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In Focus
Trump Tariffs: Silver Lining for India?
In a bid to “take back America’s economic sovereignty,” President Trump has imposed sweeping tariffs, including a universal 10% baseline levy and individualized reciprocal tariffs targeting countries with significant trade deficits with the U.S. India will face a 26% tariff starting April 9, revised from an earlier announcement of 27%, positioning it lower than China (54%), Vietnam (46%), and Bangladesh (37%). While the Trump administration argues that trade deficits harm the middle class and enable unfair practices, economists caution that framing tariffs around trade deficits oversimplifies macroeconomic dynamics. In the short term, tariffs are also likely to strain the US alliance network in the Indo-Pacific, with US allies such as Japan and South Korea now leaning toward initiating talks with Washington to negotiate relief measures.
For India, the relatively moderate tariff rate presents both challenges and opportunities. India could strengthen its position in sectors like textiles and semiconductor packaging, which remain tariff-exempt, by capitalizing on disrupted supply chains. However, achieving this requires significant domestic investment and capacity-building given the unreliability of disrupted foreign supply chains. On the downside, India's electronics manufacturing could face hurdles as components imported from China, South Korea, and Taiwan—each hit with tariffs exceeding 25%—may slow production for facilities like Apple’s Indian plant. Enhancing export efficiency will be crucial for long-term resilience in the shifting trade landscape.
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Vance’s Greenland Visit Signals Arctic Power Play
U.S. Vice President JD Vance and Second Lady Usha Vance visited Greenland’s Pituffik Space Base on March 28, criticizing Denmark for “underinvesting” in the region and failing to counter China and Russia’s Arctic expansion. While President Trump framed Greenland as key to “world peace and international security,” Washington’s interests go beyond rhetoric. The region offers the shortest transatlantic route and holds vast reserves of rare-earth minerals critical for defense and tech manufacturing. Beijing has used its growing ties with Moscow to expand its Arctic footprint. In its annual threat assessment report, the US Intelligence Community noted that melting sea ice has created opportunities for China to expand maritime transport and energy exploitation in the Arctic. It says that China aims to gain greater access to Greenland’s natural resources. The U.S. is eyeing radar installations to monitor Russian and Chinese naval movements in the region.
India’s former Minister of State for External Affairs, Meenakshi Lekhi, in a recent article, called on India to leverage its ties with Russia and the US, while reaching out to Greenland, to ensure a seat at the table in shaping the region’s future. India’s Arctic Policy emphasizes sustainability and scientific collaboration, but as global powers increase their stakes in the Arctic, India must also focus on securing access to critical resources like rare-earth minerals and hydrocarbons. Strengthening partnerships with Nordic countries and balancing relations with Russia could help India counterbalance China’s growing dominance in Arctic shipping lanes while advancing its own strategic interests in this increasingly contested region.
China Escalates Pressure on Taiwan
China launched live-fire military drills in the Taiwan Strait, simulating strikes on critical infrastructure, including ports, energy facilities, and transportation hubs. This comes together with a series of provocative People's Liberation Army (PLA)-released cartoons depicting Taiwan’s President Lai Ching-te as a parasite, with Taiwan engulfed in flames below him. This can be seen as part of Beijing’s broader strategy—ceaseless military pressure, cyber intrusions, economic coercion, organised crime, espionage and influence operations —aiming to deepen domestic political fractures in Taiwan and push for unification. Add to this, increased pressure from Washington which is denting a hole in Taipei’s “silicon shield,” even as the Trump tariffs did not impact Taiwan’s prized semiconductor industry.
Meanwhile, India, after a long hiatus, sent its top diplomat to an event organised by the Chinese embassy to mark the 75th anniversary of diplomatic relations. Leaders of both countries also exchanged congratulatory messages on the occasion- but, only the Chinese side released the readout on their MOFA website. India appears to have a pragmatic yet cautious approach towards normalising bilateral relations.
PM Modi at BIMSTEC Summit
During Prime Minister Modi’s participation in the sixth BIMSTEC Summit in Bangkok, key announcements and proposals for India-led regional initiatives were made, including on digital payments, skilling, disaster management and BIMSTEC games. This aligns with Thailand’s “Bangkok Vision 2030,” aimed at creating a prosperous and resilient BIMSTEC. The summit comes as Southeast Asian markets, hit hard by global tariff disruptions, look to diversify their trade partnerships.
PM Modi held key bilateral meetings on the sidelines of the Summit. India and Thailand elevated their relations to a strategic partnership, with agreements spanning trade, defense, and digital connectivity. With Myanmar, India expressed readiness to deploy more material assistance and resources under 'Operation Brahma' HADR efforts in the aftermath of the recent earthquake. In a first since Hasina's ouster, Modi also met Bangladesh’s interim leader Muhammad Yunus, amid strained bilateral ties and following controversial statements Yunus made during his recent China trip. Yunus appeared to invite China to expand its influence in India's landlocked northeast region, by leveraging Bangladesh’s role as the "only guardian of the Ocean." As Bangladesh normalises its ties with Pakistan, Yunus has been trying to revive SAARC—a move contrasting India’s decade-long pivot toward BIMSTEC under its 'Act East' policy, which has prioritized engagement with Southeast Asia over the stalled, dated South Asian bloc.
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