When Donald Trump and Xi Jinping meet, the real story is what the rest of the world experiences afterwards. For India, a successful Xi–Trump meeting could create both opportunities and risks at the same time.
The first impact would probably be positive. If the US and China reduce tensions even slightly, global markets are likely to calm down. The supply chains may stabilise, and investors would become less nervous about a major geopolitical confrontation. Oil prices could soften as an indirect consequence. For India, which imports most of its energy, that matters immediately. Lower oil prices help inflation, government finances and overall economic sentiment.
The medium-term implications are more complicated.
The China+1 Question
Over the last few years, India has benefited from the growing confrontation between the US and China. Global companies started looking for alternatives to China. Governments spoke increasingly about “China+1” strategies. India became part of that conversation because of its scale, market size and political stability.
If Washington and Beijing now move towards a more practical relationship, even temporarily, some of that momentum could weaken. This does not mean companies will suddenly abandon India or rush back fully into China. The concerns around China remain on rising costs, tighter political control, regulatory uncertainty and geopolitical risk. These are still real. But businesses may feel less urgency to diversify quickly. That changes the pace of investment decisions. It isn’t to our advantage.
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Geopolitics Is Not A Strategy
India often assumes that geopolitics alone will drive manufacturing growth. That is dangerous thinking. Countries attract investment through execution, infrastructure, speed and policy consistency, not simply because global powers are fighting with each other.
A thaw between the US and China could also affect India strategically.
In recent years, India’s importance to Washington has risen because America increasingly sees China as its main challenger. But if the US decides it can still negotiate and do business with Beijing where necessary, well, that is the nature of global politics. Countries compete fiercely in some areas while cooperating in others. America’s relationship with China is not ideological in the way many imagine. In fact, it is deeply transactional. Right from the initial opening between Mao and Nixon, they are wary of one another but do business nonetheless.
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If the US gains economic advantages through engagement with China, whether on trade, technology, inflation or supply chains, it can soften its position surprisingly quickly.
India should pay close attention to that reality. There is another issue that matters even more in the long run, that of technology. The two control the world’s deep tech. If the Xi–Trump talks lead to any easing around technology restrictions, semiconductors or advanced manufacturing, China’s industrial strength could recover even faster.
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Building Beyond The Rivalry
India still remains far behind in deep manufacturing, semiconductor capability and high-end industrial systems. The country has talent and scale, but talent alone is not enough in the AI and technology race.
The danger is that India becomes a very large market for technologies built elsewhere instead of becoming a serious technology producer itself. That is why India’s long-term strategy cannot depend mainly on global tensions with China. It must depend on building its own strengths in manufacturing depth, logistics, energy security, technological capability and institutional efficiency.
The Xi–Trump meeting is ultimately a reminder that the world’s biggest powers will always keep negotiating with each other, even during periods of rivalry. It is a cautionary tale for countries that build a strategy around the comforting belief that “the enemy of my enemy is my friend". We are living in a material world. In geopolitics, there are no permanent friendships, only overlapping interests that can change with startling speed.
India’s challenge is to ensure that its rise does not depend too heavily on how those negotiations evolve.
Disclaimer: The views expressed in this column are those of the author and do not necessarily reflect the views of BW Businessworld or its editorial team |
