Although much has been made of what the United States and U.S. President Trump are doing, it is critical for India (and the world) to dissect the raison d’être behind the disruptions being imposed on them today. The economic, geopolitical and technological polycrisis necessitates a strategic recalibration, to insulate ourselves and to forge a more equitable world order.
Mr. Trump’s economic warfare is motivated by three imperatives. First, he is consciously pandering to America’s silent majority (and not just the ‘Make America Great Again’ Republicans) which feels shortchanged by globalisation’s nucleus, namely capital accumulation, cheap labour, the environment’s colonisation and trickle-down economics. This neo-liberal status quo has caused an unprecedented concentration of wealth and power on the one hand, and mushrooming inequalities on the other. Instead of comprehensively restructuring economic paradigms and thereby redressing legitimate grievances (which the Global South also feels acutely), he has unleashed xenophobic, racist and centrifugal politics, veneered by economic populism.
Trump’s motivations
Domestic politics partly explains why Mr. Trump hawkishly vilifies the liberal international order as antithetical to American interests. This has translated into sanctions on 30-plus nations and tariffs on nearly 70 (impairing the free movement of goods and ideas), the forging of trade blocs, the undermining of transnational organisations and treaties , circumscribing of foreign aid to vulnerable nations (reversing solidarity commitments dating back to the First World War) and a crackdown against immigration (impeding the free movement of labour). This 360° attack on the norms and institutions of the liberal world order is just a fig-leaf for the ruthless pursuit of sovereign self-interest.
Second, sidestepping that the tariffs are a camouflaged super-tax on American companies and consumers (who will collectively absorb 70% of tariffs costs, according to Goldman Sachs), they are designed to bolster America’s economic strength by extorting nations and companies. Even though America accounts for 26% of global GDP, China, at 17%, is fast catching up (and nearly on a par with the other G-7 members, which collectively account for 20%-22% of global GDP). This is why America continues to heavily subsidise agricultural production, deepens unilateralist industrial, technology and climate change policies, bludgeons nations into making investment commitments, and strives to retrench the dollar’s privileged position (including circumscribing global-currency alternatives). This coercive statecraft has historical precedent, with protectionism and punitive mercantile capitalism being leveraged to bolster economies and force sovereign nations to open markets. This hypocrisy continues and is exemplified in America pressuring India to eschew protections for the agricultural sector, while it imposes tariff walls of 350% on tobacco products, 200% on dairy products and 120% on fruits. India’s textiles, jewellery and gems, auto components and metals sectors are being severely impacted by these discriminatory tariffs. Clearly, old (imperial) habits die hard.
Third, even though tariff-weaponisation is singularly Trumpian, reversing America’s perceived deindustrialisation and checking China’s ascendance has bipartisan support. The escalating tariffs against India were purportedly designed to pressurise Russia to end the war with Ukraine (one of Mr. Trump’s key election promises). However, despite the U.S.-Russia meeting on Ukraine, penalties against India continue (perhaps as leverage against nations pursuing multipolarity). Irrespective of when Mr. Trump can claim “peace in our time”, his attention will inevitably shift to what America sees as its biggest challenge to a unipolar world — the China theatre. It is no coincidence that the tariffs also included provisions to check China’s strategic influence while furthering American national security goals (as an investigation by The Washington Post on the U.S.’s “supplemental negotiation objectives” action memo reveals).
What New Delhi must do
These upheavals hold multiple lessons for India. Its response to the epistemic polycrisis the world faces today has to address both the substantive and the symbolic. For example, the unstated assumption that Washington sees India as a democratic counterweight to China needs to be seriously re-examined. India needs to ask the degree of geopolitical convergence it has with America given that the U.S. has renewed its vows to Pakistan (possibly to retain an inside track with China), is trying to re-hyphenate India and Pakistan, may skip the Quad Summit that India will host later this year, and inhibits American companies manufacturing in India and having advanced technology collaboration. Mr. Trump’s actions have disrupted the India-U.S. partnership built painstakingly over 25 years, compelling the Bharatiya Janata Party (BJP) government to make major concessions to China to avoid a two-front problem (without any reciprocal concessions). America needs to accept that India’s northern borders are live fault-lines. While India must defend its territorial integrity vigorously, for now, India must manage competition, avoid conflicts and substantively strengthen itself.
Second, the government must confront Mr. Trump more aggressively in the pursuit of India’s national interest. It is no coincidence that America has not levied tariffs on China, even though their bilateral trade deficit is $295 billion, while China imports oil from Russia and trades with Iran. This is partly because of Chinese restrictions on rare metals and magnets, which are critical to the U.S.’s defence and technology sectors. In contrast, the BJP government complied twice to American diktats, stopping oil imports from Iran and Venezuela and temporarily waiving the 11% import duty on cotton. The BJP would do well to learn that bullies only respond to strength. Third, Prime Minister Narendra Modi’s foreign policy adventurism (personalised diplomacy, manufactured diaspora events, and click-bait acronyms) have not furthered India’s strategic interests and must be immediately re-calibrated. For example, the government and right-wing diaspora outfits tried in vain to ingratiate themselves to Republican legislators and right-wing influencers/lobbyists close to Mr. Trump. Likewise, BJP Ministers misread American support by myopically conflating India’s economic size with strategic utility. And, equally problematically, the BJP partially eschewed non-alignment (now globally feted as multi-alignment) and sacrificed India’s material interests for a symbolic seat at the high table. Sadly, the Modi-doctrine has bound China and Pakistan in an “iron-clad alliance” (creating a unified threat to India’s northern flank), isolated India in its neighbourhood, put India’s wealth-creators in the cross hairs of punishing tariffs, and subject American-Indians to virulent racism.
India must capitalise on disruptions
India must leverage this polycrisis to reshape the world’s geo-economic and political architecture. This window could narrow after America’s mid-term elections next year. Therefore, India must champion multipolarity as an alternative to both unipolarity and bipolarity. India can also capitalise on this opportunity to forge a New Economic Deal that works equitably for all nations. After all, neoliberal globalisation has not worked well, especially for those in the Global South. This has been compounded by weak and imbalanced multilateral institutions, an extreme concentration of global power and wealth in the hands of a few in the Global North, the forced reduction of taxes and high levels of sovereign debt (leading to reduced government revenues, a scaling back of state-driven functions, and limited fiscal space to invest in national developmental goals).
But to do this effectively, the government must urgently redress India’s structural problems. Manufacturing is at a four-decade low, unemployment is unacceptably high, private investment is stagnant, scientific research is abysmal and public sector units are still not being re-deployed strategically (such as China’s State-Owned Enterprise). The government must make concerted efforts to restore trust in economic stakeholders, spearhead policies that ensure equitable growth (without which India will not appear as an attractive market to investors), and a bold new vision.
This necessitates eschewing transactional instrumentalities, and investing time in forging relationships with multiple stakeholders within and outside government. It also means making constructive efforts to forge a bipartisan consensus both domestically and with the Global South. To expedite the realisation of India’s manifest destiny, the government must shed its partisan blinkers, reach across the aisle, and lead a unified approach in the national interest.
Salman Khurshid is India’s former External Affairs Minister. Pushparaj Deshpande is Director, Samruddha Bharat Foundation
Published – September 05, 2025 12:16 am IST