Cover Story: Why Modi Won’t Play Cowboys and Indians With Trump, Opting Instead for Strategic Autonomy

By Hu Xuan, Lu Chen and Denise Jia

When Narendra Modi, India’s prime minister, posed for a photo with Russian President Vladimir Putin at the Shanghai Cooperation Organization summit in Tianjin on Sept. 1, the gesture spoke louder than any speech.

The image — Modi and Putin, shoulder to shoulder — reverberated across global media far beyond its ceremonial significance. It came at a moment when India’s relationship with its longtime partner, the United States, was visibly fraying.

Just days earlier, Washington had imposed a fresh round of 25% tariffs on Indian exports, in retaliation for India’s alleged indirect imports of Russian oil. That effectively raised tariffs on Indian goods to 50% — higher than those on Chinese or even Russian imports.

The abrupt collapse of U.S.-India trade talks in July had already strained ties; the tariffs pushed them into open hostility.

India, once a linchpin in the U.S. Indo-Pacific strategy, appeared to be recalibrating. Modi’s appearance at a China-hosted summit beside Putin sent a pointed message. The summit’s agenda had little to do with the U.S., but Modi’s timing — and visibility — carried diplomatic significance.

Modi did little to quiet the speculation. At the summit, he declared India and China to be “partners, not rivals,” emphasizing their shared global responsibilities. In a volatile economic era, he said, their cooperation was not just beneficial but essential.

The message appeared to land. On Sept. 9, U.S. President Donald Trump broke his silence, announcing the resumption of trade talks and calling Modi “a great friend.” Modi responded in kind, praising the U.S.-India ties and promising a resumption of talks. But the broader message was clear: India was no longer playing solely in Washington’s court.

Trade talks turn sour

The unraveling of U.S.-India trade negotiations was the first visible crack in what once appeared to be a strengthening economic partnership.

Back in February, not long after Trump returned to the White House, Modi paid an early visit to Washington. The two leaders pledged to finalize a bilateral trade deal by the fall of 2025, with a lofty goal of doubling annual trade volume to $500 billion by 2030. Yet by April, the optimism began to fade.

On April 2, the U.S. imposed 26% tariffs on India — higher than on Japan or South Korea. Still, Trump spoke of progress, and Treasury Secretary Scott Bessent said a deal was “very close.”

By June, both sides again sounded upbeat. Trump teased a “very major” agreement; while Nirmala Sitharaman, India’s finance minister, said an early deal would be a boost to India’s 2047 development goals.

Then came the collapse.

Just two weeks later, Trump abruptly imposed another 25% tariff, accusing India of trade barriers and a large deficit. He warned of “punitive consequences” for buying Russian oil. On Aug. 6, a new order formalized the tariffs — now amounting to 50%.

India hit back framing energy choices as driven by “market realities and national interests.” Modi reaffirmed his “Make in India” push, signaling defiance.

China weighed in. On Aug. 22, Beijing’s ambassador to India denounced the tariffs as “bullying” and pledged China would “stand with India” in defending the multilateral trading system under the World Trade Organization (WTO).

Meanwhile, behind closed doors, trade talks had already stalled. After a promising fifth round of negotiations in July, progress ground to a halt. Reuters reported the two sides had reached a technical draft deal: India would lower tariffs on U.S. goods and increase energy and defense imports, while the U.S. drop demands for farm and dairy access.

But that red line proved immovable.

By late summer, U.S. negotiators were becoming frustrated with India’s refusal to open its agricultural sector — particularly in light of its high duties on apples, walnuts, raisins, poultry and processed foods. While Indian imports of U.S. agricultural goods had jumped nearly 50% in the first half of 2025, New Delhi made clear it would not risk the livelihoods of the more than 40% of its workforce engaged in farming.

“Farm and dairy have always been major red lines for us,” Sitharaman told Indian newspaper Financial Express in August. Piyush Goyal, India’s trade minister, emphasized that the government remained committed to “protecting and empowering farmers and small businesses.” Modi himself declared safeguarding jobs his top priority.

Washinton was unmoved. India sought a rollback of 10% U.S. tariffs on its goods and pushed for lower duties on steel, aluminum and cars. Washington balked — and the talks broke down.

Adding to the friction, Trump didn’t call Modi as the talks unraveled — reportedly due to Modi’s reluctance. Trump’s outreach to Pakistan also rankled New Delhi. Meanwhile, Trump struck deals with Japan, Indonesia and the European Union, highlighting India’s growing isolation.

Trade tensions between Washington and New Delhi are unfolding against the backdrop of deep interdependence. In 2024, U.S.-India trade totaled $128.8 billion with a $45.8 billion deficit. By July 2025, the gap was $40 billion. Indian officials feared that tariffs would harm labor-intensive sectors and investor confidence.

