IN the shifting sands of contemporary global economy, India is apparently in trouble. The trouble is most palpable in the sphere of foreign policy and diplomacy. It is worthwhile to understand that in the present times diplomacy and foreign policy are more intractably linked to questions of economy. In India, where the narrative is woven by the government, its corporate backers and the corporate mainstream media, amplifying that to an infinite level of decibels, the entire effort appears to have become the prisoner of its own spin.
This was most pronounced in the wake of the confrontation with Pakistan following the Pahalgam terror attack. India’s response and subsequent withdrawal was hijacked by no less than Donald Trump. Ahead of the announcement of cessation of hostility and military actions, the US President announced that it is going to happen. Not only that, to further rub salt on the injury, the US President also claimed credit for having facilitated the termination of hostility. Trump also claimed that this was achieved due to his threat on the question of trade with the US. There is no doubt that this put the Modi government under tremendous stress within the country, given the longstanding cardinal rule that for bilateral dispute settlement, particularly with Pakistan, third party mediation was a ‘no go’.
This was particularly damning for the government because when Trump assumed office for the second term Modi had built his reputation as a strong leader by marketing the idea that he was extremely close to Trump and his ‘close embraces’ were flaunted as a source of diplomatic power. This was notwithstanding the forewarning of several influential foreign policy mandarins in Washington that it was dangerous to be adversarial to the US and that those ‘bear hugs’ could prove to be fatal. But the Modi government and the Prime Minister showed nonchalance. Thereafter, Trump has proved to be unrelenting in embarrassing the present Indian dispensation. This was evident from the slapping of 50 per cent additional tariff in Trump’s new ‘tariff terror’ for having become a major buyer of Russian oil which was far cheaper to that from West Asia or the US. The US went to the extent of charging that India was responsible for the Russian campaign against Ukraine by funding its war economy through such oil purchases.
It was amply clear that the ‘tariff terror’ by the Trump administration went far beyond issues of economics. It is in fact weaponisation of tariff to pursue geopolitical goals. The slapping of 50 per cent additional tariff on Brazil was for pursuing legal cases against erstwhile rightwing President, Jair Bolsonaro. It is also well recorded that the war in Ukraine is the result of Europe’s attempt to undermine Russian security, fully supported by US led NATO.
With all these unilateral aggressive moves Trump led the US has managed to force consolidation of BRICS which has now become BRICS Plus. BRICS’ expansion is actually shifting global trade with South-South corridors and emerging markets. Currency diversification among BRICS nations adds complexity to logistics, requiring shipping companies to manage contracts, payments and hedging in multiple currencies beyond the US Dollar. Infrastructure investments in Africa, Latin America and the West Asia are reshaping supply chains, challenging US influence and forcing carriers to adopt new trade routes. The expansion of BRICS is not just a geopolitical development; it has the potential to challenge US driven unipolarity in the global economy. The BRICS’ share of world output is currently 35 per cent while the G7’s is down to about 28 per cent, a clear testimony of shifting grounds.
The latest development of slapping sanctions on two Russian oil companies has aggravated the situation. Though the Indian establishment has not come out with anything specific about the claim that Donald Trump is making that Prime Minister Modi had, in his telephonic conversation, confirmed that India will stop buying oil from Russia, comments from some unnamed government officials as well as those from Ambani’s Reliance, indicate that it is a moment of acute stress. This is for both, the Indian private sector refineries having access to crude as well as the Indian public sector companies and the overall retail price of petroleum products. The heat is on the Indian agriculture sector as well, particularly food grains and dairy products.
We cannot specifically say at this stage what would finally transpire, but the fact is that both the US and China have finally come out with a framework, with US treasury secretary Scott Bessent conceding that the question of imposing an additional 100 per cent tariff ‘has gone away’. Chinese Vice Premier He Lifeng has also claimed that the negotiations between the US and China in the run up to the Trump-Xi summit should look for “mutual benefit and win-win results”.
In the interregnum, there has been a major discourse on how China has prepared well to face the hegemonistic aggression of the US in trade and tariff matters. The fact that China is lessening its dependence and strengthening its autonomy with stunning success in production of rare earth and kits for global defence and semiconductor products is well recorded. It is abundantly clear that China’s critical advance in several frontier areas of technology is for real and not fiction. They have prepared well with a long-term vision to strengthen China’s strategic autonomy in the global economy. The BRICS process getting consolidated, largely due to US intransigence and unilateralism, has been a further shot in the arm.
Therefore, while we wait for the final outcome of the Indo-US trade deal which will obviously be loaded against the Indian people, we must take upon ourselves and all those who cherish our sovereignty, to oppose not just Trump’s ‘tariff terrorism’ and unilateral pressures, but also our own government’s capitulation. The government has largely become a victim of its Prime Minister’s personalised style of diplomacy to create the illusion that in diplomacy and foreign policy, the strength of personalities prevails. The danger of putting all our eggs in the US driven basket is indeed proving to be fatal! That will be an anachronism in the increasingly multipolar landscape of the global economy.
(October 29, 2025)
