India 2025: Turbulence and turmoil in foreign policy
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New Delhi faced multiple complex challenges in 2025. Donald J. Trump’s return to the White House did not deliver an expected fillip to the US-India strategic partnership. Instead, the relationship markedly deteriorated, as the President imposed high tariffs on Indian goods and disregarded longstanding Indian positions concerning Pakistan and the Kashmir dispute. A terrorist attack in that region spurred New Delhi into a brief conflict that ended unexpectedly poorly for India, with the military even more dominant in Pakistan’s domestic politics and Islamabad’s relationships with China, the US and Saudi Arabia stronger than before. Cautiously, New Delhi continued to stabilise India’s relationship with China, recommencing flights and the issuing of visas, but Narendra Modi’s government faced criticism at home and abroad for its approach to managing Beijing’s ambition. This article analyses India’s foreign policy in all three of these areas. In the last part, it turns to New Delhi’s testy relationship with Southeast Asia, where more might be done to balance China’s power and develop mutually beneficial economic and security ties, but where neither side perceives value in those endeavours.
Keywords – Indian foreign policy; Trump; United States; Pakistan; China; South Asia.
1. Introduction
As 2025 approached, prominent Indian analysts and newspapers argued that New Delhi had good reasons to be confident about the year ahead [see Hall 2025, p. 296]. They welcomed Donald J. Trump’s imminent return to the White House and argued that the US-India strategic partnership had grown stronger during this first term in office (US) [Madhav 2024, 8 December]. They hoped that Trump would make good on his promises to end the Ukraine war and pursue a rapprochement with Vladimir Putin’s Russia [Observer Research Foundation 2024]. More cautiously, they welcomed the deal done with China in October 2024 to restore some normality to the troubled Sino-Indian frontier, hoping that the bilateral relationship would soon stabilise and economic opportunities would return [The Hindu 2024, 23 October]. Finally, they observed that Narendra Modi’s government would have more domestic breathing space to manage the demands of foreign policy, with only two state elections due in the next twelve months [Bajpaee 2025, 9 January].
These predictions were soon confounded. From early in the year, India was battered by global turbulence and the Modi government’s foreign policy was left in turmoil. President Trump proved far less amenable than many had hoped, as he launched a trade war against India and undercut Indian interests elsewhere. Putin rebuffed successive American proposals for ending the Ukraine war, leaving New Delhi exposed to criticism from European states about the Modi government’s ongoing unwillingness to condemn Russia’s aggression and vulnerable to US sanctions arising from its ongoing purchases of cheap Russian oil. Moreover, India was unable to extract new defence or investment deals from the Russian president, despite a high-profile visit to New Delhi [Rosenberg and Pandey 2025, 5 December]. Meanwhile, Beijing was no more tractable than it was prior to the conclusion of the border patrolling agreement. Nor for that matter was Bangladesh, whose interim government clashed repeatedly with New Delhi and demanded the return of former prime minister Sheikh Hasina [Mallinder 2025, 23 November]. Finally, the Kashmir dispute returned to the fore, with the worst terrorist attack to affect civilians in India since the assault on Mumbai in 2008 and a short but messy conflict with Pakistan that left India less able to exert pressure on Islamabad than before.
Here and there, New Delhi did have some wins. India’s relationship with Canada was patched up following the resignation of Prime Minister Justin Trudeau and his replacement by Mark Carney, thanks to a fortuitously timed meeting of the Group of 7 (G7) in Alberta in mid-June to which Modi was invited [Choudhury, Dawar and Cheema 2025, 6 October]. In July, India signed an important trade deal with the United Kingdom (UK), renewed the bilateral Comprehensive Strategic Partnership and secured several other promising agreements [Jaybhay 2025, 16 September]. Modi was well received in Tokyo in August and Japan pledged some 10 trillion Yen (about US$ 68 billion) in new investment for India [Singh 2025, 7 September]. Throughout the year, the Indian prime minister and his foreign minister also took full advantage of the uncluttered domestic political calendar to travel widely. Modi went to twenty different countries and Subrahmanyam Jaishankar to more than thirty, including several that rarely see an Indian leader, like Ghana, Ireland, Namibia, and Trinidad and Tobago, and several regional states with sometimes troubled ties with India, like Maldives, Mauritius and Sri Lanka.
