a talent powerhouse. We both agree that as two major economies and vibrant democracies, our partnership is very important not only for our two countries, but also for global peace and stability”.

Indeed, the timing of PM Modi’s visit to Japan ahead of the Shanghai Cooperation Organisation (SCO) has a strategic imperative. Amid the perception that Trump’s tariffs have pushed India into China’s lap, the annual summit meeting with Japan is a strong signal and assurance of New Delhi’s relevance in the shifting regional balance. It is a message that the India-Japan partnership will continue to remain as a counterweight to the muscular expansionism of China.

India and Japan elevated their ties to a “Special Strategic and global partnership” in 2014, and ever since, PM Modi has travelled to Japan for the annual summits eight times. With over 70 dialogue mechanisms and working groups, countries have intensely engaged with a myriad of ministries, departments, and agencies. Building on these accomplishments and leveraging respective strengths and complementarities, both sides have identified three core areas- bolstering defence and security, reinforcing economic partnership and deepening people-to-people ties.

With unsettled territorial issues with China, South Korea and Russia, Japan is facing mounting geopolitical challenges. Given its security vulnerabilities, Japan is seeking to deepen a strategic defence and security partnership with India. As a first step, to promote interoperability and synergy between defence forces and defence capabilities. Along with exploring cooperation mechanisms for defence co-production, co-development countries are planning to promote dialogue between Joint Staffs, maritime cooperation, cooperation in counterterrorism, peacekeeping operations, cyber defence and collaboration between special operations units.

 

Adopting a joint vision for the next decade, countries decided on ‘whole of nation lines’ to steer partnership through eight pillars. These are next-generation economic partnership, economic security partnership, mobility, ecological legacies, technology and innovative partnerships, next-generation health, people-to-people partnership and state-prefecture partnerships.

For credible and effective implementation of the initiatives, countries have evolved an action plan for India-Japan Human Resource Exchange and Cooperation and a Joint Declaration on security cooperation. Grappling with a severe labour shortage due to declining populations, leveraging complementarities, countries rolled out an Action Plan for talent mobility and a two-way exchange of 5,00,000 personnel, including 50,000 skilled workers over a five-year time frame under 16 categories.

Being two strong democracies in the Indo-Pacific region with converging security threats, India and Japan are natural partners. The defining speech of PM Shinzo Abe, “Confluences of Two Seas”, is credited as the guiding vision for a Free and Open Indo-Pacific (FOIP).

Despite an enduring friendship, the bilateral trade is a marginal $23 billion tilted in favour of Japan. To enhance, diversify economic cooperation and make it more forward-looking, countries are reviewing the Comprehensive Economic Partnership Agreement (CEPA) signed in 2011. Leaders have set a private investment target of JPY 10 trillion ($68 billion) spread over a decade in key sectors like semiconductors, critical minerals, defence and technology.

Recognising shared interests in safeguarding critical economic interests and factoring geopolitical realities and security configurations, countries have widely expanded the arena of cooperation.

To secure and strengthen supply chains in critical goods and sectors, countries decided to accelerate cooperation in critical and emerging technologies, telecommunications, pharmaceuticals, critical minerals, semiconductors and clean energy. This heightened priority complements the existing collective partnership for resilience on semiconductors and critical minerals, through the Quad’s Supply Chain Contingency Network and Minerals Security Partnership.

Additionally, countries are working together through the Biopharmaceutical Alliance for building reliable supply chains and the India-led Global Biofuels Alliance to realise their climate change commitments.

Elevating symbolic goodwill to practical partnership, countries have signed a raft of agreements. The enormity of the aspirations and the ambitious vision set by the leaders is truly overwhelming. The Indian and Japanese Coast Guard signed a Memorandum of Cooperation. Countries have also signed MoC in Mineral Resources, Joint Crediting Mechanism and Cultural Exchange.

Countries inked a Joint Declaration of Intent on Clean Hydrogen and Ammonia (towards net zero economy) and several MoUs - India-Japan Digital Partnership 2.0, environmental cooperation, decentralised domestic waste management, diplomats' training, next generation mobility partnership, Science & Technology (first of its kind) and extended an MoU on India Beamline at the Photon Factory, KEK for six years.