Despite the tension, analysts suggest a negotiated path forward remains viable, potentially by late fall. India may offer concessions on agricultural market access — a long-standing U.S. demand. But these moves come with domestic risks. As Fudan University’s researcher Xie Chao pointed out, Modi would need the U.S. to allow symbolic protections to save face, as any perception of sacrificing farmers’ interests could spark a political backlash at home. Delhi University’s Rityusha Tiwary echoed the warning: zero-tariff access for U.S. farm goods would inflame discontent among both producers and consumers who rely on domestic staples.

Meanwhile, Indian exporters are already feeling the sting. Shiv Nadar University’s researcher Anand P. Krishnan warned that textiles, jewelry, steel, aluminum and fisheries are vulnerable to prolonged tariff pressure. While these sectors may adapt in the medium term, the immediate pain is real. Talks may not solve everything but both sides are increasingly seeing negotiations as unavoidable.

A shaky foundation

The cracks in U.S.-India trade ties didn’t appear overnight. Back in September 2019, Trump, then in his first term, and Modi put on a carefully choreographed display of camaraderie at Houston’s NRG Stadium. In front of a crowd of 50,000, Trump held Modi’s hand aloft, calling him “one of America’s greatest, most devoted, and most loyal friends.” Modi returned the praise, calling Trump warm, vibrant, and wise — a “true friend” of India.

That stadium rally marked the peak of first-term warmth in U.S.-India relations. During both Trump’s first administration and the early years of President Biden’s, India was elevated as a key partner in America’s Indo-Pacific strategy — central to the “Quad” with alongside Japan and Australia. The two countries upgraded ties to a “Comprehensive Global Strategic Partnership” in 2020, signaling deepening alignment on security and geoeconomic matters, especially as Washington looked to counterbalance China.

Yet even at the height of the bromance, economic tensions were simmering. In June 2019, Trump revoked India’s preferential trade status under the U.S. Generalized System of Preferences, ending tariff-free access for $5.6 billion worth of Indian goods. He accused New Delhi of failing to provide “equitable and reasonable” market access. India retaliated with tariffs on 28 American products — including almonds, apples and walnuts — foreshadowing the brinkmanship to come.

“The turning point in U.S.-India ties wasn’t sudden,” said Xie at Fudan University. “It was visible in Trump’s first term: he courted India strategically but clamped down economically.” Biden shifted course by downplaying trade imbalances and wooing India with broader cooperation. Still, the relationship has remained fragile — especially after the Ukraine war broke out.

Washington’s efforts to pressure New Delhi over its ties with Moscow yielded little. India refused to denounce Russia, citing a long-standing “special and privileged strategic partnership,” and continued its energy trade with Moscow. As the Biden administration later rekindled military cooperation with Pakistan and criticized India over human rights, the mood in New Delhi cooled.

That said, the two sides still saw mutual benefit in manufacturing and supply chain diversification. Biden’s push for “friendshoring” dovetailed with Modi’s Make-in-India campaign. In 2023, the two countries launched the Initiative on Critical and Emerging Technology, targeting joint efforts in artificial intelligence (AI), quantum computing, semiconductors and advanced wireless. Apple’s moving iPhone production to India became a headline symbol of success: by 2025, India exported nearly $18 billion worth of iPhones, with about half of U.S. iPhone sales sourced from Indian plants.

Now, however, that manufacturing alignment is hitting geopolitical headwinds. Trump has made clear that he is not impressed by Apple’s India strategy. “We’re not interested in your factories in India,” he reportedly told Tim Cook, Apple’s chief executive. “We want you to build in the United States.” His broader goal of re-shoring U.S. industry runs headlong into Modi’s ambitions to lift India into the high-end manufacturing club.

The two visions may be fundamentally at odds. “There’s a clear competition between the U.S. and India when it comes to manufacturing,” Xie said, noting that the same sectors India has nurtured — semiconductors and smartphones — are those Trump wants repatriated. “If Trump pushes hard for reshoring, India could find itself left out of the next global manufacturing wave.”

Others agree that Trump’s promise to bring factories home may be more rhetorical than practical — but still damaging in perception. “It’s not realistic to expect Apple to pull its entire supply chain from China, India and Vietnam,” said Krishnan. “The U.S. lacks the industrial ecosystem to fully absorb that shift.” Still, the sentiment alone is enough to shake India’s calculus. After all, as Trump’s transactional instincts dominate his diplomatic style, New Delhi may find itself facing a partner who expects more than handshakes in stadiums.

