New Delhi, Aug. 26 -- The US President Donald Trump has found a scapegoat, in India, for his failure to convince Vladimir Putin to end the Russia-Ukraine war. On Monday (August 18), White House trade adviser Peter Navarro accused India of financing Russia's war in Ukraine. As the largest purchaser of Russian oil, China imported a record 109 million tonnes of this product last year, representing nearly 20 per cent of its total energy imports, Chinese customs data showed. India, by contrast, imported 88 million tonnes of Russian oil in 2024. Again on Tuesday (August 19), White House Press Secretary said that US President Donald Trump has imposed sanctions on India to bring an end to the Russia-Ukraine war. Earlier, US Treasury Secretary Scott Bessent on Tuesday (August 19) accused India of "profiteering" by reselling Russian oil while sparing China for the same, saying it has "diversified inputs of their oil." China's oil imports from Russia have increased only 3 per cent post the Russia-Ukraine war, while India's oil imports from Russia have increased over 40 per cent. "They've made USD 16 billion in excess profits - some of the richest families in India", Bessent alleged. In August China has nearly doubled its import of Russian crude capitalising on reduced shipments that India has halted amid rising pressure from US trade tariffs.
Times of India has reported that the Russia's embassy slammed US President Donald Trump's 25 per cent additional tariffs on India for its procurement of Russian crude. According to a Reuters report, the Russian embassy said, "If Indian goods cannot go to the US market, they can head to Russia".
Trump imposed tariffs totalling 50 per cent on India which includes 25 per cent for New Delhi's purchases of Russian oil that will come into effect from August 27. Now Indian exports, worth USD 48.2 bn, face a 50 per cent tariff. Compared to this, the US tariff on Chinese imports is 30 per cent. Trump has given China an easier ride than India as numerous US industries are heavily reliant on Chinese minerals. Supply of Chinese 'rare earth' minerals remains a central issue in ongoing trade talks. The US Administration is keen to avoid a tariff spike as US retailers stock up on inventories of Chinese goods ahead of December's Christmas holiday season.
The much trumpeted India-US Bilateral Trade Agreement (BTA), announced during Prime Minister Narendra Modi's Washington visit in February this year when the US president was at his aggressive worst on 'Tariff War' to 'Make America Great Again' (MAGA), is in trouble. US-India trade talks scheduled for August are called off, reports Reuters.
The USA economy no longer relies on India for any critical imports. The demand for the cheap and brilliant knowledge workers of India who have contributed immensely to the development of the American software industry, during the last three decades, has been reduced substantially after the invention of AI. The recent layoff of Indian employees in Oracle is a case in point. Oracle, one of the world's biggest software companies, has let go of a large number of employees in India, with nearly 10 per cent of its local workforce affected. The move comes at a time when the company has secured a major deal with OpenAI and held high-level talks with US President Donald Trump Just a few days before the job cuts were announced. The agenda included domestic hiring, national data security, and technology partnerships. Analysts believe that the company is re-aligning resources towards the US market in line with Trump's push to reduce offshoring and H-1B visa reliance, reports India Today. Speaking at the AI Summit in Washington, held in July, the US President Donald Trump has criticised American technology companies like Google, Microsoft and Apple for hiring workers from India and outsourcing manufacturing to China. He urged them to focus on creating jobs for Americans. The USA habitually ditches its collaborators after its purpose is served.
Advantage China
After being betrayed by his 'Dear Friend Trump', the Indian Prime Minister has turned to Chinese President Xi Jinping who visited India six years ago for an informal meeting with India's Prime Minister Narendra Modi in November 2019. Two months before, in September, Modi participated, along with the US President Donald Trump, in a community summit and mega event Howdy Modi, which was held on September 22, 2019, at the NRG Stadium in Houston. Organised by the Texas India Forum, the event celebrated Modi's decisive win, for the second time, in the general election and highlighted the strong cultural and economic bonds between India and the United States. After his return from Houston, India's foreign policy witnessed a major shift away from China.
In November 2019, India decided to withdraw from the China initiated Regional Comprehensive Economic Partnership (RCEP) trade agreement. India has refused to be a member of the Chinese Belt and Bridge Initiative (BRI). BRI, also referred to as the New Silk Road, is a global infrastructure development strategy adopted by the Government of China in 2013. By May 2025, the number of countries that joined the Belt and Road Initiative (BRI) by signing a Memorandum of Understanding (MoU) with China and have not exited the BRI was 150.
Modi made quite a few visits to China as the Chief Minister (CM) of Gujarat. It may be recalled that Modi was not granted US Visa till 2014 due to his alleged failure as the CM to protect hundreds of religious minorities during Gujarat riots in 2022. Till the Indo-China face-off at Ladakh in 2020, Indian Prime Minister Modi had visited China nine times-five times as PM and four times as CM. After Modi's election victory in 2019, Indian foreign policy veered towards USA led G7 countries. Remarkably, during the same period, India's reliance on Chinese imports have increased substantially. President Donald Trump's latest trade war may be pushing India and China into a wary but tactical embrace, observes CNN.
The Chinese Foreign Minister Wang Yi made an official visit to India on August 18 for the 24th round of border talks with NSA Ajit Doval in Delhi. His visit comes ahead of Prime Minister Modi's planned trip to China to attend the annual Shanghai Cooperation Organisation (SCO) summit to be held in Tianjin on Aug 31 and September 1, 2025. Wang Yi visited Kabul on Wednesday to meet his counterparts from Afghanistan and Pakistan. The Kabul meeting focussed on counterterrorism efforts and extending the China-Pakistan Economic Corridor (CPEC) - a project under China's flagship Belt and Road Initiative - to Afghanistan.
While in India, Chinese foreign minister Wang Yi met with his Indian Counterpart S Jaishankar, and said both nations should expand cooperation amid "overwhelming bullying" and severe challenges to free trade. Speaking at the 24th meeting between the Special Representatives on the India-China boundary question, Wang indirectly referred to the negative impact of the 2020 Galwan clashes and said, the "setbacks" of the recent past did not advance the "interest of the people" of both countries, reports The Hindu. Wang Yi conveyed a message and formal invitation from Chinese President Xi Jinping for Modi to attend the SCO Summit in Tianjin when he met the Indian Prime Minister on Tuesday. PM Modi accepted the invitation, confirming his attendance and expressing support for China's presidency of the Summit. The Indian Prime Minister's participation in the SCO Summit after the India-Pakistan war and Israel Iran war assume significance as both Pakistan and Iran are important members of SCO.
Improvement in the India China political relation will have a major impact on the economy and geopolitics of South and Central Asia. To minimise the huge trade imbalance with China (over USD 100 billion), Indo-China Joint ventures with transfer of appropriate technology in specific import dependent industries will generate huge employment opportunities and turn the entire South Asian region into a major industrial hub which will complement the current manufacturing activities of China. Economic and geo-strategic cooperation will Make Asia Great Again (MAGA).
The writer is a professor of Business Administration who primarily writes on political economy, global trade, and sustainable development. Views expressed are personal
Published by HT Digital Content Services with permission from Millennium Post.