PM Modi's balancing act: Wooing Japan, resetting China ties, and navigating Trump's tariffs

Prime Minister Narendra Modi embarks on a crucial overseas trip this week, seeking to strengthen ties with China, Japan, and Russia at a time when New Delhi is grappling with the economic fallout of U.S. President Donald Trump’s steep tariff hikes.

Japan in Focus

Modi’s stop in Japan on Friday and Saturday is expected to be the centrepiece of the tour. It marks a chance to deepen cooperation on both trade and security within the Quad grouping, India, Japan, Australia and the U.S., seen as a counterweight to China’s growing clout in the Indo-Pacific.

“This will be an opportunity to launch several new initiatives to build greater resilience in the relationship, and to respond to emerging opportunities and challenges,” Foreign Secretary Vikram Misri said ahead of the visit.

Tokyo is already India’s most reliable economic partner in Asia. Japanese firms are set to invest 10 trillion yen ($68 billion) in India over the next decade, broadcaster NHK reported, with Suzuki Motor pledging about $8 billion in fresh investments.

Modi, calling the two countries “partners made for each other,” has highlighted collaborations in high-value manufacturing and critical minerals, areas where Japan can provide both capital and technology.

The visit is set to strengthen ties in trade, investment, semiconductors, clean energy, digital tech and defence. With $43 billion in Japanese FDI and projects like metro networks and the Mumbai-Ahmedabad bullet train, the partnership continues to drive growth.

China Reset

After Japan, Modi will head to China for a Shanghai Cooperation Organisation summit beginning Sunday. His meeting with President Xi Jinping will be closely watched, coming four years after deadly border clashes froze bilateral ties.

The two nations are now exploring direct flights after five years, reopening Himalayan border trade, and easing investment restrictions. Beijing has also agreed to lift curbs on exports of fertilisers, rare earth minerals and tunnel boring machines to India.

While Washington wants New Delhi to serve as a counterweight to Beijing, analysts caution that Trump’s tariff squeeze could instead push India closer to China.

Russia and strategic balancing

On the sidelines of the China summit, PM Modi is expected to meet Russian President Vladimir Putin. With Moscow becoming an increasingly important energy partner, the Kremlin is seen as a steadying force in India’s multipolar strategy.

Trump has criticised India for buying Russian crude, despite the fact that such imports were never sanctioned. In fact, after the 2022 invasion of Ukraine, US officials tacitly encouraged purchases following the Group of Seven’s $60-per-barrel price cap, designed to keep Russian oil flowing while limiting revenue to the Kremlin.

Traditionally, India relied more on Middle Eastern oil and was not a major importer of Russian crude. However, it opted for discounted Russian supplies to manage domestic energy costs. New Delhi defended its purchases, describing Washington’s criticism as “unfair, unjustified and unreasonable.” While India has slightly reduced imports in response to US pressure, it continues to be a major buyer of seaborne Russian crude.

The Trump factor

Hanging over PM Modi’s diplomatic manoeuvres are Trump’s punitive tariffs, up to 50% on Indian exports, that threaten India’s manufacturing ambitions. While New Delhi continues to push for dialogue with Washington, Japan’s recent decision to cancel trade talks with the U.S. points at the turbulence in global economic ties.

By courting Tokyo, testing a reset with Beijing, and leaning on Moscow, India is looking at a delicate balancing act: leveraging new partnerships while keeping India’s strategic options open in a rapidly shifting world order.

With inputs from Reuters and Bloomberg