By Madhuka Rukmalgama
Introduction
In 2025, Washington’s decision to dramatically increase tariffs on Indian goods up to 50 per cent, sent shockwaves across markets and strategic capitals alike. Initially targeted at curbing New Delhi’s Russian oil purchases and addressing trade imbalances, the move is producing unanticipated diplomatic reverberations. Rather than consolidating India’s ties with the United States, this protectionism is nudging it closer to Beijing.
The tariffs also highlight the broader re-emergence of U.S. economic coercion as a central instrument of foreign policy. For many developing economies, particularly in Asia and Africa, such measures carry echoes of unilateralism that contradict Washington’s rhetoric of partnership. India, as both a major democracy and a leading Global South economy, sits at the center of this contradiction, caught between its deepening ties with Washington and its growing trade interdependence with China.
China’s ambassador to India, Xu Feihong, described Washington’s tariffs as “bullying,” remarking that “silence or compromise only emboldens the bully.” He further stated that “China firmly opposes US decision to impose 50 per cent tariff on India and will firmly stand with India to uphold the multilateral trading system with the World Trade Organization (WTO) at its core”. The U.S. tariffs intended to isolate India may instead lay the groundwork for a pragmatic rapprochement between the continent’s two largest nations. Could this evolving alignment, born of opposition to Washington’s protectionism, signal the emergence of a Global South axis that reshapes the geopolitical order?
The U.S. tariffs and their fallout
The Trump administration’s decision to impose sweeping tariffs on Indian goods marked one of the sharpest ruptures in U.S.-India trade relations in decades. Initially justified as a response to India’s continued purchase of Russian oil and broader trade imbalances, the measures were part of Washington’s wider protectionist turn that has unsettled global markets.
In a stark escalation, the Trump administration earlier imposed a 25 per cent reciprocal tariff on Indian imports, which it then matched with an additional 25 per cent levy tied to India’s ongoing purchase of Russian oil, bringing the total to 50 per cent as of August 2025. The action, billed as a response to energy and trade policy concerns, immediately cast a shadow over key sectors like gems, textiles, seafood, and jewelry, industries that form the backbone of India’s export economy.
The political backlash was immediate. U.S. Congressman Ro Khanna cautioned that such punitive measures could push New Delhi closer to Beijing and Moscow, undermining years of bipartisan efforts to strengthen U.S.-India ties. On India’s domestic front, industry bodies such as the Federation of Indian Export Organizations (FIEO) warned that more than half of Indian shipments to the U.S. would be severely affected, endangering countless micro, small, and medium enterprises (MSMEs) that depend on the American market for survival. Trade associations stressed that the tariffs not only imperiled livelihoods but also weakened global supply chains already fragile from pandemic disruptions.
Beyond India, the move unsettled U.S. partners across the Global South. Countries in ASEAN and Africa expressed concern that protectionist shocks were undermining faith in the U.S.-led order. For many, the tariffs seemed less about rules and more about unilateral political leverage, making Beijing’s counter-narrative of “defending multilateralism” resonate more strongly.
China – India diplomatic thaw
Shortly thereafter, a notable thaw emerged between India and China. On August 31, 2025, during the Shanghai Cooperation Organization (SCO) summit in Tianjin, his first visit to China in seven years, Prime Minister Narendra Modi met President Xi Jinping on the sidelines of the gathering. The two leaders agreed that India and China are “development partners, not rivals,” and emphasized cooperation on trade, investment, air connectivity, visa facilitation, and the normalization of their disputed Himalayan border. Significantly, the meeting took place just five days after Washington imposed steep tariffs on Indian exports, adding to the sense that Beijing and New Delhi were seeking to present a united front against mounting Western pressure.
The symbolism was powerful. Just a few years earlier, the two sides were locked in bitter confrontations at Doklam and Galwan, where clashes along the Himalayan frontier deepened mistrust and triggered calls in India to reduce dependence on Chinese imports. Beijing had imposed restrictions on Indian pharmaceuticals and IT services, while New Delhi tightened scrutiny on Chinese tech companies. Against this backdrop of entrenched suspicion, the renewed warmth between the two leaders carried both tactical and symbolic weight.
This shift in tone extended to practical diplomacy. Direct flights resumed, visa restrictions eased, and Beijing agreed to lift export curbs on essential materials, concessions that highlighted Beijing’s interest in resetting ties. For India, these measures offered short-term economic relief while also signaling that China was willing to narrow, if only temporarily, the trust deficit.
Framing solidarity: Beyond bilateralism
What distinguishes the current rapprochement is its framing within a broader Global South narrative. Both India and China are now accentuating their leadership within collectives like BRICS, SCO, and the G77, commemorating shared resistance to unilateralism and economic coercion.
Ambassador Xu Feihong’s published commentary in The Indian Express, titled “The opportunity for China and India”, rang a clarion call: the U.S.’s tariff strategy is “unilateralism… economic bullying,” which must be countered in defense of the rules-based order and development rights of the Global South.
The message resonates with many developing nations that consider protectionism, be it sanctions or tariffs, as undermining equitable growth. By positioning their renewed alignment as a response to Western economic coercion, India and China are offering a model of South-South solidarity.
Opportunities and risks of an ‘Axis’
A coordinated India-China front may amplify global calls for trade justice and reform, while also opening avenues for collaboration in sectors such as energy, infrastructure, and digital commerce without the need for Western mediation. Their combined economic weight offers the Global South a powerful platform to push for reforms and to redefine the norms of multilateral engagement.
Yet deep-seated mistrust remains, rooted in border disputes, water concerns, and divergent views on strategic projects such as the Belt and Road Initiative and persistent trade imbalances. India’s existing defense and strategic ties with the United States, particularly through the Quad, further constrain the potential for full-scale alignment with China. Moreover, there is the danger of over-interpreting this moment; the current convergence may prove to be tactical rather than structural, as the India-China dynamic has historically been both fragile and cyclical.
Conclusion
U.S. protectionism, intended to coerce, may have unintentionally catalyzed a form of India–China rapprochement. This juncture of mutual distance from Washington is framing a nascent alignment not rooted in trust, but in shared resistance.
Yet, while this convergence challenges the existing order, it falls short of a robust, enduring “axis.” Instead, what is emerging is a pragmatic, evolving solidarity, one whose longevity hinges on whether both countries can move beyond transactional cooperation to address core strategic anxieties. For the Global South, however, even a temporary India–China convergence signals that the gravitational pull of multipolarity is growing stronger, fueled less by shared vision than by shared opposition to Western economic coercion.
Madhuka Rukmalgama is a Research Assistant at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI), specializing in international relations, global governance, South Asian politics, and the political and strategic dimensions of China’s Belt and Road Initiative. She holds an MA in International Relations from the University of Colombo.
Factum is an Asia-Pacific-focused think tank on International Relations, Tech Cooperation, and Strategic Communications accessible via www.factum.lk.
The views expressed here are the author’s own and do not necessarily reflect the organizations.