Nevertheless, the year was dominated by three foreign policy challenges: managing a strained relationship with the US; confronting threats from Pakistan; and recalibrating ties with China in ways that did not create new vulnerabilities. This article focuses on each of these challenges in turn, and in the final section, it looks at India’s relations with Southeast Asia, a strategically significant region where New Delhi might forge robust partnerships to offset China’s power and hedge against other risks, but where successive Indian governments have struggled to make headway. In the first part, the article analyses the causes and effects of New Delhi’s failure to assess the likely direction of the Trump administration’s India policy. In the second, it argues that India’s leaders mishandled the May conflict with Pakistan, exposing weaknesses in the coercive strategy they have employed for almost a decade to compel Islamabad to cease support for cross-border terrorism and insurgency. Concerning China, the article contends that the Modi government was more circumspect – and more successful as a result – despite ongoing tensions and deep mistrust in the Sino-Indian relationship. Finally, the article observes that New Delhi continued to underinvest in relationships with potential and established partners in Southeast Asia. Modi’s decision not to travel to the Association of Southeast Asian Nations (ASEAN) summit and East Asia Summit in Kuala Lumpur, Malaysia, in late October 2025 highlighted India’s persistent reluctance seriously to engage that region, despite talk of the deep civilisational ties and assurances about upholding ‘ASEAN Centrality’.
2. Tariffs and turbulence
Many countries were nervous about Trump’s return, India’s foreign minister Jaishankar observed a few days after the Presidential election in early November 2024, but ‘India was not one of them’ [Sebastian 2024, 11 November]. In his view, a strong personal rapport between Trump and Modi and the President’s appreciation of India’s importance had strengthened US-India ties during his first term in office. Trump understood India’s growing diplomatic and economic weight, Jaishankar argued, and appreciated the need to work together to manage China’s ambition, bilaterally and in forums like the Quad [Seli 2024, 5 December]. Others aligned with the ruling Bharatiya Janata Party (BJP) went further, predicting that with Trump back in the White House, the US and India would now combine forces to combat ‘radical liberals’ and ‘wokeness’, given what they saw as the ideological affinities between Trump’s Make America Great Again (MAGA) movement and the Hindu Right [Madhav 2024, 8 December]. Moreover, they looked forward to Trump’s promised assault on the so-called ‘Deep State’, which they believed had orchestrated an effort to tarnish the Modi government with accusations concerning human rights abuses, democratic backsliding, and corporate fraud [Dayal 2024, 7 December]. They acknowledged that Trump would likely cause New Delhi difficulties on trade, given India’s substantial US$ 45.8 billion goods trade surplus [Office of the United States Trade Representative 2025], immigration and perhaps climate change. And they recognised that the President’s transactionalism would require careful handling [Pathi and Sharma 2024]. But they assessed these challenges as manageable [Madan 2024, 5 December].
To lay the diplomatic groundwork for that management, Jaishankar went to Washington, DC, in late December 2024 for an unusually long six-day visit. He met with outgoing officials and with Mike Waltz, the Congressman whom Trump had recently nominated as National Security Advisor, and who was generally considered sympathetic to India [PTI 2024, 28 December]. The mission paid off: Jaishankar secured an invitation to Trump’s inauguration on 20 January 2025, which was interpreted as a positive sign for the future of the bilateral relationship [DD News 2025, 21 January]. A second invitation, this time for Modi to meet Trump in the Oval Office, was received soon afterwards, and the Indian prime minister became only the fourth leader to meet the newly sworn in President on 14 February [Bajpaee 2025, 11 February].
Yet by that point there were already indications that the relationship would soon encounter some turbulence. Just a few days before Modi arrived in Washington, DC, the new administration began a widely publicised series of deportations, flying illegal immigrants to their home countries, using the US air force [Hadda 2025, 10 February]. Some of the first flights went to India, including some to Modi’s home state of Gujarat, where the pictures of the chained and shackled detainees were met with a public outcry and ‘political uproar’ in parliament [Mishra 2025, 6 February]. In the meeting with Trump, the prime minister downplayed the issue, perhaps hoping that an emollient approach on immigration might assist with the effort to secure a good deal on tariffs, but to little avail. Modi came away from the Oval Office with big promises to boost bilateral trade and buy US arms, but no certainty about tariffs [Biswas and Inamdar 2025, 14 February]. The US and India continued to talk, but New Delhi was unable to head off the threat of punishment. On 2 April, Trump announced that the administration would impose a rate of 27% on Indian goods. Disappointed, New Delhi nevertheless persisted with diplomatic engagement, renewing a commitment to negotiate a trade deal in good faith [Ahmed, Kumar and Batra 2025, 4 April].
For a little while longer, the Modi government’s ongoing optimism about Trump’s return did not appear entirely unreasonable. On 22 April, Vice President J. D. Vance and his Indian-origin partner Usha Vance travelled to India, and some analysts interpreted the visit as a signal that the US remained equally committed to the bilateral strategic partnership [Chellaney 2025, 22 April]. Vance took the opportunity to encourage New Delhi to open India’s markets to US goods, but also argued that close cooperation was imperative, observing that ‘if we fail to work together successfully, the 21st century could be a very dark time for all of humanity’ [U.S. Embassy and Consulates in India 2025, 22 April]. The visit did not receive the coverage that it might, however, because on the same day Vance made these remarks, terrorists gunned down 26 civilians at a popular tourist destination at Pahalgam in Kashmir.
