How India can navigate the new world order in Trump 2.0 – Firstpost

The issue before India is to navigate a so-called new world order being created by dramatic developments at the international level on the political, security, economic and trade fronts.

US President Donald Trump’s “Make America Great Again” is a blueprint for economic recovery based on protectionism and de-globalisation and revival of its depleted manufacturing sector. As the world’s largest economy, the biggest consumption market, with huge capital resources, controlling the global financial system through the dollar as the world’s reserve currency, Trump has cards to play, however disputable the results of his policy choices may turn out to be.

With his decision to use tariffs against virtually all countries, including allies, in order to reduce America’s yawning trade deficit and bring manufacturing back home in pursuit of bettering the economic future of America’s middle class and creating more employment opportunities for the American worker, Trump has upended the existing rules-based international order incarnated by the WTO, an organisation that has evolved from GATT under US impulsion.

At the end of the day, it has most often been economic rivalry, the search for markets, control over resources that has been the source of wars and conflicts historically. While an actual military conflict may not result from the unilateral moves by Trump on the trade front, the danger of his use of the tariff lever to browbeat his allies, partners and adversaries alike could trigger trade wars between the major centres of economic power with major consequences that could include lower global growth, economic recession, economic distress across countries, rise in poverty levels, and so on.

The developing countries will particularly suffer, with, for instance, the attaining of UN approved SDG goals by 2030, whose implementation has already lagged, getting delayed further. Trump has not only walked out of the Paris Climate Change Agreement, but his strategy for America’s energy security also involves boosting domestically produced oil and gas as well as coal usage which threatens to derail the agenda of decarbonisation of the global economy. At the international level, the core developing country agenda at climate change negotiations to access technology and fund transfers from the developed world for attaining mitigation and adaptation goals will also get derailed.

Multilateralism has already been faced with such a crisis that the UNGA devoted a special session—the 78th in September 2023—to reform of multilateralism. Trump is striking a further blow at multilateralism by also walking out of the WHO and the UN Human Rights Commission. He had walked out of the Iran nuclear agreement in his first tenure and is now threatening Iran, seen as politically and militarily weakened with the decimation of Hamas and Hezbollah and the ouster of Bashar al Assad from Syria, with potential military action driven by Israeli security interests.

With Trump imposing high tariffs on the EU and the EU threatening retaliatory tariffs, engaging Russia on Ukraine without involving Europe, openly interfering in European domestic politics, especially in Germany, the UK and France in favour of rightwing parties , pressuring Europe to raise their defence budgets and ease the burden on the US to provide security to Europe under the NATO umbrella, not to mention the dismissive approach to Canada, the G7 itself will come under strain.

The G20 platform that brought together the most developed and emerging developing countries to address issues of global interest collectively is coming under pressure with the US not attending the G20 Foreign Ministers’ conference in South Africa. Whether Trump will attend the G20 summit is moot. The US is slated to take over the G20 presidency after South Africa, which casts a shadow on its functioning in the future.

It is most likely that the thrust given to the G20 agenda, especially by India, to give priority to the concerns and priorities of the global south will lose steam. Already, the US thinks that the G20 agenda is DEI (Diversity, Equity, Inclusion) inspired, and this is an organisational framework that the Trump administration is deeply opposed to.

The US under Trump is going back to 19th century power politics, with his claims to Greenland, disputing Canada’s independent status, renaming the Gulf of Mexico, reclaiming the Panama Canal, etc. Trump has already threatened BRICS, saying he will impose 100 per cent tariffs if any country in BRICS moves towards de-dollarisation. US Commerce Secretary Lutnick at the Raisina Dialogue in March 2025 spoke negatively about India’s BRICS membership.

The so-called New World Order is emerging because of China’s spectacular economic rise. China’s domination of global manufacturing and control over critical supply chains, its status as the largest exporter and now making remarkable strides in advanced technology and innovation is a challenge that India too faces, along with the West in general. Even as China is a security threat to India on our border, in our neighbourhood as well as in the seas around us, we have to engage China nonetheless.