As Modi’s government recalibrates its trade strategy, Indian policymakers are also engaged in a broader reassessment of the country’s relationship with the U.S. On the one hand, there is growing recognition in New Delhi that strategic cooperation with Washington remains vital for balancing China, attracting foreign capital and accelerating India’s economic development. But deeper structural issues — especially India’s close ties with Russia — continue to strain trust. “U.S.-India cooperation will likely depend on how much space both sides can tolerate in areas of divergence,” said Lou Chunhao of the China Institutes of Contemporary International Relations.

Delhi’s oil gamble

One issue India won’t yield on is Russian oil.

As the world’s third-largest oil consumer — behind only the U.S. and China — India imports more than 85% of its crude. Its rapidly expanding population and economy have made securing reliable energy supplies a national imperative. But unlike other major buyers, India doesn’t just consume the oil it imports. It also refines and re-exports a significant portion of it — often to the very countries urging it to halt purchases from Moscow.

Before 2022, Russian oil made up less than 2% of India’s oil imports. After the Ukraine war and price caps, that changed. By 2024, India was importing 1.75 million barrels a day — more than 35% of its total.

Analysts agree India is receiving Russian oil at deeply discounted rates. And for most of the past three years, it has done so without serious political fallout — thanks to careful diplomatic calibration.

“India’s oil strategy is grounded in energy security, not geopolitics,” said Mandar Oak, an assistant professor at the University of Adelaide. Before 2022, he noted, Russian oil was simply too expensive and logistically inconvenient for India. The Ukraine war and resulting sanctions changed the calculations.

Oak cautioned against reading India’s shift as ideological alignment with Moscow. “Geopolitics created the discount. India seized it to reduce costs, ease inflation and preserve refining margins—while keeping the option to adapt if sanctions or markets shift.”

Still, not everyone sees it that way. Sandeep Bhardwaj, a visiting fellow at the National University of Singapore’s Institute of South Asian Studies, said India’s energy calculus is not devoid of strategy. “Supporting Russia economically,” he said, “is part of India’s long-term push for a multipolar world.”

By 2025, U.S. frustration had mounted. India had already stopped buying from Iran and Venezuela under U.S. pressure. Now Washington wanted Russia off the list — but alternatives were scarce. And the double standards stung. Turkey and Europe still bought Russian oil, while more than 90% of Indian-refined oil products — much of it Russian — ended up in U.S. markets.

India’s foreign ministry called the pressure “unjust and unreasonable.”

Jivanta Schottli, a political scientist at Dublin City University, said New Delhi sees Washington’s oil sanctions threat less as a policy on energy and more as a bid for leverage. India, she explained, is seen as “an easy target” after refusing to budge in trade negotiations or on Trump’s push for Kashmir diplomacy. With Russia harder to pressure, she added, “the failure of India to give face or play ball … was miscalculated.”

Domestic politics in the U.S. further complicated matters. Farmers — particularly in states that helped elect Trump in 2024 — want India to open its markets. Meanwhile, some in the MAGA (Make American Great Again) base resent high-skilled Indian immigrants as job-stealers, casting them as “another successful non-white community in the U.S.”

But India’s ties with Russia extend beyond oil. Since the 1950s, Moscow has been a key arms supplier — accounting for more than 60% of India’s defense inventory. In July 2024, even as U.S.-India relations remained warm, Modi paid a high-profile visit to Moscow and was photographed warmly embracing Putin.

“The India-Russia relationship is rooted in mutual benefit, not conflict,” Bhardwaj said. Russia offers arms tech and United Nations veto backing; India brings economic growth and links to the Global South.

In a 2024 paper, Bhardwaj traced the arc of India-Russia ties: every upswing, he argued, coincided with a deterioration in India’s ties with either the U.S. or China. During calmer periods — such as the early 2000s — the relationship plateaued.

“India’s pivot toward the U.S. in recent years has only made it emphasize its friendship with Russia more,” Bhardwaj said, “to ensure it doesn’t fall entirely into Washington’s orbit — and to prevent Moscow from drifting away.”

For now, India appears unwilling to give ground. In August, India’s ambassador to Russia said New Delhi would continue buying oil from “the best available suppliers.” On Sept. 5, with U.S. tariffs already in place and more threats looming, Finance Minister Nirmala Sitharaman reiterated: India would purchase oil “from whoever serves our interests best.”

Diplomatic thaw emerges

Just months before a major shift in global power alignments, relations between China and India — long mired in border tensions and deep suspicion — began showing signs of revival.

In October 2024, Chinese President Xi Jinping and Modi met on the sidelines of the BRICS summit in Kazan, Russia. Xi emphasized that China and India should see each other as “opportunities for development, not threats”. Modi responded in kind, calling China a “true partner,” and pledged to deepen cooperation through BRICS and the Shanghai Cooperation Organization (SCO).