That attack is described in more detail in the next section, but it should be observed here that the crisis that followed had a significant impact on the Modi government’s relationship with the Trump administration. In the immediate aftermath, the US stood with India, as New Delhi has come to expect in recent years. Trump’s spokesperson pledged US support to India in its efforts to bring the perpetrators to justice [DD News, 2025, 23 April]. New Delhi likely took these remarks as a signal that the US would not stand in the way of military action targeting Pakistan and Pakistan-administered Kashmir. At first, this assessment appeared accurate. When India retaliated on 7 May, the President said that it was a ‘shame’ that matters had reached that point but went no further [Holland and Singh 2025, 7 May], while Vice-President remarked that an India-Pakistan conflict was ‘fundamentally none of our business’ [Singh 2025, 9 May]. But as the conflict escalated, parts of the Trump administration grew increasingly alarmed about the possibility of a wider war or even a nuclear exchange. As Pakistan readied and launched a series of ballistic missiles, and India responded with strikes on significant military targets, Vice-President Vance and Secretary of State Marco Rubio intervened, pressing both sides for a ceasefire [Yusef 2025, p. 17].
On 9 May, a dialogue between Indian and Pakistani military commanders commenced on a dedicated hotline, and a deal was struck to end hostilities. Before New Delhi and Islamabad could announce the ceasefire, however, Trump broke the news on social media, claiming that the US had ‘mediated’ the ‘long night of talks’ [Ravid 2025, 10 May]. The State Department followed up with a statement that confirmed that the US had ‘brokered’ the deal, adding that ‘the Governments of India and Pakistan’ had also ‘agreed…to start talks on a broad set of issues at a neutral site’ [U.S. Department of State 2025, 10 May]. These issues, according to another social media post from the President, included the status of Kashmir. ‘I will work with you both’, Trump promised, ‘to see if, after a thousand years, a solution can be arrived at, concerning Kashmir’ [Ethirajan 2025, 13 May]. Claiming once more that his intervention had brought the conflict to a close, he suggested that ‘millions of people could have died’ and implied that potential trade deals had been used a leverage in the talks [Joshi 2025, 16 May].
These posts delighted Pakistan, which moved quickly to credit the President for brokering a ceasefire, welcome his pledge to meditate further talks over Kashmir, and eventually nominate him for a Nobel Peace Prize [Das and Greenfield, 2025, 13 May]. New Delhi was far less impressed. Trump’s comments appeared to jettison a tacit two decades-old commitment by the US not to challenge India’s long-standing position that the Kashmir dispute must be settled bilaterally, without third-party involvement [Congressional Research Service 2020, 13 January]. On 13 May, the Ministry of External Affairs reaffirmed that position but to little avail [Bhattacherjee and Haidar 2025, 14 May]. Trump persisted with his claim that he had brokered a ceasefire and his promise to convene talks to settle the Kashmir dispute. Matters came to a head in Canada in mid-June, where Modi and Trump were due to meet on the sidelines at the Group of 7 (G7) summit. The President’s decision to leave early and return to Washington, DC, led to the cancellation of that discussion, but Trump then called Modi and asked him to visit the White House on the way back to India. The President offered lunch and an opportunity to talk directly with Pakistan’s newly promoted Field Marshal, Asim Munir.
This gambit apparently angered Modi, who refused the invitation and further calls from Trump in the weeks that followed [Mashal, Das and Pager, 2025, 30 August]. New Delhi also released an unusually candid readout of the conversation, which included a point-by-point rebuttal of the President’s various claims:
Prime Minister Modi clearly conveyed to President Trump that at no point during this entire sequence of events was there any discussion, at any level, on an India-U.S. Trade Deal, or any proposal for a mediation by the U.S. between India and Pakistan. The discussion to cease military action took place directly between India and Pakistan through the existing channels of communication between the two armed forces, and it was initiated at Pakistan’s request. Prime Minister Modi firmly stated that India does not and will never accept mediation [Ministry of External Affairs 2025, 18 June].
In July and August, this rift between the two leaders and two countries widened still further. First, Trump announced that the US would levy an additional 25% tariff on Indian goods to penalise New Delhi for buying Russian oil and weapons [Yadav 2025, 31 July]. Second, the US unveiled a new deal to develop Pakistan’s oil reserves [Associated Press 2025, 1 August]. Third, the President said he would not travel to India for the Quad summit Modi had long been due to host [PTI 2025, 30 August]. Finally, the Trump administration issued an Executive Order imposing a US$ 100,000 price on the H-1B skilled worker visas that allow thousands of Indians to work in the US [Mogul and Liu 2025, 22 September]. These actions exposed the Modi government to further criticism at home and did little to encourage New Delhi to reconcile with Washington, DC, nor conclude a trade deal, despite repeated claims by Trump that one was imminent [Al Jazeera 2025, 1 September].
