The dramatic handshake on an Alaskan tarmac between US President Donald Trump and Russian President Vladimir Putin has left the globe’s diplomatic community reeling, but no one feels the ramifications more than New Delhi.
In an environment in which Bharat faces a punitive 50 per cent tariff from the Trump administration related to purchases of Russian oil, the events in Alaska elucidate the contradictions in American foreign policy that could change US-Bharat ties forever.
Different Strokes for Different Folks
The Alaskan optics tell the story of American double dating that Bharat can no longer neglect. While Trump virtually rolled out the red carpet for Putin, who is under international warrants of arrest, Bharat confronts an economic penalty for making pragmatic energy decisions in the midst of a global crisis. The irony is remarkable, and we call it “The Alaska Contradiction,” ie, America punishes Bharat for buying Russian oil, while Trump is considering Putin’s proposals for further energy cooperation and the drilling rights in the Bering Sea.
This contradiction gets to the heart of Bharat’s strategic thinking. Throughout the Ukraine conflict, Bharat stayed the course of strategic autonomy, refusing to join Western sanctions and calling for dialogue and diplomacy. This measured stance, indicated by Washington as necessary for the broader US-Bharat partnership, now appears to have been optimistic naivety about American commitment.
Targeting Bharatiya Economy
The 50 per cent tariffs on Bharatiya goods depict more than just trade policy, they are economic coercion aimed to financially subjugate Bharat into a lesser role of American strategic planning. These tariffs are targeting sectors critical to Bharat’s export economy; i.e. textiles, pharmaceuticals, innovative technology services, and agricultural products; an economic warfare of sorts masked as policy. The message is unmistakably interpreted as American dictate or else bilateral economic consequences.
However, the Alaska summit shows just how selective this moral outrage is. When Putin offered greater trade of “energy, digital, advanced technology, and space exploration” with both economy and security breaches by the US, Trump heralded their three-hour discussion as “extremely productive.” Meanwhile, Bharat’s energy purchases of much smaller amounts, based on authentic economic necessity and energy security concerns, has been labelled a betrayal worthy of punishment.
Re-evaluating Policy
The conclusion of the summit compels Bharat to deal with some difficult truths about its relationship with the US. The touted “natural partnership” between the two largest democracies in the world, in fact, seems very reliant on Bharat’s willingness to give-up some aspect of its strategic autonomy. This realisation calls for a serious re-evaluation of Bharat’s behaviour in the context of great power competition. On the tactical side for Bharat, there are two significant elements: First, energy security is a key vulnerability. Given Bharat’s import dependence on energy, it is vulnerable to external pressure (such as suppliers, or third parties weaponising energy relationships). This was highlighted by the contradictory positions, with Russia and Bharat, although this conditionality strikes at the arbitrary nature of American energy geopolitics. Second, the Alaska summit highlights how personal chemistry that leads to demonstrated personal trust between leaders can seriously override stated principles of policy.
The immediate consequences of these tariffs on US-India trade will be catastrophic. The exorbitant American tariffs will effectively price Bharatiya goods out of American markets, forcing Bharatiya exporters to look elsewhere. These altered trading flows will have lasting impacts on the US-Bharat trading relationship even if tariffs are later lifted. Bharatiya pharmaceutical firms, which provide around 40 per cent of generic drugs to the American market, have a unique predicament. The tariffs are not only adding more costs to American consumers, but forcing Bharatiya firms to displace production and seek new markets. This calamity could reframe established global pharmaceutical supply chains and even lessen the American availability of affordable medications. The Information Technology(IT) sector, the linchpin of US-Bharat economic cooperation, has uncertainties of its own as well. While the tariffs likely will not directly impact IT, as IT exports are services and do not lose market share to a tariff, the damage is emanating from the larger deterioration in the bilateral relationship which has set the stage for the visa and regulatory regimes that are integral to international services and trade to reverse.
This summit is a clear triumph for Russia, seen more than a soft diplomatic rehabilitation. By creating a relationship with Trump while Bharat is penalised for Russia engaging at a much lower level, Putin is showing that Russia is able to maintain silos in relations while exploiting American ambiguity. The Bering Sea agreement to examine possible drilling rights could shift the energy balance in world markets. The implications of US-Russian energy cooperation, if it does happen, not only would directly contradict the sanctions modus operandi that the US pressures everyone else to maintain, but also create unprecedented geopolitical dependencies. Bharat could find that the diversification of its energy portfolio, which includes Russian imports, has become similarly problematic, but that American-Russian energy cooperation would routinely continue.
Need Strategic Response
Slapping counter-tariffs temporarily stays domestic political demands for action, but ultimately leads to a trade war that India cannot ‘win’ economically. Instead, Bharat should think about diversification of its trade relations. The EU, South East Asia, Africa, and Latin America are all dynamic markets, and as we established earlier, no markets will replace American markets today. But the need exists for alternatives in each of the above cases, even if they have not dampened the dependence on these trading partners.
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