Strengthening the Lunar Polar Expedition (LUPEX), countries sealed an Implementing Arrangement between ISRO and JAXA- Japan Aerospace Exploration Agency, for a landmark collaboration on Chandrayaan 5. Both sides launched the India-Japan AI initiative, and PM Modi extended an invitation to the Japanese counterpart for the Open AI Summit held in India.

At the Annual Summit, countries launched a Track 1.5 dialogue of think-tanks to promote wider appreciation of security challenges and announced an annual dialogue of National Security Advisers (NSAs). India opened a consulate in Fukuoka with plans to establish business forums in the regions of Kansai and Kyushu to strengthen business, people-to-people and cultural linkages.

India permitted Japan, the first foreign development partner, to build infrastructure projects in India’s sensitive North East region. Trust and reliability are the bedrock of the India-Japan relationship. Synchronising India’s vision of Mutual and Holistic Advancement for Security and Growth Across Regions (MAHASAGAR) with Japan’s Economic Region Initiative of Indian Ocean and Africa, countries plan to invigorate business collaborations in South Asia and Africa. This arrangement can serve as a challenger to China’s BRI and counterbalance Beijing’s posturing as the leader of the ‘Global South’.

Alongside, to foster political trust, the State-Prefecture relationships are established between UP and Yamanashi, AP and Toyama, TN and Ehime, Gujarat and Shizuoka, with high-level exchanges between states and prefectures, including three visits in each direction, being explored. Countries also launched the India-Japan SME Forum and issued the Economic Security Factsheet outlining ongoing collaborations in strategic sectors.

The bilateral talks, which lasted for over two hours, apart from reviewing the bilateral cooperation, focused on regional and global issues. Countries expressed concerns over the situation in the East China Sea and South China Sea. They opposed unilateral action that endangers the freedom of navigation and overflight, a change in the status quo, and called for dispute resolution in accordance with the UN Convention on the Law of the Sea (UNCLOS). They condemned the Pahalgam attacks and took note of the UNSC Monitoring Report's mention of the Resistance Front (TRF), condemned nuclear aspirations of North Korea and destabilising missile testing, the worsening situation in Myanmar and urged a return to democracy. They welcomed the Israel-Iran ceasefire, expressed support for a just and lasting peace in Ukraine, and supported each other’s candidature for a seat on the UNSC. 

PM Modi concluded his trip with a visit to Tokyo Electron Factory, the leading semiconductor equipment manufacturer in Miyagi prefecture, by train, accompanied by PM Shigeru Ishiba. Later, PM Modi addressed a group of governors from prefectures.

Amidst a rapidly evolving and volatile geopolitical landscape, India and Japan are consolidating the old partnership, imparting a strategic dynamism. Infusing new vigour into the longstanding friendship, countries are gearing up to navigate global challenges together. Demonstrating a new resolve and shared commitment, countries are actively seeking new avenues to harness their complementary strengths. With a focus on unlocking the untapped potential, leaders are ushering the partnership into a new phase for tangible benefits and mutually beneficial outcomes.

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Alaska Summit: Putin Gets the Better of Trump

The Alaska Summit between President Trump and President Putin has been the major talking point for various reasons. An invitation to President Putin for direct talks ended the Western isolation that began with Moscow’s special military operation in Ukraine. More than three years into the war, which Trump has proclaimed “should have never happened”, has turned into an acid test for the much-trumpeted negotiation skills of the US president who got re-elected on the promise of ending the war ‘within 24 hours’.

Close to eight months into his inauguration, Trump failed to make a headway in the Ukrainian peace process. Worse still, barking at the wrong tree, Trump not only impaired the trade ties with India, Treasury Secretary threatened New Delhi with secondary sanctions if “things don’t go well” during talks between Putin and Trump. Hours before the scheduled summit between the two Presidents, European leaders in a virtual meeting urged the US not to strike a unilateral Ukrainian deal.