By the end of 2025, it was clear that the ‘Trump bump’ [Madan 2024, 5 December] to US-India relations that New Delhi had expected at the start of the year was unlikely to eventuate soon, leaving the future of the strategic partnership and initiatives like the Quad in doubt [Feigenbaum 2025, 4 August]. There was no sign that the Trump administration appreciated the logic or value of the strategic altruism that shaped the India policies of its predecessors, from George W. Bush onwards [see Vaishnav 2025, 16 July]. Instead, a coercive and transactional Trump used the strategic partnership as a source of leverage, to be used in pursuit of better terms of trade [Madan 2025, 24 September]. Worse still, the Trump administration appeared disinterested in engaging in full spectrum strategic competition with China and working with allies and partners like India to manage Beijing’s ambition. Its first National Security Strategy, issued in early December, made Asia a secondary strategic priority, focusing on economic competition with regional states more than on deterring military threats in the Indo-Pacific [White House 2025].
These statements, combined with Trump’s accommodating approach to Beijing and the language used by the President to describe US-China relations, were made with mounting concern in New Delhi. India has long feared a US-China entente or ‘Group of 2’ (G2) arrangement in which the US and China cut deals and set the rules without regard for others [Czin 2025, 25 November]. Such a ‘new model of great power relations’ [Zeng and Breslin 2016] would be welcome in Beijing but would likely relegate India to the status of a second-class regional power, with serious consequences for its political autonomy and economic trajectory [Madan 2022, p. 44]. Trump’s announcement on the eve of a meeting with President Xi Jinping in late November that the ‘G2 will be convening shortly’ was thus not well received in India [Mishra and Chaudhury 2025, 26 November]. It appeared to signal that the US was no longer interested in working with regional powers like India to compete with China and persuade Beijing to scale back its assertiveness. It raised yet more questions about the reliability of the US as a strategic partner and American commitment to India’s interests.
3. Strategic setbacks
The massacre at Pahalgam in Kashmir on 22 April was the deadliest terrorist attack targeting civilians in India in seventeen years. It was carefully planned to challenge New Delhi and to provoke a response. It took place at a popular tourist spot, undermining the Modi government’s arguments that Kashmir was now safe for visitors, thanks to controversial constitutional reforms and a hardline approach to security. The terrorists reportedly singled out non-Muslim men, in many cases sparing their partners and thereby ensuring that the details of the massacre were widely and graphically communicated to the media [Sharma 2025, 28 April].
In the immediate aftermath, India imposed various diplomatic sanctions on Pakistan, whom New Delhi blamed for sponsoring the terrorists. This included the unprecedented step of suspending the 1960 Indus Waters Treaty [Ministry of External Affairs 2025, 23 April]. But it was clear that military action would likely follow, given both the nature of the Pahalgam attack and past precedent, notably the 2016 Uri raid and the 2019 Balakot air strikes [see Sasikumar, 2019]. That action began on 7 May with a wave of strikes with artillery, drones, and precision-guided bombs on what India claimed were terrorist camps in Pakistan-administered Kashmir and Pakistan itself [Clary 2025, 28 May]. India labelled this attack ‘Operation Sindoor’ – referring to the vermillion paste applied to brides’ foreheads at Hindu marriage ceremonies and thus to those victims of Pahalgam recently married – and clearly conceived it as a standalone punitive measure, with no plans for further action. New Delhi made plain that Indian forces had been ordered to avoid military targets, signalling that it did not intend to engage Pakistan’s forces [Clary 2025, 28 May].
Within hours, however, Pakistan’s reaction forced India to abandon those self-imposed constraints. The Pakistani air force engaged its Indian counterparts at range and likely shot down two or three aircraft [Layton 2025, 17 November]. Their armies skirmished along the Line of Control in Kashmir and on 8 May, both sides attacked each other’s military facilities with various types of drones. Hundreds were launched on 9 May, while Pakistan readied and then used several missiles, firing at least one in the direction of Delhi. That weapon was intercepted by India’s air defences at Sirsa in Punjab, roughly 150km from the border and 250km from the capital, along with many others at other locations [Firstpost 2025, 10 May]. In response India escalated, attacking eleven Pakistani airbases with cruise missiles and air-launched ballistic missiles in the morning of 10 May [Layton 2025, 17 November]. The targets included one in Rawalpindi, near Pakistan’s army headquarters, and not far from Islamabad [Clary 2025, 28 May].
