For example, Haier’s India division is exploring plans to cede 25–50 percent of its equity to local investors, and even state of the art Chinese manufacturers like Shanghai Highly Group are eyeing joint ventures with Tata’s Voltas under new, softer terms. In short, Trump’s “America First” tariffs have inadvertently persuaded Chinese firms that winning in India may be easier than winning back American consumers.

At the ongoing Canton Fair, Chinese exhibitors, squeezed by U.S. duties, are approaching Indian manufacturers with a simple pitch: let us sell your goods in America, and we’ll split the profit. These stories underscore the chaos in global commerce wrought by the tariffs. With Chinese exports to the U.S. taxed at 145 percent and Indian shipments only at 10 percent (soon to rise to 26 percent), Indian suppliers are suddenly seen as an attractive conduit into the American market This redirection of trade flows illustrates a much larger truth: in today’s highly networked economy, shocks in one country bounce through many others. Trump’s tariffs have added fresh strain to global supply chains already reeling from pandemic disruptions and geopolitical “friendshoring” trends.

For India, the effects are double edged. On one hand, the country may gain new investment and exports as Chinese firms seek footholds here. A flurry of recent reports – from local business media to international outlets – highlights Indians sensing an opportunity. U.S. pressure on China has made Indian markets more enticing; Mukesh Ambani’s Reliance Industries has been named as a bidder for Chinese appliance-maker Haier’s local unit This points to a larger recalibration: Western tariffs have injected fresh momentum into India’s long standing strategy of attracting foreign manufacturing. Some economists argue that India could become a beneficiary of the same supply chain realignment that earlier saw factories move to Vietnam or Thailand during Trump’s first term. Now, with Southeast Asia also feeling the tariff heat, companies are casting a wider net – and India is on that map.

On the other hand, this influx of attention does not simplify India’s geopolitical calculus. New Delhi must juggle its economic interests with deep strategic concerns. China remains both partner and rival: bilateral trade tops $100 billion a year, and Chinese imports are critical for India’s electronics, pharmaceuticals and consumer goods sector. Even after India banned many Chinese apps following a 2020 border clash, the two economies remained interwoven – as one analyst put it, their relationship is “cooperation amid competition,” with mutual interdependence playing “a crucial role in global supply chains and consumer markets”

In the wake of the U.S. tariffs, Beijing has a stake in maintaining stability. After the April 2025 Pahalgam terrorist atrocity in Kashmir – India’s worst in years – Pakistan was immediately under international scrutiny. Islamabad swiftly turned to Beijing: Foreign Minister Ishaq Dar phoned China’s Wang Yi to seek diplomatic backing and insist on a “neutral, transparent” investigation. Beijing, for its part, has called for de-escalation between India and Pakistan, supporting an impartial probe into the attack. Thus India finds itself in a familiar but delicate spot – balancing China’s role as both a commercial lifeline and a strategic counterweight to Pakistan.

On the security front, the Pahalgam attack has only hardened India’s stance. New Delhi responded by suspending the Indus Waters Treaty and ordering Pakistan’s diplomats to leave, moves that underscore the gravity of this crisis. But India cannot view Pakistan’s actions in a vacuum. Its own position in Asia hinges on keeping Chinese ties at least functional. In recent weeks, senior Indian officials have quietly lobbied Beijing to keep Islamabad in check and highlight Pakistan’s export of terror. This dynamic – China shielding its ally while simultaneously seeking good trade relations with India – adds yet another layer to India’s global game. The end result is that India must navigate a complex triangle of interests: major investments from cash rich China, strategic partnership with the U.S. and its democracies, and an adversarial Pakistan rattled by its own troubles.

It is in this context that Trump’s larger economic gambit must be seen: as an anachronism that backfired in a world built on international connections. His “reciprocal tariff” plan, famously packaged as a disruptive innovation, has actually repeated decades-old mistakes. The reality today is one of deep interdependence. Modern trade is less about entire finished goods crossing borders and more about international production networks. Roughly 60 percent of world trade is now intermediate goods – parts and components that cross multiple borders before becoming a final product. In such a system, slapping high duties on imports can boomerang. Raising import costs may even cost jobs if domestic manufacturers rely on those imports.

The liberal “China plus India” model of production in Asia is a case in point: India’s nascent tech and auto sectors often import semiconductors, panels and other inputs from China. A full breakdown in trade would crimp both economies. Indeed, global trade experts argue we are witnessing “the end of the centuries old doctrine of ‘mercantilism,’” because imports have become integral to export. In short, attempts to erect 19th century walls around 21st century economies tend to yield only economic self harm. (IPA Service)