In a whirlwind of diplomatic activity, Indian Prime Minister Narendra Modi is making waves on the global stage. With significant conversations with both Russian President Vladimir Putin and a planned visit to China, Modi is navigating complex geopolitical waters as trade relations with the United States remain tenuous.
Conversations with Putin
During a recent phone call, Modi thanked Putin for sharing updates concerning Ukraine amidst rising tensions following President Trump’s imposition of hefty tariffs. These tariffs, which have reached 50% on select Indian goods, are seen as a direct attempt to penalise India for continuing its purchase of Russian oil.
- High tariffs: The US has imposed a 25% tariff on Indian goods, bringing the total to 50%.
- Strategic Partnership: Modi and Putin reaffirmed their commitment to further strengthening India’s ‘Special and Privileged Strategic Partnership’ with Russia.
- Upcoming Summit: Modi invited Putin to New Delhi for the 23rd India-Russia Annual Summit later this year.
Visit to China
In a significant diplomatic thaw, Modi is set to visit China for the first time in over seven years. This upcoming trip coincides with the multilateral Shanghai Cooperation Organisation (SCO) summit, emphasising India’s intent to foster better relations with its giant neighbour.
- SCO Summit: Modi’s visit to Tianjin will occur on 31 August 2024, marking an important step in Sino-Indian relations.
- Regional Tensions: The meeting comes after a history of military confrontations along the disputed Himalayan border.
- Potential Outcomes: Talks could lead to improved business relations and a reduction of travel barriers between India and China.
Impact of US Tariffs
As the US raises trade barriers on Indian imports, the repercussions are being scrutinised closely. The Reserve Bank of India maintained its growth forecast for the fiscal year at 6.5%, indicating resilience in the face of external economic pressures.
- Estimated Exports: India’s exports to the US in 2024 are expected to be around US$81 billion.
- Economic Assessment: An expected 10% penalty for Russian oil could further complicate trade dynamics.
- Trade Relations: The breakdown of trade talks was attributed to disagreements over opening agricultural markets and the US’s stance on Russian oil.
This intricate web of conversations and planned visits illustrates Modi’s balancing act amid rising global tensions and trade dynamics. Given the stakes involved, only time will reveal the full impact of these engagements.