Seasoned analysts assess that India’s military prevailed in the conflict, despite the losses on the first day, demonstrating that it could quickly overwhelm Pakistan’s air defences while successfully defending Indian targets against Pakistani drone and missile attacks [Layton 2025, 17 November]. But this operational success was overshadowed by a series of strategic setbacks. The rapid and unpredictable development of this conflict from punitive strikes on non-military targets to large scale attacks using scores of drones and missiles alarmed foreign observers, prompted multiple diplomatic interventions by Saudi Arabia, the United Arab Emirates, and the United Kingdom, among others, and finally by the US. Both sides would have anticipated such intervention – after all, both have developed conventional and nuclear warfighting doctrines on the assumption that it would occur within a few days of the start of hostilities [see Ladwig III 2007; Hall 2014, pp. 366-367]. But following the two earlier episodes where India has carried out cross-border strikes, in 2016 and 2019, New Delhi had likely come to believe that any American intervention would respect India’s positions and interests.
In 2025, as we have already discussed, this did not happen. Instead, Trump embarrassed New Delhi by pre-empting the ceasefire announcement, suggesting India had agreed to third-party mediation over Kashmir, re-hyphenating India and Pakistan at least rhetorically, if not in policy, and trying to cajole Modi into a meeting with Pakistan’s army chief at the White House. New Delhi was clearly surprised and disconcerted by these actions, which undermined India’s ability to coerce Pakistan. Worst still, the conflict strengthened the hand of the military in Pakistan’s domestic politics, despite its manifest operational failures. The shooting down of Indian aircraft in the first hours handed the Pakistani military a clear propaganda victory, which was exploited to the full at home and abroad [Nazar 2025, 11 May]. The high-profile roles played by Chinese and Turkish weapons systems – including Chengdu J-10 fighters – seemingly vindicated the military’s close partnerships with both states. Finally, the decision of Pakistan’s army leadership, headed by Asim Munir, to quickly escalate the conflict to strikes on military targets with missiles and drones drew in third party invention before India could unequivocally demonstrate its military superiority.
For all these reasons, Pakistan’s army was able to claim victory – and this verdict was widely accepted by the Pakistani public. A poll conducted a few days afterwards found that no fewer than 96% of those surveyed believed that Pakistan ‘had won the war’ and 97% rated the army’s performance as good or very good [Gallup Pakistan 2025, 21 May]. A conflict that began with the aim of coercing Islamabad into abandoning alleged support for cross-border terrorism thus ended with the principal alleged backer – Pakistan’s army – in an even stronger position than before. And Pakistan’s military chiefs took full advantage, tipping the domestic balance of power even further in its favour, and away from the civilian authorities. Munir was elevated to the rank of Field Marshal [Hussain 2025, 21 May] in only the second such promotion in Pakistan’s history, was feted by Trump at the White House [Hussain 2025, 19 June], was given lifelong immunity from prosecution [Davies 2025, 15 November], and was made the country’s first-ever Chief of Defence Forces [Raza and Asad 2025, 5 December].
Internationally, the Pahalgam attack and the May conflict did little if anything to stall Islamabad’s ongoing effort to break out of the relative isolation in which Pakistan found itself after the discovery that Osama bin Laden had found sanctuary there after 9/11, despite India’s attempts to label Pakistan as a state sponsor of terrorism. During the year, Islamabad was able to reengage two important erstwhile allies, with a view to reducing its recent dependence on China. With the US, Pakistan won favour early in Trump’s second term by passing on intelligence about the whereabouts of an Islamic State leader responsible for a deadly bombing at Kabul airport in 2021 and leveraged this into a broader rapprochement, including lower tariffs on Pakistani imports [Rahman, 2025, 1 October]. Islamabad also succeeded in revitalising relations with Saudi Arabia, despite sustained work by India over more than decade to construct a strategic partnership with the kingdom [see Quamar 2023]. In September, Pakistan and Saudi Arabia agreed a mutual defence pact that committed the parties to aid the other in the event of aggression [Siddiqui 2025, 17 September].
Together, these developments relieved at least some the pressure India had been able to apply to Islamabad in recent years. They left New Delhi with fewer options for coercing Pakistan into abandoning its alleged backing of cross-border terrorism. The May 2025 crisis put the Modi government in an invidious position, facing a resurgent Pakistan convinced that a strategy of rapid escalation in response to Indian military action won out against the odds and able to call on new friends in Washington and Riyadh, as well as old ones in Beijing, to undermine New Delhi’s diplomatic agenda.