Soon, the leaders of the Coalition of the Willing also held talks with the US Vice-President JD Vance, where President Zelenskyy put forth five key ‘common principles’ to guide the negotiations. These are -nothing related to Ukraine should be discussed without Ukraine; there should be US, Russia and Ukraine trilateral; a precondition for Russian ceasefire for the peace talks to begin in all earnest; fourth, Ukraine should receive security guarantees and Moscow can’t veto Ukraine’s EU or NATO prospects and finally, Russia should face fresh sanctions if Putin refuses to ceasefire. Sufficiently briefed by the European leaders, Trump, who bluntly hinted at ‘land swapping’ initially, reprimanded Putin of “very severe consequences” in the run-up to the summit.

Trump announced a summit with Putin after his deadline for sanctions on Russia’s touted “shadow fleet” had expired on August 8^th, without facing any consequences.  With a reputation of bombastic threats culminating in a “TACO” (Trump Always Chickens Out) and episodic blusters ending in a blooper, it was hardly any surprise when Trump remarked, “it’s not a deal until done”. Trump’s call for direct talks with Putin underscores his strategic weakness as Moscow remained unflinching in the face of sanctions designed to cripple its oil trade and finances. Nor does the penalty on countries trading with Russia work in his favour. PM Modi rebuffed his threats and strongly resisted US attempts to gain access to the Indian agriculture and dairy sectors.

The Ukraine war is becoming unsustainable to the US, and in the backdrop of Russia’s continued advances into Eastern Ukraine, it is turning into a major setback for the West. As per the Institute for the Study of War, Russia has gained 2350 sq. kilometres since December 2024. Frustrated by Russian escalations and the lack of progress towards a ceasefire, Trump shortened the 50-day deadline on July 28.

Later, in response to Russia’s former President Dimitri Medvedev’s perceived “inflammatory remarks” on August 1, Trump ordered the deployment of two nuclear submarines closer to Russia. On August 4^th, far from being ruffled, Russia withdrew from the Intermediate-range Nuclear Forces (INF) Treaty, which it unilaterally upheld after the US suspended its participation in 2019.  The announcement, coinciding with the anniversary of the Hiroshima and Nagasaki bombings, cautioned of an impending “nuclear reality” replete with burgeoning nuclear risks. Trump’s lame negotiation tactics, online barbs and ultimatums have miserably failed to bring Putin to the table.

Trump’s trail of desperation became more evident as he warmly greeted Putin on the tarmac with a B-2 bomber escorted by four F-35s flying overhead and F-22s lined along the runway. The staged display of American might was responded to in full measure by Russia, by bombing Ukraine around the same time. Trump’s show of power revealed America’s insecurities and growing anxiety. 

After three hours of closed-door one-on-one talks, while Putin triumphantly walked away saying, “Next time in Moscow”, like a burdened general, Trump admitted, “We didn’t get there”. A seasoned intelligence veteran, Putin has assessed the weakness of Trump’s pompous vanity and ceded not an inch. In fact, a direct conversation with Trump has ended Russia’s diplomatic isolation and put him on an equal footing with the European leaders. Excluded from the talks, the direct stakeholders of the region’s security, Ukraine and European leaders, together with Trump’s act of rehabilitating Putin, widened transatlantic rifts.

Unquestionably hailed as “peacemaker” by minions under diplomatic duress, the summit punctured Trump’s tall claims of master dealmaker.  Trump’s ultimatums and sanction threats have, till now, failed to make peace; on the contrary, it exposed his bullying tactics. Across the board, bullies are deemed cowards. Chinese resistance to Trump’s sanctions, Putin’s defiance towards peace negotiations on US terms and India’s stark rejection of mediation claims during Operation Sindoor have underscored the futility of tariff/sanction threats.

Putin is certainly in no hurry to clinch a ceasefire agreement. While admitting that the “conversation was very frank, substantive, and, in my opinion, brings us closer to the necessary decisions. We had the opportunity, which we did, to talk about the genesis, about the causes of this crisis”, and reiterated, “It is the elimination of these root causes that should be the basis for settlement”. Ukraine is an “existential war” for Putin and “non-negotiable” for Russia. Embarking for Alaska, Trump stated that his main goal is a ceasefire, a stance echoed by Ukraine, “Our vision is a ceasefire first, and then everything else”.

However, shortly after meeting Putin, Trump wrote on social media, “It was determined by all that the best way to end the horrific war between Russia and Ukraine is to go directly to a Peace Agreement, which would end the war, and not a mere Ceasefire Agreement, which often times do not hold up.” Eyeing a long-term durable plan, Putin is steadfast about Russia’s security interests. Intractable in his approach, Putin has vowed to protect the interests of the Russian-speaking people in the occupied regions.