That symbolic handshake was soon followed by tangible actions. In April 2025, China’s Foreign Ministry announced the resumption of Indian pilgrimages to Xizang’s sacred Mount Kailash, a spiritual journey long cherished by Hindus. By the summer, India had reciprocated by reopening its long-suspended tourist visa program for Chinese nationals — the first time since the 2019 border clash.

In July, Subrahmanyam Jaishankar, India’s foreign minister, traveled to Tianjin for the SCO foreign ministers’ Meeting, marking his first visit to China since 2019. A month later, Chinese Foreign Minister Wang Yi made a reciprocal trip to New Delhi, where he held talks with Jaishankar and participated in the 24th round of special representative-level talks on the border issue. The next day, Modi personally welcomed Wang at his prime ministerial residence —a gesture rich with diplomatic meaning.

On Aug. 31, Xi and Modi met again — this time in Tianjin. Xi invoked the ancient civilizational ties, stressing that “two great Eastern nations” should focus on development as their “greatest common denominator,” and not let border disputes dominate the bilateral agenda.

Modi echoed that sentiment, hailing the relationship’s return to a “positive trajectory” and affirming “India and China are partners, not rivals.”

In a symbolic flourish the next day, Modi redefined the acronym SCO,, saying it should stand for “Security, Connectivity, Opportunity” positioning the bloc as a potential “leader in multilateralism.”.

Taken together, these exchanges suggest not just a warming of ties but a strategic recalibration on both sides. For China, soothing tensions with India amid escalating rivalry with the U.S. adds breathing room on its western flank. For India, a functional relationship with China provides leverage — both in dealing with Washington and in asserting its autonomy on the world stage.

India charts its course

As ties with the U.S. fray, India is doubling down on its foreign policy doctrine: strategic autonomy. Rooted in its post-colonial history, this principle has once again taken center stage under Modi’s diplomacy.

Just before the SCO summit, Modi made a surprise two-day visit to Japan, a country whose ties with India have recently grown strained. Modi’s trip yielded concrete results: pledges for increased investment and expanded security cooperation. That same day, the Kremlin announced that Putin would visit India in December, another reminder of New Delhi’s balancing act.

India’s multi-vector diplomacy didn’t stop there. On Sept. 8, even as Israel’s far-right Finance Minister Bezalel Smotrich faced bans across Europe, he was welcomed in New Delhi to sign a bilateral investment treaty. Simultaneously, Indian energy firms began quietly sounding out suppliers in the Gulf region, exploring a shift back to traditional sources of oil — just as Gulf states stepped up courtship of Indian downstream refinery assets. These parallel maneuvers signaled India’s refusal to be boxed into a single geopolitical corner.

This flexible approach is not new. From Nehru’s Cold War-era nonalignment to today’s version of “multi-alignment,” India has consistently sought to maintain freedom of action. Modi has rebranded that legacy through slogans like “vishwa mitra”— “friend of the world”— favoring issue-based coalitions rather than rigid alliances.

India has never formally allied itself with the U.S. or any Western bloc. “Had we signed on as an American ally, we’d be stuck now,” Bhardwaj said. Instead, New Delhi plays multiple cards: a founding member of BRICS and the SCO, while also participating in the U.S.-led Quad security dialogue. According to Oak from the University of Adelaide, this duality is by design — India seeks to avoid picking sides in what many see as an emerging “Cold War 2.0.”

That strategy is not without complications. The delicate recalibration with China may gain momentum following Modi’s visit to the SCO summit, but domestic political pressures —particularly from nationalist factions — limit how far he can go without backlash. The U.S. factor looms large, too. While trade friction and Trump-era tariffs have triggered pushback, Modi is unlikely to appear desperate for a deal. “He can’t be seen as queuing up to beg President Trump,” Oak said. “Not after building a hawkish persona as India’s strategic architect.”

India’s relationship with Russia, by contrast, remains one of its most durable. Despite global scrutiny over Moscow’s oil exports, Bhardwaj emphasized that Indo-Russian ties run deeper than hydrocarbons.

Analyst Jivanta Schottli echoed that view, pointing to India’s central role in shaping new SCO initiatives such as the proposed development bank. Modi’s very presence at the summit, she noted, was a deliberate signal to the world that “India has options.” She emphasized that while New Delhi remains committed to strategic autonomy, it is “not joining a China-led world order” and will continue to chart its own course on global governance platforms.

Indeed, it is the weight of those choices — and India’s willingness to wield them — that is shaping the next phase of global realignment. China and India may not become allies in the traditional sense, but mutual necessity is drawing them closer. And as the U.S. leans harder on its demands, it may find New Delhi far less pliant than it had once imagined.

Contact reporter Denise Jia (huijuanjia@caixin.com)

caixinglobal.com is the English-language online news portal of Chinese financial and business news media group Caixin. Global Neighbours is authorized to reprint this article.

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