4. Caution and calibration
The Modi government was far more cautious in dealing with China than with Pakistan. Earlier some international analysts had suggested that following the conclusion of the border patrolling deal in October 2024, New Delhi would move quickly to normalise relations with Beijing [see, for example, The Economist 2024, 24 October]. This assessment proved over-optimistic, despite a series of meetings between foreign and defence ministers, national security advisors, and top officials in late 2024 and early 2025 [Levesques and Solanki 2025, 16 May]. Instead, the Modi government moved slowly – when it moved at all – to wind back various sanctions imposed on China after the Galwan crisis in June 2020. It calibrated its diplomatic engagement of Beijing, reflecting deep-seated mistrust of India’s northern neighbour, intensifying domestic scrutiny of the administration’s approach to managing the various challenges posed by China, and concern about the lack of balance in the bilateral economic relationship [see Pant and Mankikar 2024, 14 November].
In the end, the patrolling agreement did lead to a swift normalisation of Sino-Indian relationship. More than six months passed before India began once more issuing visas to Chinese tourists and businesspeople, in July 2025 [Master 2025, 23 July]. It took even longer before New Delhi approved the resumption of direct flights between China and India, which had been cut off in 2020 due to Covid-19, as well as the border tensions [Mollan 2025, 3 October]. In parallel, the Modi government dragged its feet about relaxing the strict rules on inward investment from China, despite calls from business lobby groups and respected think tanks [Singh and Ohri 2025, 18 July]. By the end of 2025, the major restrictions – especially the rule that inward investment from China must be screened by government – remained in place, and lifting them continued to be politically controversial. The ever-expanding trade deficit in China’s favour did not help matters. In the 2024-25 financial year, India imported from China goods worth US$ 99.2bn more than it exported across the northern border – a figure even more striking when one considers that India’s goods exports to China totalled just US$ 14.3bn, less than 13% of the total value of bilateral trade [Joshi 2025, 4 December].
New Delhi was equally circumspect in bilateral diplomacy with Beijing. Senior ministers met their Chinese counterparts and made verbal commitments to find ways to reestablish trust, but few deals were done [see, for example, Ministry of Foreign Affairs of the People’s Republic of China 2025, 21 February]. In August, Modi honoured a commitment to travel to China for a Shanghai Cooperation Organisation (SCO) summit, despite domestic criticism of the visit [Times of India 2025, 1 September]. New Delhi likely calculated that non-attendance would have been interpreted as an unnecessary snub to Xi Jinping and would have ceded fellow member Pakistan diplomatic space to shape the narrative about the four-day conflict in May. Certainly, the Modi government saw the SCO meeting as not just a chance for the Indian prime minister to talk directly with Xi, but also as a timely opportunity for some broader signalling, which it seized.
First, Modi stopped off in Tokyo for talks with his Japanese counterpart on the way to the summit, reminding Beijing that improvements in Sino-Indian ties would not come at the expense of others [Berkshire Miller 2025, 3 September]. Second, Modi held an apparently convivial conversation with Xi and Russian President Vladimir Putin in full view of the cameras, letting Washington know that India had options, should Trump persist with punitive tariffs and should the US-India strategic partnership falter [The Economic Times 2025, 1 September]. Third, after the SCO meeting, the Indian leader declined to stay on in China and attend a military parade commemorating of the 80th anniversary of the end of the Second World War, indicating to Xi that while New Delhi sought a more stable relationship, it would not hand Beijing such an easy propaganda victory [Bartlett 2025, 4 September]. Finally, India refused to endorse Xi’s overtly anti-Western SCO agenda, pointedly highlighting the need for a ‘multipolar Asia’ as well as a multipolar world [Bajpaee 2025, 1 September].
These diplomatic calibrations showed how uncomfortable the Modi government was with normalising the relationship with China, even as problems emerged in India’s relationship with the US. Throughout the year, it remained the case that India did not ‘want to need China’, as Tanvi Madan observed [Madan 2025, 24 September]. To be sure, New Delhi sought greater stability and predictability, a lower level of tensions on the border, and economic interaction that benefited India. But as Madan [2025] argues, the Modi government view that Xi’s China is a rival, a bully, and an aspiring Asian hegemon was unchanged, and so New Delhi continued to proceed with caution in engaging Beijing. It opened the Indian economy to more trade, investment and technology transfer only where it perceived that the risks might be managed and where the authorities might minimise the threat of future Chinese coercion. New Delhi walked a careful diplomatic line with Beijing, indicating a willingness to cooperate on some initiatives of mutual interest, but not at the expense of national security.
Critics inside and outside China argued this caution was more a function of weakness than wisdom, placing further limits on what New Delhi might do. The veteran Congress Party politician Jairam Ramesh, for example, went so far as to accuse Modi of ‘capitulating’ to Beijing and ‘cowardly kowtowing’ to his Chinese counterpart by going to Tianjin [The Hindu 2025, 2 September]. These critics urged that a stronger line be taken, not just in response to Beijing’s ongoing bullying of India, but also in reaction to China’s overt backing of Pakistan during the May crisis. Some of them recognised, however, that decades-long underinvestment in defence had undermined India’s ability to deter threats to its territory, citizens and interests [The Economic Times 2025, 2 February].