For long, Russia has been firm on steps for a durable peace and strongly opposed to Ukraine’s association with the EU and NATO. Putin expressed concerns about the swift militarisation of Europe and its plans to deploy peacekeepers on the ground.  This runs contrary to Trump’s short-term, Nobel Peace Prize-winning plan of huddling the stakeholders into a quick agreement. Right now, Putin is testing the waters. His first priority on the list is to negotiate the lifting of the stringent sanctions regime on Russia. Putin is here for the long haul. His calibrated, clinical plan would test the diplomatic patience of Trump.  

Humiliated, disrespected, and isolated globally, Putin has quietly endured everything from being labelled as a ‘war criminal to being accorded a red-carpet welcome on US soil’. The Alaska Summit is a turnaround of sorts for Putin, who has weathered numerous economic and geopolitical storms. Leading Russia through the thick and thin for over 25 years, Putin has mastered the craft of diplomacy, which is reduced to a social-media bluster by Trump.

For Trump, Ukraine is a “photo-opportunity move”, while the security calculus of Russia hinges on resolving the issue. Peace is not a breakthrough for Putin but inevitable for Russian sovereignty. Russia made the cardinal mistake of buying James Baker’s promise to Mikhail Gorbachev that NATO wouldn’t move “one inch to the east”. This time around, Russia would want the origins of the conflict hammered out for eternity. Peace remains elusive until the moot point is addressed. 

The Alaska Summit is just the beginning..

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India-Philippines Strategic Partnership: A Subtle Strategic Signal to China

Post-Galwan conflict, there has been a subtle but noticeable shift in India’s approach towards disputes in the SCS. In a marked departure from its balanced approach for the risk of irking China, for the first time at the 15^th EAS Summit, EAM Jaishankar remarked, “actions and incidents in the South China Sea erode trust and the ongoing negotiations on the proposed code of conduct should not be prejudicial to legitimate interests of third parties and should be fully consistent with the UN Convention on the Law of the Sea (UNCLOS)”.

Alongside playing a proactive role, since 2020, India has increased maritime deployments in the SCS to strengthen military-diplomatic ties and enhance interoperability and cooperation with ASEAN nations. At the same time, India consciously stayed away from joint patrols or Freedom of Navigation Operations (FONOPs) with the US Navy. India’s approach to the South China Sea has been guided by the Act East Policy and the Indo-Pacific vision to secure a safe regional architecture where nations can resolve disputes peacefully.

With high regard for ASEAN centrality, India has always believed that South East Asia can act as a ‘fulcrum’ connecting India and the Pacific Ocean. As expert Abhijit Singh of ORF observed, “A tendency to view the region through a prism of geopolitics and ‘balance of power' makes Indian decision makers wary of taking a stand on China’s aggressive posturing. Yet the costs of saying and doing nothing are rising for India as China’s firming grip over disputed territories in the South China Sea portends greater power projection in the Eastern Indian Ocean.” Instructively, the Chinese standoff along the LAC and increased naval presence in the IOR and Beijing’s military escalation in the West Philippines Sea brought India and the Philippines together.

Beijing’s aggressive expansionism in the SCS has made it the stormiest region in the Indo-Pacific theatre. With shared maritime concerns and Chinese aggression as the cornerstone of bilateral convergence, on PM Modi’s first state visit to the Philippines in 2017, the countries signed an MoU on defence cooperation and logistics. In 2019, countries signed an MoU on the sharing of white shipping information, and the Indian Navy joined the naval exercises with the US, Japan and Philippines for the first time in the SCS.

As Prof. Harsh Pant alludes, “the strengthening of maritime security ties between the two countries represents the highly interdependent security dynamics of the Indian Ocean and the greater South China Sea”. Close coordination between India and the Philippines is rooted in China’s “two-oceans strategy”, which aims to project greater power over Indo-Pacific. Beijing’s deepening military and economic engagements in IOR, its disruptive illegal, unreported and unregulated (IUU) in the Western Ocean Region, along with provocations close to the Western Philippines Sea, are pertinent offshoots of the same doctrine.

