Would US-China  Rapprochement Dilute India’s Relevance?

The high-stakes meeting between the leaders of the world's two largest economies brought a collective sigh of relief as they concluded with a positive outcome in Busan. The uncertainty from the US-China trade war has affected most countries, especially Southeast Asian economies that rely on both nations. 

Though a trade agreement is yet to be signed, anxiety eased Thursday with the news that an understanding on  trade and tariffs was reached. In a typical flourish, President Donald Trump rated the talks “a 12 on 10,” but concrete details remain sparse. For now, U.S. tariffs on Chinese imports will settle  at around  47 per cent, down from the earlier 57 per cent. China will lift restrictions on rare-earth exports and resume immediate purchases of soybeans from America.  Trump is happy about this, as soybean farmers make up a large part of his MAGA voter base. Details are not yet available, as no joint statement was released at the end of the meeting. 

The meeting obviously went well with Trump telling reporters aboard Air Force One that he would be visiting China in April  next year. President Xi Jinping is also expected to travel to Washington following Trump’s trip. However, much will depend on how the situation finally pans out. With the American and Chinese economies so heavily interlinked,  both Trump and Xi, as pragmatic leaders, realise the importance of working together.

Tactical deal or strategic thaw:

The question is whether this is a tactical deal or a strategic thaw? If the trade agreement is sealed and signed, the US and China may reach a broader political agreement by the time Trump visits Beijing next year.

Reports of US Treasury Secretary Scott Bessent, hinting at a larger political framework agreement embodying both countries' vision for a peaceful and stable world, are in the works. In this context, Xi's opening remarks, praising Trump for the Gaza peace plan as well as for American input on the Thailand-Cambodia peace agreement signed in Kuala Lumpur, fall into place.  

India’s Strategic Concerns

For India, the relief over easing trade tensions comes mixed with unease. What is of concern at a time of international flux is a deeper political understanding between Washington and Beijing that could diminish India’s strategic relevance to the US. Much of the recent closeness between New Delhi and Washington has been underpinned by a shared interest in balancing China’s rise, with India cast as a strategic counterweight. Without that, India’s value in America’s strategic calculus could also diminish.

History

It is well known that successive US governments, whether Republican or Democrat, have reached out to India to checkmate China’s unrivalled growth in Asia. In India, too, both the BJP and the  Congress are invested in closer strategic ties with America. The US-India civil nuclear agreement, signed by late prime minister Manmohan Singh and President George W. Bush, led to a paradigm shift in relations between the two countries. This upward trend continued through the Obama and Biden era, right up to the  first Trump presidency.

QUAD 

With the QUAD—the grouping of the US, India, Australia, and Japan—to ensure a free and open Indo-Pacific, the strategic move to contain China was put in place. The QUAD helped raise India’s international profile. An earlier version of the Quadrilateral Security Dialogue (QUAD) in 2007-2008 fizzled out following strong opposition from China, and Australia withdrew after Kevin Rudd came to power. Rudd was close to the Chinese and felt that Australia’s economic benefits from trade with China outweighed other considerations.  Soon afterwards, Shinzo Abe, the driving force behind QUAD, was ousted from power, and the engagement ended.

It was resurrected in 2017, when Shinzo Abe came back to power. India’s Modi, Australia’s Malcolm Turnbull and the US during the first Trump tenure were strong backers of QUAD.

After Biden’s last QUAD summit in Washington, not much is being heard of the grouping. Unlike in the past, there has been little mention of QUAD since Trump returned to the White House. India was scheduled to hold a QUAD summit before the year-end, but that is hardly likely at the moment. 

“Trump will downplay Quad as part of his outreach to China, where he plans to go in April. The utility of the Quad card is declining with the downturn in US-India relations. “India cannot trust Trump either,’’ says Kanwal Sibal, former foreign secretary. 

Friction Points Now

Though Prime Minister Narendra Modi was among the first foreign leaders to meet Donald Trump after his second inauguration, ties between the two countries have taken a major hit. Trump hit India with 50 per cent tariffs, and scolded New Delhi for buying Russian oil. Moreover, Donald Trump's overture to Pakistan is also an irritant for India.

There   is a fresh attempt now to repair ties.  Work on getting the framework for  a bilateral trade agreement ready by year's end is on. A US team is likely to visit India soon  for the negotiations. But tongues have begun wagging over US overtures to China and where that would leave India.

India is hedging its bet.

The Modi government, too, is not taking chances and has hedged its bets by keeping a toe hold in all camps. The PM's visit to China for the Shanghai Cooperation Organisation (SCO) summit, where Xi, Russia’s Vladimir Putin and Modi were photographed laughing and talking together, was a subtle message and an eye-opener for Washington.

“US-China ties will remain stressed. The anti-China mood in the US is strong and widespread. China will extract  the maximum  from Trump’s vanity-driven foreign policy and yield the minimum necessary in return. Trump cannot be trusted. China would have noted how he has kept reversing his positions on talks with Russia on Ukraine. They are aware Trump seeks to divide Russia and China if he can,’’ says Sibal.