In parallel, scholars continued to debate the character and causes of India’s persistent «underbalancing» of China, given the border dispute, the broader geostrategic rivalry between the two, and strategic shocks like the Galwan crisis in 2020 [see inter alia Paul 2024]. In a notable intervention, Christopher Clary argued that India had underbalanced China before Galwan and that despite the Modi government’s view of Beijing’s intentions, it would likely continue to do so. In his assessment, successive governments had failed to devote ‘sufficient national resources’ to defence, allocate what it had ‘optimally against potential threats’, used resources efficiently, and secured sufficient foreign assistance to fill the gaps [Clary 2025, p. 878]. Clary conceded that the Modi administration did seek to ‘correct the balance’ to some degree after Galwan, albeit by taking some ‘steps that entailed greater risks toward other dangers’ [Clary 2025, p. 893]. But India was still forced into making concessions to China, including in the 2024 patrolling agreement, which has still not been made public, due to its ongoing relative weakness [Clary 2025, p. 893].
All this said, New Delhi’s calibrated approach to managing the bilateral relationship during 2025 suggests that India was willing and able to withstand at least some pressure from China, even as the US-India strategic partnership came under strain and as India’s corporate sector pushed for more trade and investment. But domestic political necessity, rather than enhanced capabilities, likely explains this resistance. The Modi government remained vulnerable to domestic criticism of its China policy, including its handling of the Galwan crisis, and keen to avoid any impression of weakness. It pushed back strongly against those who suggested that its foreign policy was less than robust [see, for example, DD News 2025, 28 July]. It boosted India’s defence budget by a record 9.5% for the fiscal year 2025-26 and argued that such investment showed how serious it was about tackling the threats India faced [Ministry of Defence 2025, 24 March]. But even with this increase, defence expenditure remained below 2% of Gross Domestic Product, while inflation, wages and pensions limited what could be spent on modernising the armed forces [Hooda 2025, 12 February]. Moreover, after more than a decade of BJP-led governments, India’s military remains chronically short of advanced fighters and modern helicopters, ships and submarines, offensive and defensive cyber- and electronic warfare capabilities, missiles and much more [Desai 2025, 9 April].
5. Underbalancing
One way that New Delhi might reduce the imbalance of power with China would be to forge stronger strategic partnerships with like-minded states in East Asia, including in Southeast Asia. Successive Indian governments have toyed with this idea since the early 1990s, but despite rhetorical commitments to ‘Look East’ and ‘Act East’, none – including the current administration – have pursued such relationships in earnest [see Grare 2017]. Instead, enthusiasm has waxed and waned in New Delhi, with only some opportunities taken up, and there has been a general tendency to fall back on vague and cliched expressions of common interests, shared values, and historical linkages. As a result, thirty years on from the first efforts made by both sides to forge stronger strategic ties between India and states in Southeast Asia, even long-established partnerships, for example with Vietnam, remain underdeveloped, while local perceptions of India remain mixed at best.
This situation did not improve in 2025, despite the difficulties New Delhi faced with the US, Pakistan, and China, the potential inherent in deeper and broader economic, diplomatic and security ties between India and Southeast Asia, and shared scepticism about the prospect of a China-led regional order [see Ho and Lee 2025]. Indeed, in some ways, things deteriorated. The free trade agreement (FTA) between India and the Association of Southeast Asian Nations (ASEAN), which came into force for goods in 2010 and for services in 2014, reemerged as a bone of contention. New Delhi has long been critical of the deal, pointing to the widening gap between ASEAN’s exports to India and the flow of goods and services in the other direction. While experts argue that the FTA is not to blame for this imbalance, since most bilateral trade is conducted outside its terms due to the onerous bureaucracy the agreement entails, it has become symbolic of what Indian governments have complained is an unequal economic relationship [Palit 2025, 21 July].
These tensions reemerged early in 2025, despite an effort by Malaysia, the incoming ASEAN chair, to reinvigorate ties with India, partly with a view to securing New Delhi’s support for a Malaysian application for membership of the BRICS grouping [Haidar 2024, 20 August]. This push had been signalled in August 2024, during Prime Minister Anwar Ibrahim’s State Visit to New Delhi, which produced an agreement to elevate the Malaysia-India relationship to the level of a Comprehensive Strategic Partnership, as well as pledges to boost trade and develop stronger security ties [Ministry of External Affairs 2024, 20 August]. To further these aims, Kuala Lumpur also agreed to ‘support and expedite’ the pending review of the ASEAN Trade in Goods Agreement, recognising New Delhi’s desire to see these talks proceed [Asia News Network 2024, 21 August].