We have not closed our doors to China, are engaging it at high political and military levels and continue our trade ties with it to the point that it is today our biggest or second biggest partner in trade in goods as an individual country, with bilateral trade reaching over $130 billion. India cannot dispense with intermediates from China for its export products, including APIs for our pharmaceutical industry.

There is a growing debate in India on loosening the restrictions we have imposed on China in various domains after the clash in Galwan in 2020, and some steps have been taken or agreed to in principle with regard to resuming air flights, visas for journalists, tourism, an easier visa regime for Chinese technicians to install equipment imported from China, and student exchanges, etc. This pragmatic approach is also backed by a security approach involving cooperation with the US and others to deter China, such as our membership of the Quad, our support for the Indo-Pacific concept, the Malabar exercises, and so on.

We have to take into account the fact that we cannot control the future trajectory of US-China ties. Whether they become better or worse, we should not become hostage to US policies towards China. The US and China are confronting each other in the western Pacific and the Taiwan issue is fraught with danger. If there is a roll back of US power, it will be in this region, and hence the stakes for the US are very high. The US would want to deter China but also avoid a military conflict. Their economies have become very intertwined. The tariffs imposed by Trump on China and China’s retaliation create huge uncertainties. A trade war between the world’s largest economies is fraught with great danger.

We should, therefore, maintain some independence in our policies towards China. We have also to keep in mind our membership of BRICS, the SCO, the Russia-India-China triangle, our relations with Central Asian countries, as in all these formats we have to engage with China as constructively as possible.

India’s priority is economic development for which India needs a stable world order, international peace and cooperation. India would want to pursue its national interest through cooperation, not confrontation. This means not choosing sides, being able to talk with all sides, with a view to acting as a bridge internationally, but not in terms of mediating conflicts but being useful to the extent that contending sides would want. Any peacemaking has to be under the UN umbrella.

We have to preserve our strategic autonomy to the extent possible, though no country in a globalised system that is based on interdependence can maintain full strategic autonomy. This autonomy is also anchored in our becoming the voice of the Global South, our strategic partnerships with a score of countries based on working on shared bilateral interests on a longer-term basis.

As part of our strategic autonomy preserving our ties with Russia remains a priority, even as we expand our relations with the US. Our common interests with Russia include a stable, peaceful, multipolar world, an effective UN and a multilateral system, opposition to unipolarity, a more equal global system, respect for diversity, working together in BRICS and the SCO. It also includes opposition to a policy of imposing sanctions and of weaponising the US dollar. Expanding balanced bilateral trade, nurturing defence ties, fostering connectivity such as the INSTC and the Vladivostok-Chennai corridor, trading in national currencies, investing more in Russia’s Far East, working on emerging technologies, nuclear and space cooperation, etc, are other areas of common interest.

From now to 2030, India priority would be to attract more investments, have greater access to advanced technology, increase the share of manufacturing in our GDP; as part of aatmanirbharta, develop our semiconductor production capacity and that of the electronic sector in general, build infrastructure, especially the digital public infrastructure, develop our AI capabilities, become part of global trustworthy and resilient supply chains, develop our indigenous capacities in defence, including defence exports, and so on.

India believes in multipolarity as only in a multipolar system can India play its due role. We see a cooperative multipolar world, not a confrontational one. It should not result in new divisions, with the non-western and Eurasian countries forming a bloc against the western bloc. India would not want multipolarity to be directed against either the US or Europe. With both of them India has and is developing close ties as part of its policy of friendship towards all. The US treats both Russia and China as adversaries but does not treat India as one, though we also have many differences with the US.

For India, a multipolar world must mean as a condition that Asia should first be multipolar. How committed China is to multipolarity is an open question. Does it really want a G2 eventually, given that on broad parameters it is becoming a peer power of the US.

Kanwal Sibal is a former Indian Foreign Secretary. He was India’s Ambassador to Turkey, Egypt, France and Russia. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.