Apprised of Chinese adventurism and its threat to the regional security architecture, India and the Filipino Coast Guard signed an MoU on defence coordination in 2023 to intensify defence cooperation. The countries elevated the Joint Defence Cooperation Committee (JDCC) meeting to the Defence Secretary level in September 2024.

The Philippines is a country of about 7,600 islands. To effectively address China’s expansionism, Manila has unveiled the defence strategy- Comprehensive Archipelagic Defence Concept (CADC), which was operationalised in March 2024. In November, President Marcos signed the Maritime Zones Law and Archipelagic Sea Lanes Law to strengthen the government’s resolve to uphold rules-based order. A vital component of CADC is to strengthen maritime security ties with like-minded countries. Besides firming up ties with traditional partners like the US, Japan, Australia, the UK and Canada to maximise maritime security partnership with India, Manila held the first track 1 bilateral maritime dialogue in December 2024.

Catalysing the defence cooperation, which has become the most important pillar of the bilateral partnership, Filipino President Ferdinand R Marcos Jr arrived in New Delhi on August 4^th, for a five-day state visit at the invitation of PM Modi. Coinciding with his visit, navies of both countries held their first joint drill off the Philippines' Coast. Three Indian Navy vessels- INS Delhi, INS Shakti, and INS Kiltan, joined by Philippine frigates BRP Miguel Malvar and BRP Jose Rizal, conducted a two-day joint passage in the South China Sea, underscoring the growing bilateral maritime security cooperation.

The visit, the first ever by President Marcos Jr, marks 75 years of the establishment of diplomatic relations. Besides, the contemporary convergence of shared concerns, the bilateral relationship is rooted in mutual trust, respect, civilisational contacts, deep cultural bonds and shared democratic values anchored in the 1952 Treaty of Friendship. Accompanied by a delegation comprising cabinet ministers and businessmen, both leaders held delegation-level and restricted talks to review bilateral ties. Elevating the ties to a “Strategic Partnership”, leaders adopted a Plan of Action (2025-2029) to impart greater dynamism to the partnership. India is now the fifth strategic partner of the Philippines.

Hailing the partnership, PM Modi remarked, “India and the Philippines are friends by choice and partners by destiny. From the Indian Ocean to the Pacific, we are united by shared values. Ours is not just a friendship of the past, it is a promise to the future”. The bilateral ties received a massive boost with the delivery of the initial batch of BrahMos batteries to the Philippines in April 2024, positioning India as a credible defence partner. This has laid the foundation for the institutionalisation of bilateral defence mechanisms.

Keen on modernising the Philippines Armed Forces, President Marcos confirmed interest in procuring additional BrahMos missiles and other military equipment from India, a reflection of a growing regard for India's defence prowess post Operation Sindoor.

Furthering the cooperation under the MAHASAGAR (Mutual and Holistic Advancement for Security and Growth Across Regions) vision, countries have decided to collaborate and cooperate in co-development, co-production of defence products to achieve self-reliance, establish a defence R&D and supply chain ecosystem. To this end, countries signed Terms of Reference to foster tri-services staff talks and for enhanced maritime cooperation between the Indian Coast Guard and the Philippine Coast Guard. Leaders have explored opportunities for cooperation in developing submarine infrastructure, ship design and naval modernisation.

Condemning the Pahalgam attack, the Philippines expressed interest in jointly working on counterterrorism, human trafficking, money laundering, and cyberthreats. Sides have signed a treaty on mutual legal assistance and a treaty on transfer of sentenced persons between the two countries.

Injecting a strategic dimension to the Plan of Action, countries sought to develop cooperation in political, defence, maritime security, trade and investment, science and technology, connectivity, people-to-people movement, and cultural exchanges. Indian investments in the Philippines, both direct and through third countries, stand at $5 billion. To unlock economic opportunities and expand investment and bilateral trade of $3.3 billion, leaders adopted the ToR for negotiations on the Preferential Trade Agreement (PTA).

