AS the US-India relationship takes a dramatic nosedive, significant developments are unfolding at both regional and international levels.
New Delhi has been caught off guard by the sudden imposition of a 25 percent tariff on Indian goods starting Friday, along with unspecified penalties of the same rate on oil imports from Russia, while President Trump has even extended a better trade offer to India’s arch-rival, Pakistan. New type of US geopolitics/geo-economics geared by whimsical trade and tariffs war has eroded political comfort, geopolitical trust and geo-strategic cooperation between the US and India. It is a direct clash between economic hegemony and strategic autonomy. It seems to be a strategic opening for Pakistan and China to further streamline their ties in diverse sectors of economy, investment, industrial cooperation, CPEC and geopolitical & geo-strategic maneuverings especially in South Asia and South East Asia regions.
For Pakistan chances are now brighter for the further strengthening of bilateral relations and seeking more and more economic concessions from the White House. The most recent visit of Iranian President Masoud Pezeshkian to Pakistan comes at a critical time and reflects a careful effort to strengthen relations with Islamabad amid a rapidly changing geopolitical landscape. Moreover, the policy makers of Pakistan and military establishment now have the golden chance to encircle India through its backyard by further consolidating regional alliances with Bangladesh, Sri Lanka, Nepal and Maldives. Expected re-visit of Field Marshal General Asim Munir Marshal to Washington DC is depressing India designs and shaking its regional status.
Indian media is continuously speculating about the recent visit of Field Marshal General Asim Munir to Beijing and termed it anti-India which is untrue and false. Nevertheless, it would further strengthen military ties and strategic cooperation between two ironclad brothers. Some security experts in Islamabad are of the view that emerging geopolitical and geo-economics equations and regional readjustments may propel the Indian fanatic government to launch Operation Sindoor 2 in the near future. Speculative red alert and constant patrolling of the Pakistan Air force in the skies vividly reflecting Indian hidden agenda and perilous designs against Pakistan. In case of China, it is an ideal time to re-focus on the re-formation of 1+1+1 strategic partnership i.e. China-Russia-India to further balancing and encountering the US hegemonic designs in South Asia and South-East Asia. Hence a multipolar world grounded in mutual respect, shared benefits win-win cooperation would be the way forward for all. Hopefully, China-Russia-India cooperation not only protects the respective interests of three countries, but also facilitates the establishment of peace, security, stability and progress in the region and in the world. Apparently, China stands ready to maintain communication with Russia and India on advancing trilateral cooperation.
Indian nationalist industrialists and economic strategists termed it an economic betrayal posing numerous socio-economic, industrial and exports threats to Indian GDP reducing it 0.2 percent from earlier estimations of 6.5 to 6.3 percent. The Indian external ministry dubbed it unfair, unjustified and unreasonable; however, the moment India fails to meet US’ strategic expectations, it instantly becomes expendable. Thus the strategic matching box has now been broken and the US-India ties have reached to diminishing return.
Indian joining BRICS and the SCO has further strengthened its regional as well as international geopolitical manipulations calling for a multipolar world, However, its engagement in zero-sum security cooperation with the US, Japan and Australia in the Indo-Pacific showing the real face of its foreign policy and military preference against China. After five rounds of trade negotiations, Indian officials were so confident of securing a favourable deal with the United States that they even signalled to the media that tariffs could be capped at 15 per cent.
Indian officials expected President Donald Trump to announce the deal weeks before the August 1 deadline, but the announcement never came. Political misjudgment, missed signals and bitterness broke down talks between the world’s biggest and fifth-largest economies, despite bilateral trade worth over US$190 billion. To bridge the $47bn goods trade gap, India pledged to buy $25bn in US energy and boost defence imports, but reluctance to further open its market to US agricultural products stalled the agreement. Washington now appears to be targeting New Delhi’s close ties with Moscow to punish India while containing Russia.
In summary, President Donald Trump has issued an executive order imposing an additional 25 percent tariff on Indian goods as a penalty for importing Russian oil, among the highest for any trading partner. While only around 20 percent of India’s goods exports—or 2 percent of GDP—are US-bound, sectors worth US$8 billion, including gems and jewellery, apparel, textiles, chemicals and marine products, are highly exposed. The tariffs, deemed growth negative, triggered a sharp fall in Indian stock markets, while the opposition Congress party condemned them as a collapse of foreign policy and the end of economic cooperation with the US.
Though India’s economy is more domestically oriented than many Asian peers, the decision could prompt monetary policy easing and deeper rate cuts to support growth. Ultimately, the erosion of India’s status as a strategic US ally and concessional entity in the international system, swinging between Washington and Moscow, has reached a declining curve, opening new avenues of cooperation for regional countries.
—The writer is President: The Centre for Knowledge & Public Policy (CKPP), Lahore.
