India, Nov. 4 -- At their summit in Korea last week, Donald Trump and Xi Jinping declared a one-year truce in their trade war. Markets rallied, commodity prices steadied, and business lobbies exhaled.

But the truce also set off quiet unease, especially in New Delhi. India had been hoping that the hostility between the US and China would create space for a deeper trade partnership with Washington. Now, with the G2 choosing detente over confrontation, at least temporarily, the strategic and economic calculus has shifted.

China could afford to fight back. When Washington raised tariffs, Beijing retaliated. When the US restricted semiconductor exports, China struck back by curbing rare-earth exports critical for American manufacturing and d...