Trump-Xi summit: India need not fear a G2 — yet

The Trump-Xi summit last week was watched with unease in India. The optics of the summit clearly highlighted China’s new status as Washington’s equal and a global superpower that cannot be contained. This drew unfavourable comparisons to India’s own position in the world, and aroused envy and self-flagellation among some quarters in India.

More specifically, there were Indian concerns about the possibility of a US-China G2 that relegates India to a lesser position in the international order, and of deals on trade and technology at India’s expense. Naturally, Indian observers also worried how Washington’s rapprochement with China will affect the dynamics of the US-China-India strategic triangle. But were these concerns from India justified? After all, similar concerns about the Trump-Xi summit in May proved heavily exaggerated, as the summit turned out to be much better for New Delhi than expected.

India’s concerns

India had four major concerns about the US-China summit. First, New Delhi was concerned about the emergence of a US-China G2 that would jointly manage both the world and the Indo-Pacific, and pressure other powers to comply with its decisions. Predictably, New Delhi also feared that such joint management might extend to India’s own neighbourhood, South Asia. Such Indian fears date back to US President Bill Clinton’s 1998 visit to Beijing following India’s and Pakistan’s nuclear tests — in the joint statement issued after that summit, Washington and Beijing appointed themselves the joint guardians of South Asia’s stability, to India’s fury.

Second, India was anxious that China and the US would make arrangements on key technological and trade issues, such as semiconductors, AI and tariffs. An understanding on technological issues would help the emergence of a US-China technological duopoly at the expense of technological late-comers like India. This would be a disaster for India because it would establish global AI rules without New Delhi, secure supply chains without guaranteeing their security for India and potentially undermine US-India cooperation in initiatives like Pax Silica, while a Trump-Xi deal on trade would marginalise India and put it in a weaker position in its own trade negotiations with both China and the US. 

Third, India was worried about the summit’s implications for the US-India relationship. US-China competition has been the glue of the partnership between Washington and New Delhi since the 2005 announcement of the seminal US-India nuclear deal. This competition greatly boosted New Delhi’s value for Washington and prompted the US to adopt a policy of “strategic altruism” towards India and help its economic, technological and military rise. The Xi-Trump summit potentially threatens this strategic logic and the US-India partnership it buttressed. It threatens to soften or even halt the US-China competition, with major potential consequences for India’s rise. To make matters worse, this US-China rapprochement comes during a period of serious strain in US-India relations, which has pushed New Delhi to further improve its relations with Beijing.

Finally, India feared that the US might give China major diplomatic concessions on issues like Taiwan. Such concessions might not affect India directly, but would weaken the US’s position in Asia among its allies and partners, and embolden China. The result would be a more assertive Beijing that would be much more willing to pressure and challenge India in South Asia and on their disputed border.

India’s concerns mostly unnecessary

So, were these Indian concerns justified? The answer is: mostly not. The fears of a G2 were unfounded, as Beijing and Washington did not coordinate their policies or reach agreements on key international issues.

The actual deliverables from the Trump-Xi summit were also limited. On trade, investment and AI, the two sides took some steps forward. However, these steps were relatively small, reversible and mostly focused on building the institutional infrastructure for negotiation rather than on achieving actual breakthroughs. Importantly, there were no substantial deliverables on major security and geopolitical issues and it seems there was little discussion of these, to New Delhi’s relief. Taiwan was discussed but remained a contested issue on which no understanding was achieved. Most importantly, the summit did not produce durable, enforceable agreements.

Beyond alleviating some of India’s concerns, the summit also had a major positive for New Delhi. The strategic stabilisation of US-China competition, which started about a year ago and was officially announced at the May summit, is good for India. An intense US-India competition would present great risks for India and expose it to difficult choices and pressures from Beijing and Washington. A New Delhi that has just thawed relations with China and is going through a difficult patch in the relationship with the US is not well positioned to handle a more intensive US-China rivalry.

Worrying signs

However, there were also some worrying signs for New Delhi in the summit. Most importantly, the summit signalled the emergence of a US-China bilateral format for regular engagement, a format that started with the May summit and is likely to continue with Trump-Xi meetings in Shenzhen and Florida later this year. By default, such a regular format excludes India and raises the chances of US-China cooperation to New Delhi’s detriment, and even of an eventual G2 in the future.

Similarly, regular meetings and negotiations increase the possibility of an eventual agreement on some of the critical issues between the two sides, especially trade. The extension of the trade truce and meetings in the coming months all point in this direction. Such an agreement will undermine the US-China rivalry, thus weakening India’s international position and its bargaining leverage in its negotiations with both powers.

In sum, India’s concerns about a Trump-Xi summit were mostly not justified. The summit produced neither a G2 between Washington and Beijing, nor major deals harming Indian interests. Contrary to the media buzz, the China-US competition is likely to continue as the two sides have not resolved the many issues that divide them and might be playing a waiting game with each other.

Nevertheless, the summit still raises worrying questions for New Delhi. Would the regular leaders’ meetings evolve into a bilateral format for cooperation that excludes India? Would this format produce agreements to India’s detriment? Of course, behind all this lurks the question of what the US-China thaw means for New Delhi’s relations with Beijing and Washington and its own place in the international order. The coming Trump-Xi meetings in Shenzhen and Florida are likely to make this huge question for India even more difficult to answer.

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