A Washington–New Delhi Alliance Is a Perfect Storm Against China
As China’s trade with United States shrinks and its economic problems deepen, India’s trade and strategic ties with the U.S. are set to expand significantly.
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by James Gorrie
July 17, 2025
As China’s trade with the United States continues to diminish, Beijing is anxious to stabilize trade relations with Washington — and has done so, at least for a while. But how long will any trade agreement last if the Chinese regime continues to violate it?
The harsh reality is that the Chinese Communist Party (CCP) is aware of its precarious position. On the one hand, China desperately needs to stabilize its trading relationship with the United States. On the other hand, it can’t live up to agreements because it has to cheat on trading terms, as structural weaknesses prevail in driving the economy downward. As a result, the trust level between Washington and Beijing is low.
Lack of trust isn’t the only factor against China, of course. The Trump administration’s antipathy toward the Chinese regime as a strategic rival is well understood, and that’s unlikely to change. Furthermore, direct foreign investment is dwindling, and foreign companies are exiting China as quickly as possible.
Many of them are relocating to India. The list of companies choosing India over China is significant and has been steadily growing, even before U.S. President Donald Trump won a second term in office. In 2024, dozens of major companies, including Dell, HP, Intel, Samsung, LG Electronics, Nike, Hasbro, Blizzard Entertainment, Stanley Black & Decker, and many more, have already relocated their factories to India or plan to do so in the near future.
That trend isn’t likely to change, either. According to a 2024 survey by the American Chamber of Commerce in China, 45 percent of U.S. companies in China have initiated plans to diversify their suppliers outside of China, while 38 percent are considering doing so. The writing is on the Great Wall of China: the trade gap is widening, not narrowing. Their days of leading the world in manufacturing and the strategic clout that comes with it are on their way out.
India’s Big Opportunity With the US
In the meantime, to Beijing’s great concern, India is strategically pivoting to fill that widening gap by expanding its trading relationships with the United States. The United States is equally intentional in steering trade away from China and toward India.
India’s intentions are aligned with those of the United States. In April this year, U.S. Vice President JD Vance visited India to establish a broader bilateral trade agreement between the two countries. The goal is to increase the current trade of $190 billion to $500 billion by 2030.
But the growing U.S.–India relationship extends far beyond trade.