The Philippines is currently serving as India’s Country Coordinator in ASEAN (2024-27) and is going to assume the Chairmanship of ASEAN next year. This coincides with India’s BRICS Chairmanship, creating multilateral cooperation opportunities. Extending India’s full support, PM Modi called for expediting the ASEAN-India Trade in Goods Agreement (AITIGA). Endorsing India’s status as top exporter of pharmaceuticals to the Philippines, countries agreed to enhance collaboration in healthcare, pharmaceuticals, ayurveda and traditional medicine.

Being a huge importer of oil, the Philippines intends to collaborate with India in biofuels, renewables, green hydrogen and oil exploration. Manila has also invited Indian investments in developing upstream oil and gas assets and infrastructure development- Roads, Rail and Air. In response to visa-free privileges for Indian tourists by the Philippines, India extended a gratis e-tourist visa for Filipino nationals for a year.

Philippines Unique Identifier System-PhilSys uses the MOSIP platform incubated at IIIT Bengaluru. Firmed up this collaboration, countries signed an MoU on cooperation in digital technologies. Alongside, countries signed the Programme of Cooperation for 2025-28 on tourism and a Statement of Intent on cooperation on peaceful uses of outer space. India invited the Philippines to join the India Information Fusion Centre for Indian Ocean Region (IFC-IOR) and extended support to the Philippines in setting up Sovereign Data Cloud Infrastructure.

Enhancing cooperation between the ASEAN Outlook for Indo-Pacific and the Indo-Pacific Oceans Initiative for Peace (IPOI), countries reaffirmed their commitment towards upholding peace, stability and prosperity in the region. India, which considers SCS as part of the global commons, supports freedom of navigation, overflight in the region and expressed concern over coercive and aggressive actions in the region. New Delhi conveyed that the 2016 Arbitral Award, which is in tune with the obligations under the 1982 UN Convention on the Law of the Sea (UNCLOS), should be the basis for peacefully resolving disputes.  

President Marcos thanked India for permitting non-basmati rice exports to the Philippines when the country struggled with poor crop output and acknowledged India’s role as the first responder in any Humanitarian Assistance and Disaster Relief (HADR) operation. India offered to share the Gati Shakti Platform, and PM Modi talked about the Jan Aushadi system for low-cost distribution of generic medicines. PM Modi fondly recalled agritechnology cooperation between the two countries and the development of the hypoglycemic rice variety at the IRRI South Asia Regional Centre (ISARC), Varanasi, with the International Rice Research Institute in the Philippines.

Though the Philippines has a critical security alliance agreement with the US, considering Washington’s uncertain policies, Manila is preparing to act independently and diversifying its engagements for long-term security. Prioritising self-reliance, Marcos Jr, who has firmly resisted China’s military posturing, is keen on expanding and enhancing ties with India.

India’s warm embrace of the Philippines, an unmissable strategic message to Beijing, is a shot in the arm for India’s Act East Policy and Indo-Pacific vision for regional security amid shifting alliances and unpredictable global politics.

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Trump Tariffs Reignite Concerns of American Dependability

Geopolitics and global economics are deeply intertwined. A perceived assault on one segment is bound to have a ripple effect on the other. Trump announced 25% tariffs plus a penalty on India a day before the putative deadline.  Some analysts saw this coming.

Sanctions and threats have been an integral part of Trump’s coercive diplomacy. In his first tenure, President Trump signed the CAATSA (Countering America’s Adversaries Through Sanctions Act) into law in 2017 and threatened India with dire consequences if India goes ahead with the purchase of Russia’s S-400 Triumf air defence system. Despite the sanctions threat, India went ahead with the Inter-Governmental Agreement (IGA) for the procurement of S-400, signed in 2016. India managed to obtain a limited waiver in 2018.

In 2018, after unilaterally pulling out of the JCPOA, Trump reimposed sanctions on Iran and warned countries against having business ties with Tehran. Under mounting pressure, India halted oil imports from Iran in May 2019 - its second-largest crude supplier. Just two months earlier, India was forced to stop its oil supplies from Venezuela due to similar US sanctions, its third-largest oil supplier.

India thus grappled with Trump’s tertiary sanctions alongside punitive tariffs on steel, aluminium and washing machines. In a further blow, Trump 1.0 even revoked the Generalised System of Preferences (GSP) for India in June 2019, with reinstatement still pending. Notably, an economic study of Trump’s first term showed that tariffs hurt the imposing country more than its targets, with prices of intermediate products rising by 10% to 30%¹.

