Author is a Research Lead of International Affairs at Prastaav and an incoming student of Master’s in Public and International Affairs, University of Pittsburgh.

In today’s new world, with a pandemic that has hit the world with a devastating virus and newer power blocs forming, India must tread carefully in making strategic alliances. India needs to find its footing in the new world order, as it is stuck between the two economic giants, the United States of America, and the People’s Republic of China. A new Cold War is brewing between Beijing and Washington, and this time, it involves a more interconnected mesh of countries, where India might need to take a stronger stance, for it to be at the higher end of the spectrum of developing countries.



Many years ago, during the 1890s, there was a time when the United States and China were allies. This was a time when there were colonial powers and monarchs. The United States was a republic, and so wanted that kind of governance to prevail more. When the colonial powers of France, Britain, Germany, Russia and Japan wanted to exert their dominance and influence in the Chinese region, the US tried putting an end to it, by initiating an ‘Open Doors Policy’, thus trying to promote equal trade opportunities across the region. Russia and Japan decided to go against the policy which led to a war between the two countries for Manchuria in 1904, whereafter the US mediated and negotiated peace. The newly formed Republic of China was a strong ally of the United States and a vehement enemy of Japan. Before World War II, in 1931, Japan, an immensely powerful country then, invaded and took control of Manchuria. The US then sent support to the Republic of China, and during World War II, officially waged war on Japan, which culminated in the defeat of Japan after the nuclear bomb detonations of Hiroshima and Nagasaki. Meanwhile, China was involved with a civil war that broke out between the Nationalists and the Communists. The war ended with a communist victory, with the nationalists being forced to the island of Taiwan. Soon after, the People’s Republic of China was established with Mao Zedong crowned as their first communist leader. A resolution was passed in the United Nations, which recognised the People’s Republic of China as the legitimate government of China, and the position of the permanent member of the Security Council was transferred from ROC (Taiwan) to PRC. Since then, there was a gradual decline in the relations between the US and China.

The United States shared great ties with India under British colonial rule. It recognised the importance and strategical position of India in a post-colonial world. In 1947, when India achieved independence, Washington seemed like a promising ally, as India adopted a secular, democratic and republic stance, which mirrored the governance of the United States. But India’s refusal to comply with the United Nations’ commissions on the Kashmir issue, tilted the diplomatic scale of the US slightly towards Pakistan. Moreover, after the Communist China regime was established in 1949, India, along with the Soviet Union recognised it as the legitimate government of China, while the US still recognised the Republic of China (Taiwan) as the legitimate government. Washington still wanted to establish better diplomatic relations with India, as it saw India as a potential countering nation against the growing communist PRC, despite India taking a stance of non-alignment during the Cold War. The growing US-Pakistan relations and the Sino-Indian war of 1962 forced India to veer towards the Soviet Union as a major ally. India supported the Soviet trade model for industrialisation and imported arms and defence equipment from USSR. After the Sino-Indian war, Nehru’s mindset towards India and China creating a strong Asiatic front for trade crumbled away. Although politically they were pitted against each other, they rose together economically making way for many economic pacts with each other and other countries. After the Cold War, India and the US forged a much greater alliance than before, as incursions from Pakistan increased, and its support to terrorist factions started to become visible. Throughout the years of Indian foreign policy, India started to have a much broader, pluralistic view of the world.

The Geopolitical Gamut of Today

The world today is far more multipolar, multilateral, and pluralistic than it once was. With many different power blocs, trade pacts, and diplomatic alliances, we see a lot of countries trying to grab the ropes of power. After the Cold War, the United States assumed a sense of unipolar power, where it was seen trying to exert its influence, especially in the middle east. This was primarily due to the growing Islamic-Jihadist activities of the Taliban and Al-Qaeda. India and the United States share the same apprehension towards terrorism, have signed various defence agreements, and have conducted multiple military exercises, more than with any other country. The latest agreement between Delhi and Washington is the Basic Exchange and Cooperation Agreement (BECA) of 2020, which will help India get real-time access to the geospatial intelligence of the United States which will further boost India’s defence intelligence for the air force, missile or drone reconnaissance missions immensely.

The most recent masterstroke of Washington was to secure diplomatic ties between Israel and two Arab states, Saudi Arabia and the United Arab Emirates. This was a move made by the United States to counter the growing hostility of Iran in the middle east region. Since this will facilitate better trade and diplomacy between the middle eastern countries, India too will benefit from it. Since India has extremely good ties with Israel and countries of the IORA (Indian Ocean Rim Association) such as Oman and the UAE, India stands to get a sizable chunk of trade coming from the strategic Hormuz Strait.

After India rescinded Article 370 from its Constitution, Kashmir lost its autonomy and India now has complete jurisdiction over the state, which has been divided into two union territories. While this is an absolute win for India regarding militant incursions, it invited oppression from China in one of their ‘salami-slicing’ methods, when they encroached into Indian territory of Ladakh, which ended in a brutal clash between Chinese and Indian forces in the Galwan valley. According to some scholars, the Chinese aggression was a result of the CPEC (China Pakistan Economic Corridor) being threatened by the complete Indian autonomy over Kashmir and the Gwadar port of Pakistan being continuously attacked by Balochi insurgents. However, China is currently eyeing Afghanistan’s Wakhan corridor now instead of CPEC to take a new trade route.

