India should steer clear of binary geopolitical rivalries, think tank suggests

India should not be drawn into binary geopolitical rivalries and, instead, engage with China and the US on equal terms, trade think tank Global Trade Research Initiative (GTRI) suggested on Monday.

The suggestion came after China warned of retaliation against countries that cooperate with the US “in ways that compromise Beijing’s interests.”

The threat from the Chinese ministry of commerce comes as US President Donald Trump’s administration is reportedly planning to use tariff negotiations to pressure trade partners to limit their dealings with China.

China’s warning of retaliation against countries aligning with US efforts to isolate Beijing must be viewed through the lens of global supply chain realities,” GTI founder Ajay Srivastava said.

Most leading economies, including India, are dependent on China for industrial and consumer goods. It is embedded at every level of the global production hierarchy: tier-I (finished goods), II (intermediate goods), and II (parts and components).

The global economy relies heavily on China for critical inputs at the tier II and III levels. Replacing it requires building manufacturing capabilities from the raw material stage—an effort that no country has yet achieved at scale, Srivastava said.

“The US reported strategy to pressure its partners through tariff negotiations to limit trade with China ignores economic ground realities. Even the US cannot stop imports from China. The last trade war resulted in increase in the US trade deficit. For India, this presents both a caution and an opportunity,” Srivatava said.

“India must chart an independent course—strengthening its domestic manufacturing base and reducing critical import dependencies through targeted investment in deep manufacturing. It should also remain firmly committed to WTO-led multilateral trade norms and avoid actions that risk violating global rules,” he cautioned.

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.