External Affairs Minister S Jaishankar may have expressed surprise over the additional 25 per cent US tariff slapped on India over energy imports from Russia, reiterating that “it was the Americans” who said “we should do everything to stabilise the world’s energy markets, including buying oil from Russia”. There is, however, a growing realisation in New Delhi’s policy circles that India may have ended up becoming a “soft target” to pressure Russia into ending the Ukraine war – collateral damage in US President Donald Trump’s ambition to squeeze Russia’s crude exports and pressurise Moscow to get on to the negotiating table for ending the war in Europe.
Experts concur. Squeezing oil revenues, according to analysts such as David Woo, the former head of global interest Rates, Foreign Exchange, Emerging Market Fixed Income & Economics Research at Bank of America, was seen by Washington DC as the “cheapest and easiest way to weaken Russia”, with India ultimately getting the rough end of the stick. Pressuring China, from Washington DC’s point of view, was off the table.
Jaishankar’s statement Thursday, delivered when he was seated next to Russian Foreign Minister Sergey Lavrov in Moscow, came after the US doubled down on its attack on India. Treasury Secretary Scott Bessett accused India on Wednesday of profiteering from the purchases of oil from Russia in a deal that he called ”the Indian arbitrage – They’re buying cheap Russian oil, selling petrochemicals back out. Much of that is going to the richest families in India”.
Chinese embrace, and the Hobson’s choice
From an Indian perspective, this situation ostensibly presents the ‘prisoner’s dilemma’ – a classic game theory scenario illustrating why two rational individuals might not cooperate even when it’s in their best interest to do so, essentially highlighting the conflict between individual rationality and collective well-being. There are also references being made in Delhi to this being a Game of Chicken, another game theory scenario where two parties must choose between driving forward or swerving to avoid a crash, and where if neither party backs down, the result could be catastrophic.
And to make it worse, China’s sudden embrace presents New Delhi with a “Hobson’s choice” of sorts, a reference to a situation where there appears to be a free choice but there is actually no real alternative; the term originates from Thomas Hobson, a 17th-century stable owner in Cambridge, England, who required customers to take the horse nearest the stable door or have no horse at all. Just weeks ago, a top Indian General had accused China of leveraging a “borrowed knife”, citing Beijing’s use of Pakistan as a tool to act against India during the Op Sindoor skirmish, where China provided significant military hardware and intelligence support to Pakistan.
And while Trump’s tariff assault seems to have catalysed efforts to stabilise the India-China relationship, there are “fundamental differences” between the two sides, including core security issues and the fact that China is in the running to get even more favourable terms from the US in the event a bilateral deal is struck between the two, which looks highly likely.
Already, China is on course to be in a significantly advantageous position vis-a-vis India after the August 27 secondary tariffs kick in. In this context, the only loser in terms of a further backlash from Washington DC on account of this pronounced embrace with China and Russia could be India. New Delhi was among the early frontruners to have kicked off trade talks with the US, but failed to close a deal. While many major economies signed trade pacts on Trump’s terms, India now finds itself in the company of Brazil, Myanmar, and Switzerland facing steep US tariffs. China is a beneficiary of this situation, as it stands, or as it gets progressively worse for India.
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After the Op Sindoor ceasefire, when Trump tried to take credit for bringing the India-Pakistan conflict to a halt, New Delhi insisted that the US had no role in it. Pakistan, on the other hand, said teh American President played a huge role. The problem is that Trump seems to have taken this personally and turned the fire on India, while Islamabad has cashed in on the situation. A visible embrace with China, could likewise end up being counterproductive for India, even as Beijing could stand to gain in both economic and strategic terms.
Now, with Prime Minister Narendra Modi set to meet Chinese President Xi Jinping later this month at the Shanghai Cooperation summit in Tianjin, this comes at a time when New Delhi is ostensibly recalibrating its foreign policy toward Beijing. Much of this realignment from New Delhi’s perspective is, however, coming in the backdrop of the American policy reversal. The Trump administration’s escalating attacks on India sets back a project spanning nearly three decades: a deepening bipartisan economic engagement between the two democracies and an evolving resolve on both sides to elevate this bilateral relationship into a “global strategic partnership”. It is also a stark reminder for New Delhi that just 25 years ago, India was under American sanctions, and that going forward, even the post-Trump regimes in the US could take years to revert back to the strategic embrace that existed prior to January 2025, if at all.
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