Quad and the Maritime Domain

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A significant association of countries to counter China’s growing hegemony in the high seas, called Quadrilateral Security Dialogue or Quad comprises of India, the United States, Japan and Australia. India has signed multiple logistic supply agreements with the other Quad countries and with France and Singapore too. The Quad countries conducted the Malabar naval exercises at the end of 2020.[1] The Asia-Pacific area is of growing concern due to Beijing claiming dominance in the South China Sea over the Paracel and Spratly islands, and paying no heed to the international maritime law and the UNCLOS agreements. The United States in retaliation sent its nuclear-powered aircraft carriers, USS Nimitz and USS Ronald Reagan for deterrence. Britain will also probably deploy a Carrier Strike Group this year led by the HMS Queen Elizabeth in the Indian Ocean with Germany possibly sending a frigate too.[2] India is also looking forward to promote the IPOI (Indo-Pacific Oceans Initiative) and SAGAR (Security and Growth for All in the Region) policies primarily along with Japan and ASEAN, and many other countries as well to facilitate better trade, risk mitigation and sustainable approaches of maritime transport.[3]

China’s hegemonic nature is of utmost concern to India regarding the Indian Ocean region, for several reasons. China has militarized islands in the Maldives and the Hambantota port of Sri Lanka. Beijing has secured a 25-year trade deal with Tehran to build railways, which reach the Indian-owned Chabahar port as well. In addition to that, China is eyeing the Chittagong port of Bangladesh which will secure its entry into the Andaman Sea, and Beijing’s trade route will then be able to bypass the American Malacca Strait route.

Trade War and Self-Reliance

The trade imbroglio between the United States and the People’s Republic of China is no breaking news as it has been a defining factor in their rhetoric. Donald Trump made it a point to keep blaming China for their economic hegemony and their pursuit of toppling the United States Dollar and replacing it with the Chinese Yuan and for the COVID-19 pandemic. A lot of actions were taken by both governments, like Washington banning the sale of Huawei products claiming cyber security reasons and the closure of the Chinese Consulate General in Houston by Beijing which was met with retaliation in the closure of the US Consulate in Chengdu. The United States decided to impose decoupling and massive tariffs on Chinese trade, despite the trade deficit with China rising from $1.6 bn to $28.3 bn.


Although it seems as that the Sino-US trade conflict will end horribly for both countries and similar effects will be seen in economies of other countries, there appears to be a silver lining for India. Since Washington has decided to bring trade with Beijing to a low level, chances are that the allies of the US would follow suit. This would mean that companies from the European Union will turn to other Asian countries for raw material, export and establishing industries. The top contenders for these companies will be Vietnam and India. But to make full use of this opportunity, India will need to make itself look as a lucrative and a strategic option for foreign direct investments. It will have to refine its manufacturing sector, stabilise labour policies and improve fundamental conditions of work. The extensive support from the Indian government for indigenous business and MSMEs under the Atmanirbhar or self-reliant rhetoric could play out very well for attracting foreign investments. The flipside to this is that the government may not make easy policies for multinational companies that want to open extensions to their global value chains in India. Also, India denied an invitation to join the Regional Comprehensive Economic Partnership (RCEP), which is a multilateral trade agreement among twelve Asian countries. The tightening of its foreign investment laws might create a protectionist economy image of India, which could repel foreign companies. Moreover, the recent farmer protests would add to the image of the unpredictability of the Indian market. Therefore, India will have to take care of these factors as well.

Change in the United States Administration

With Joe Biden having entered the presidential office from January 20th 2021, there will be massive changes in the administration, governance and the international community as well. The United States will continue to consider the People’s Republic of China as a geostrategic competitor, but the rivalry will be more of military, diplomacy and human rights and less of trade. The Biden government will probably understand how they may be able to use China’s Belt and Road Initiative (BRI) to their advantage. Considering Biden’s rhetoric for human rights, diplomacy and environment, Washington may put more pressure on China regarding the Taiwan and Hong Kong issue, where they will expect help from its strategic Asian ally, India.

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India in a New World Order

In the kind of world that has been built today, India will have to find its place. However sound India’s foreign policy may be, India will have to consider domestic issues and their impact on economic and diplomatic relations with other countries. The best position for India in this new Cold War is a form of non-alignment. Although this time, India is already on its way of becoming a global power, having fostered great alliances with countries all over the world. Delhi will have to be a swing power between Washington and Beijing, considering the geographic proximity to China and so it won’t be in India’s best interest to awaken the dragon. But any action by India for its progress could invite apprehension from China, which might work in India’s favour, as the Quad dialogues will forge a more powerful alliance. Most of the effects will be seen after the economic recovery of countries post-COVID-19.

  1. George & Justin Paul, “Year-Ender: India Read China’s Intentions In Ladakh Wrongly, Say Experts”, THE WEEK, 2020. [Last visited on January 23rd, 2021]
  2. Chawla, Shalini, “Mapping China’S Interests And Engagement In Afghanistan – The Sunday Guardian Live”, THE SUNDAY GUARDIAN LIVE, 2020. [Last visited on January 23rd, 2021]
  3. Rao, Udai, “The US-Led Quad Is Up And Running. Here’s What It Means For India – The Federal”, THE FEDERAL, 2020. [Last visited on January 23rd, 2021]
  4. Ibid
  5. Sakhuja, Vijay, “India Looks Beyond QUAD: Bats For A Sustainable Indo-Pacific Initiative”, THE ECONOMIC TIMES, 2020. [Last visited on January 23rd, 2021]
  6. Lewis, Sophia, “Does India Benefit From A Sino-US Trade Conflict? | ORF”, ORF, 2020.[Last visited on January 23rd, 2021]
  7. Ibid

1 Comment

Asawari Bahirat · January 25, 2021 at 12:34 pm

Well written article.

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