Back in his second term, Trump defiantly pursued tariffs as a panacea for the US’s mounting debt with a familiar refrain that “they (countries) are ripping us off”.  His Liberation Day tariff announcement shocked global markets into disarray. Unclear of the final rates while importers absorbed the initial shocks, which soon rippled through economic indicators.

A study by Yale Budget Lab noted a 1.8% increase in US consumer prices, with inflation peaking in the month of June. The concomitant burden is pegged to an average equivalent of $2400 per US household². Besides financial strain, what has triggered uncertainty is the phenomenon dubbed by critics as TACO -Trump Always Chickens Out. Characterised by deadline extensions and unpredictable tariff rollbacks, the erratic trade policy- strategically spun as ‘negotiation’- has bolstered the world's view of tariffs as tools of Trump’s coercive diplomacy.

Hit by an average of 15% US tariffs, the steepest since the 1930s, the global economy is expected to shrink by 3% as per the International Trade Centre (ITC). While the geostrategic relationship remained relatively insulated from the economic warfare in Trump 1.0, arbitrary trade levies in Trump 2.0, laced with hostility, might have a long-lasting effect on America’s strategic relationship with countries.

In a frenzied bid to dodge impending US tariffs before the Aug 1 deadline, countries like Indonesia, Japan, South Korea and the EU offered broader access for US products to their markets along with sizeable investments. Doing away with its threshold limits on rice imports, a notable red line in trade, Japan went out of its way to placate Trump, promising $550 billion investment. The EU offered to invest $600 billion in the US and purchase $750 billion worth of energy products. Similarly, South Korea agreed to invest $300 billion in the US for 15% reciprocal tariffs. Buoyed by the favourable deals, Trump announced a 25% tariff plus a penalty on India.

PM Modi was among the first leaders hosted by Trump 2.0 when both leaders ambitiously set a bilateral trade target of $500 billion by 2030 and promptly initiated trade negotiations. Playing his hand at different strategic fronts, Trump positioned himself as a peacemaker in the India-Pakistan conflict during Operation Sindoor. This intervention ran contrary to India’s hardline policy stance of ‘no third-party involvement in bilateral matters’. Trump’s untenable claims stirred bitter political dissensions in India, forcing the ruling dispensation to issue numerous clarifications on a cross-border operation that inflicted a mortal blow on Pakistan’s military and strategic apparatus.

Trump’s volte face on Pakistan is quite a story. In 2018, Trump remarked, “The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!”. Fast forward, and Trump’s hosting lunch for Pakistan’s Field Marshal Asim Munir has caught India by surprise. Recalibrating Pakistan-US ties, Munir reportedly offered the US access to mineral wealth in Balochistan. Doubling down on charm offensive, Pakistan has invested in the Trump family’s cryptocurrency firm, World Liberty Financial, towards the end of April. Indeed, pandering to Trump’s ego, Pakistan has also nominated him for the Nobel Peace Prize.

Trump’s claim to end hostilities has worked to Munir’s advantage, forcing the Pakistan government to elevate him to the Field Marshal position despite suffering a humiliating blow in Operation Sindoor. While India-US trade negotiations continued at a halting pace, India’s disapproval of Trump’s mediation had its impact, with the US President telling Apple to halt iPhone manufacturing in India. In July, he warned nations backing BRICS with a 10% extra tariff for their attempts to weaken the dollar.

Negotiating the Ukraine peace talks- a cornerstone of his poll campaign that remains unfulfilled is taking the best of him. Frustrated by stalled negotiations with Russia, wielding economic firepower, Trump warned of a staggering 100% tariffs on countries importing Russian oil, targeting China, India and Brazil.

Trump’s barrage of Truth Social posts leaves no ambiguity about his intention to unleash a full-scale ‘economic warfare’. His tirades can be zeroed into three provocative themes- first, a scathing attack on what he calls, “most strenuous and obnoxious non-monetary trade barriers”; second a brewing discomfort over India’s defence and energy purchases from Russia- “India has brought cast majority of equipment from Russia and are Russia’s largest buyer of energy along with China” and a veiled economic threat suggesting “they (India and Russia) can take down their economies together”.

