Hello, this is Priyanka Salve writing from Singapore.
Welcome to the latest edition of Inside India. A one-stop destination for stories and developments in the world’s fastest growing large economy.
For more than two decades, successive US administrations have viewed India as a counterweight to China’s growing influence in the Indo-Pacific region. However, the current US government stance appears to be supporting China while punishing India. This week, we unpack how the US-China summit could affect relations between New Delhi and Washington.
Read more!
Do you have any thoughts about today’s newsletter? Share them with the team.
big story
U.S. President Donald Trump and Chinese President Xi Jinping shake hands as they depart after bilateral talks at Gimhae Air Force Base in Busan, South Korea, October 30, 2025.
Andrew Harnik | Getty Images
India, whose importance in U.S. foreign policy has been shaped by friction between the two countries, will be closely watching President Donald Trump’s meeting with Chinese President Xi Jinping.
As a summit between the world’s two largest economies begins later in the day, India will hope that President Trump’s softening of its stance on China does not lead to a deal that diminishes New Delhi’s role in the Indo-Pacific, experts said.
Ronak D. Desai, a visiting scholar at Stanford University’s Hoover Institution, told CNBC that if President Trump prioritizes bilateral grand negotiations with China, India will have “reasonable concerns that the United States will treat China not as a central strategic challenge but as a central negotiating partner in Asia.”
Therefore, “India needs to make its strategic value harder to overlook,” Desai said, adding that this means the US-India relationship must deliver more tangible results in areas such as defense, maritime security, critical minerals, energy and manufacturing.
Trump and Xi last met in November in Busan, South Korea, where the US president called Xi a “very tough negotiator” and said the two sides had “always had a very good relationship.” Meanwhile, Mr. Xi has urged China and the United States to become “partners and friends.” It was during this meeting that President Trump referred to China and the United States as the G2.
“He (President Trump) likes leaders with strong arms,” Nirupama Rao, a former Indian ambassador to the United States, China and Sri Lanka, told CNBC’s “Inside India” on Monday, hinting at President Trump’s recent conciliatory stance toward Mr. Xi.
Changes in US foreign policy
For more than two decades, successive US administrations have deepened ties with India as a way to counter Chinese influence in the Indo-Pacific. India, the world’s largest democracy, is seen as a natural partner for the United States, in contrast to China’s one-party government, experts say.
“Trump was the one who challenged America’s China policy in his first term and gave momentum to QUAD,” said Harsh Pant, vice president of research and foreign policy at the Observer Research Foundation. QUAD is a diplomatic partnership between Australia, India, Japan and the United States aimed at a “peaceful, stable and prosperous Indo-Pacific.”
India has also become one of the many beneficiaries of the China+1 policy, as US companies have started diversifying their supply chains away from Beijing due to trade tensions between China and the US that intensified during President Trump’s first term.
However, changes in US foreign policy occurred during President Trump’s second term, and relations between Washington and New Delhi deteriorated over trade and tariffs. The US president even warned Apple, pursuing an “America first” policy, not to manufacture smartphones in India.
“India’s assertiveness as a counterweight to China has weakened under the Trump administration,” said Chatham House senior South Asia fellow Chietiji Vajpayee, adding that Trump’s foreign policy in his second term was more transactional and less value-oriented.
India-U.S. relations suffered a major shock last year when New Delhi accused China of profiteering from cheap Russian oil and imposed a 25% surcharge on the country, ignoring China’s purchases of Russian oil.
Following last year’s Xi-Trump meeting in Busan, the United States also lowered tariffs on Chinese goods to about 47%, lower than the 50% it imposed on imports from India, which it later lowered earlier this year.
“The second (Trump) administration started off with a very hawkish stance on China, but quickly realized that there were no good substitutes for the Chinese components that American businesses and consumers needed,” said Aryan Dorozario, associate fellow and chair of India and Emerging Asian Economies at CSIS. This led to a softening of its attitude toward the Chinese government.
U.S.-India relations have deteriorated as President Trump pursues a transactional foreign policy, while China and New Delhi have been embroiled in a decades-long border dispute and relations are fraught with tension. Against this backdrop, India will likely be watching the outcome of the US-China summit more closely than most Asian countries.
“From New Delhi’s perspective, it will be viewing the Trump-Xi meeting with some trepidation amid concerns about the resurgence of the so-called ‘G2’ initiative that will alienate middle powers like India,” Vajpayee said.
need to know
PM Modi says war with Iran poses serious risks to India
Indian Prime Minister Narendra Modi on Sunday stressed the serious economic impact of the Iran war, urging people to curb fuel use, reduce international travel and suspend gold purchases. Rising energy costs are expected to significantly widen the country’s trade and current account deficits.
India’s inflation rate rose for 6th consecutive month in April
India’s consumer price inflation rate rose for the sixth consecutive month in April to 3.48% from 3.40% in March, even as the government stabilized prices to protect consumers from rising global oil prices.
New Delhi raises bullion import duties to ease rupee pressure
India, the world’s second-largest gold consumer, raised import duties on gold and silver from 6% to 15%, days after Prime Minister Narendra Modi called on people to curb their bullion purchases for a year as overseas purchases weighed on the rupee.
very soon
May 14-15: India hosts the BRICS Foreign Ministers’ Meeting.
May 15-20: Prime Minister Modi visits UAE, Netherlands, Sweden, Norway, and Italy.
