Trump tariffs: India should engage with both US and China, says GTRI

Trump trade war: Ajay Srivastava, founder of Global Trade Research Initiative (GTRI) has said that India must strategically engage with both giants - China as well as US and refrain from siding with any one of the two in the ongoing tariff war. India must follow the principles of global trade, rather than personal interests, Srivastava has emphasized.
A recent report by Chinese state media said that China will impose countermeasures in a ‘resolute and reciprocal manner’ against all those nations who will be seen as appeasing the US. The report also stated that the Chinese state is against any nation making deals with the US that goes against the welfare of their own nation (China).
Ajay Srivastava said, ”India should not be drawn into binary geopolitical rivalries. Instead, it must engage with both China and the US on equal terms--guided by strategic autonomy, economic interest, and global trade principles--not by external pressure.”
GTRI stressed that India must chart an independent course in this evolving landscape. This includes strengthening its domestic manufacturing sector and reducing reliance on critical imports by investing in deep manufacturing capabilities. At the same time, India should stay committed to the multilateral trade framework led by the World Trade Organization (WTO) and avoid actions that might contravene global trade rules.
India and the US are putting efforts in bilateral trade negotiations, which is expected to be done by fall 2025. Although the US has paused reciprocal tariffs on several countries, including India, those imposed on China remain intact. For now, a baseline tariff of 10% will apply to US imports from most countries including India.
GTRI also urged policymakers to assess China’s retaliatory stance through the lens of global supply chain dynamics. Today’s global economy remains highly dependent on China, not just for finished products, but also for intermediate goods and components that form the backbone of industrial production.
China plays a central role across all tiers of the global supply chain—from final goods (Tier 1) to intermediate (Tier 2) and raw components (Tier 3).
While the "China+1" strategy has helped some countries reduce dependence on Chinese-made finished goods, GTRI noted that replacing China entirely would require large-scale investments across the entire manufacturing ecosystem—a feat no country has yet achieved.
The think tank also criticized the US strategy of leveraging tariff negotiations to pressure trade partners into cutting ties with China, calling it disconnected from economic realities.
“Even the US hasn’t been able to curb its imports from China. The last trade war only widened the US trade deficit,” GTRI said, warning that India should approach the situation with caution, while also recognizing the strategic opportunities it presents.