Finally, in a move to upstage Modi and put the two South Asian neighbours on an equal footing, he announced a new US-Pakistan partnership: “We have just concluded a Deal with the country of Pakistan whereby Pakistan and the United States will work together on developing their massive Reserves. We are in the process of choosing an oil company that will lead this partnership. Who knows, maybe they’ll be selling Oil to India”.

Obviously, the “non-monetary trade barriers” are an apparent reference to India’s firm stance on protecting its agriculture sector, denying the entry of GM crops. Dairy has been another flash point as the classification of US dairy falls under “non-vegetarian milk”. The US termed this labelling as ‘unjustified non-trade barrier’. However, milk has religious, spiritual and cultural significance, and hence permitting US dairy products is unacceptable for India. US agricultural products can potentially disrupt India’s MSME sector involved in exports. Close to 50% of India's population depends on agriculture for their livelihood, and India has vowed to protect the interests of farmers.

Trump's repeated claims of leveraging trade deals to mediate India-Pakistan tensions revealed a disturbing pattern of coercive diplomacy and weaponisation of tariffs. In doing so, Trump has overstepped on India’s red lines – India brooks no external interference in its domestic affairs. By pitching Pakistan against India and attempting to hyphenate both, Trump earned India’s ire. Trump’s pivot to Pakistan in South Asia will have a telling impact on the US Indo-Pacific framework. Trump’s public rebuke of India’s oil imports and defence purchases from Russia has been an open assault on its strategic autonomy.

By attempting to trample on the twin non-negotiables- securing national interests and strategic autonomy- Trump has attempted to provoke India. His derogatory description of India as a “dead economy” and “we have done very little business with India” reeked of arrogance and a high-handed approach to pressurise India.

Trump’s announcement comes a day ahead of the landmark India-US collaboration on the NISAR Mission. Lest we forget, India’s rapid strides in space research are a poignant reminder of the US roadblocks which seriously derailed the satellite programme. Refusing to transfer technology, the US objected to India’s deal with Russia for the transfer of cryogenic engines and tech transfer, citing Missile Technology Control Transfer (MTCR) violations and imposed sanctions.

Simultaneously, the US crippled India’s indigenous efforts by implicating the project head, Nambi Narayan, in a false espionage case. India and the US relationship is also etched by a period of Comprehensive sanctions under the Glenn Amendment imposed by the US President post-1998, India’s Pokhran nuclear testing. However, the relationship improved after 9/11 when Washington realised the strategic convergence with India in the national security domain.

China’s emerging economic superpower rise heralded a new dawn in India-US relations. In the past 25 years, countries have diligently nurtured the partnership by expanding the arenas of cooperation. The US sees great relevance in India as a counterbalance amid China’s assertive and aggressive rise and as an indispensable partner in the Indo-Pacific region. Unfortunately, Trump’s blunt political message devoid of political nuance demonstrated a raw geopolitical muscle akin to a bully, reigniting fears of the reliability of the US partnership.

The reckless abandon and projection of power, smacking of transactionalism, will force India to not only diversify its trade and supply chains but also review its reliance on the US. Also, Trump’s cosying up to China is not lost on India. While India was forced to stop energy imports from Iran and Venezuela, China continues to buy 90% of Iranian oil. Beijing is also the largest buyer of oil from Venezuela and imports Russian crude. In June, taking to Truth Social, Trump stated, “China can now continue to purchase oil from Iran”. Trump’s posturing of China as a dove for rare earths exposes inherent contradictions in the US-China policy.

Trump’s unpredictability, coupled with bluster and blackmail, will raise more questions about America’s credibility as a mature power. On the other hand, India's resistance to US pressure will make countries begrudgingly respect Indian leadership. Unlike modern nation-states, a resilient civilisational state like India has renewed ‘Swadeshi’ push, urging citizens to embrace indigenous goods.

U.S. sanctions are expected to significantly affect India's exports of gems and jewellery, seafood, textiles, and auto components. However, India can cushion the blow through a strategic mix of domestic reforms and proactive global engagement—much like it did in the aftermath of the more severe post-Pokhran sanctions, which ultimately spurred the country’s pursuit toward self-reliance.

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