📰Stealing India's Moment | Daily India Briefing

For years, it seemed India was on the cusp of its long-awaited breakout. With rising anti-China sentiment in the United States and Europe, the world’s largest democracy was poised to step into a starring role in global trade, supply chains, and security. Now, it’s being delayed.

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Macro

• Oil markets are heading for weekly gains due to tariffs and Russia. India was singled out for buying Russian crude since 33 percent of its imports are currently from Russia.

• India will lose 0.3 points of GDP due to new tariffs. The country is more insulated than others, due to an existing emphasis on domestic production in the economy’s GDP.

Equities

• Unilever sales rose on strong ice cream performance. Shares rose 1.1 percent after underlying ice cream sales grew by 3.8 percent. They plan on spinning ice cream off while going through a broader restructuring plan. The company is investing a disproportionate amount in NAM and India for growth.

• ArcelorMittal is cutting its steel demand outlook to growth of 1.5 - 2.5 percent due to flat product consumption. US steel tariffs have doubled, leading to the company announcing it will limit restocking. Shares fell 4.6 percent after earnings came out at $1.9 billion (₹163.4 billion), plus its lowest EBITDA since 2020. 

• Tata Steel announced it's exploring new markets after tariffs. Their steel sales to the US contribute 20 percent to its overall profit.

• Dhoot Transmission, backed by Bain, is considering a $250 million (₹21.5 billion) IPO. Investment banks are working on pitching share sales to help scale growth globally. Dhoot operates more than 20 auto-part manufacturing facilities across India, the UK, Slovakia, and Thailand.

Alts

• Indian oil refiners are drawing up plans for non-Russian crude. Refiners have to locate alternate barrels along with various volumes, likely from the Middle East. The situation was planned for at most companies as part of scenario analysis, but the strength of the US request was not.

• Indian Oil Corp is buying at least 5 million crude barrels from the US and another 2 million from the UAE. The purchases are both larger and closer in delivery date than the norm for the company, reflecting the massive US policy shift. Refiners make $3 (₹258) more per barrel from the US than from the UAE. 

• Deloitte still expects hundreds of billions of investments over the next 3 years. Even with the US’s hard stance against India, the risk premium in India has gone down substantially due to the mature market.

Policy

• Randhir Jaiswal, spokesperson for India’s Ministry of External Affairs, defended India’s relationship with Russia as “time-tested,” citing that it buys 35 percent of its crude oil and 36 percent of its arms from Russia. India rejected outside pressure, saying its partnerships are based on national interest, not third-party approval.

• India expects further trade talks with the US. US trade negotiators are supposed to visit India on August 25th to resume deals after the current talks fell through. Indian officials believe the 25% tariff will impact less than half of India’s $85 billion (₹7.3 trillion) exports to the US.

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Stealing India’s Moment

For years, it seemed India was on the cusp of its long-awaited breakout. With rising anti-China sentiment in the United States and Europe, the world’s largest democracy was poised to step into a starring role in global trade, supply chains, and security. The idea was simple: as the world decoupled from China, it would rotate into India. Multinational companies were investing in new plants and offices, leading to India’s own independent rise. 

India also played the game well with neutrality or “liminality” by cultivating ties with the West and Russia, or the Quad and BRICs. Essentially, the country has remained agile and non-aligned. 

However, now that liminality is being challenged on both sides due to China’s growing influence over BRICs and the global economy, as well as the hard stance the US is taking under Trump. 

Past success:

India’s grand strategy since the end of the Cold War has rested on maintaining strategic autonomy by refusing to be a formal ally, yet deeply engaging with the United States. This middle path allowed India to avoid choosing between Russia and America, between trade with China and military exercises with the Quad.

The Biden administration, while occasionally pushing India on issues like Russia and human rights, largely respected this autonomy. It launched the iCET (Initiative on Critical and Emerging Technology), supported India’s semiconductor ambitions, and expanded joint defense production (including co-producing GE jet engines and MQ-9B drones). Biden even welcomed India into the Mineral Security Partnership and backed its bid for a permanent UN Security Council seat.

Trump 1.0. During Trump’s first term, India found a way to flatter, accommodate, and even thrive under his unpredictable leadership. Prime Minister Modi called Trump a “true friend” and the two staged massive stadium rallies in Houston and Ahmedabad, soaking in the adulation of their respective bases. Trump’s administration even deepened defense ties with India, fast-tracking arms sales and intelligence cooperation.

Trump 2.0 on the other hand…

Now, in a potential second term, Trump may not be so easily charmed. His foreign policy doctrine boils down to one ultimatum: “With us or against us.” And that poses an existential question for India’s global strategy.

He slapped tariffs on Indian goods, penalized New Delhi for its trade with Russia, and demanded agricultural concessions that threatened to undermine Modi’s rural base — still reeling from a massive farmer protest. On Pakistan, Trump took credit for a brokered peace deal and worse, gave a FTA to Pakistan the same day Indian tariffs rose. The knife was further driven when Trump said US companies would help Pakistan drill more oil so that India could lean away from Russia and buy from their neighbor.

India is now being forced into explicit alignment. Trump is already signaling that continued trade access, technology transfer, and defense cooperation will come with conditions like abandoning economic ties with Russia, taking a firmer stance against China, and opening Indian markets to US goods, especially agriculture. 

The stakes are high. India’s growth story depends on integration with the West, access to capital, and inclusion in the US-led technology and supply chains. Trump, however, sees global trade through a zero-sum lens. In his first term, India lost preferential trade status under the Generalized System of Preferences (GSP) and faced escalating tariffs. There’s little reason to believe Trump 2.0 would treat India differently unless it earns it through alignment.

Ironically, just as India is emerging as a key node in the global tech, energy, and defense ecosystems — with booming exports, a vibrant startup scene, and strategic value in the Indo-Pacific — it faces the risk of being frozen out if it resists Trump’s demands.

See you Monday.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

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