Completing the review proved harder to achieve, however, despite several public pledges to finish the process by the end of 2025 [Times of India 2025, 26 October]. As the talks wore on, India grew more frustrated. A series of papers critical of the FTA were published by Indian think tanks, some calling the trade deal a ‘litmus test’ for the broader relationship between India and ASEAN [see, for example, Baruah 2025, 21 July]. Unnamed Indian officials briefed journalists that New Delhi was contemplating pulling out of the agreement altogether, in protest at what was characterised as ASEAN’s refusal to take India’s concerns seriously [Jayaswal 2025, 7 July]. This threat was not realised by the end of the year, despite the failure to finalise the review, but it highlighted a wider malaise in India’s relationship with Southeast Asia, as well as with ASEAN.
This malaise was laid bare in the latest State of Southeast Asia report produced by the Singapore-based Yusof Ishak Institute. Based on surveys of regional state elites, the report provides a useful annual snapshot of opinion. Year after year, however, it finds that India is not well-regarded in Southeast Asia as an economic or security actor. In 2025, India was ranked only the sixth most important strategic partner for ASEAN, after the European Union (fourth) and Australia (fifth) and just above South Korea. This score was admittedly higher than the one India attained in 2024, when it came ninth, but it must be noted that the improved ranking was a function of improved perceptions in the relatively marginal Southeast Asian states of Brunei, Laos, and Myanmar. In Indonesia, the region’s most populous state, Malaysia and the Philippines, India was ranked ninth, while in Vietnam, a long-established strategic partner, and in Thailand, it came eighth [Yusof Ishak 2025, pp. 36-37].
Indian politicians and analysts often argue that India’s lack of strategic clout in Southeast Asia is offset by ‘soft power’. They point to past cultural and religious ties between India and the region, observing the influence of writing systems, ancient epics like the Ramayana, and architectural traditions, as well as past trade in goods like cotton cloth [see Bajpaee 2022]. The evidence for this soft power is thin, however, and for its influence on foreign policy it is thinner still. The 2025 Yusof Ishak survey asked a couple of questions to try to gauge relative levels of soft power, and the results for India were not impressive. Only 1.6% of respondents said they wanted to live and work in India, compared to 17.6% for Japan and 5.5% for China. Only 3% said that India was their favourite holiday destination, compared to 33% for Japan and 6.7% for China [Yusof Ishak 2025, pp. 71, 73].
This lack of regard is mirrored in India, where there is a widespread view that most of the states of Southeast Asia and ASEAN itself are either geo-strategically irrelevant or under Beijing’s sway [Mohan 2025, 17 July]. Commerce Minister Piyush Goyal’s undiplomatic observation that some regional states belonged to ‘China’s B team’, made as tensions about the ASEAN-India FTA rose in July, neatly captured this view and did nothing to speed up the talks [Ganapathy 2025, 2 July]. In October, Modi’s decision to not to attend ASEAN and East Asia Summits in person, while likely motivated by domestic political issues and a desire to avoid an encounter with President Trump, reinforced the impression that New Delhi does not take the region as seriously as it does others [Joshi 2025, 4 November].
During the year, Modi played host to several key Southeast Asian leaders, including Indonesia’s Prabowo Subianto in January, the Philippines’ Ferdinand Marcos Jr. in August, and Singapore’s Lawrence Wong in September. India also reportedly moved closer to concluding a deal to sell BrahMos cruise missiles to Indonesia and Vietnam and talked more about the possibility of exporting the Akash air defence system to those states and the Philippines [Firstpost 2025, 23 December]. But tensions over the trade deal overshadowed India’s relations with the region and New Delhi was unable to overcome ingrained reservations about more substantive economic and security partnerships with Southeast Asian states, despite the troubles India was experiencing elsewhere.
6. Conclusion
There were few if any signs at the end of 2025 that the turbulence and turmoil that India encountered throughout the year were likely to abate in the foreseeable future. The US and India were still divided over trade [Nandi 2025, 24 December]. In Pakistan, the newly minted Chief of Defence Staff Asim Munir continued to consolidate the power of the fiercely anti-India military establishment [Ahmed 2025, 5 December]. Trust between Beijing and New Delhi remained fragile, at best, as a Pentagon report observed [U.S. Department of Defense 2025, p. 13], while India struggled to improve its standing in Southeast Asia.
In this context, it is perhaps not surprising that New Delhi looked to others, especially Europe. In December, it was announced that President of the European Commission Ursula von der Leyen and President of the European Council António Costa would be the guests of honour at the upcoming Republic Day celebrations and an EU-India summit would be held around the same time, with a view to signing a long-awaited free trade deal between the two [Trivedi and Haidar 2025, 21 December]. To some, the strategic logic of this move was compelling: ‘Europe is a reliable partner with strong technological capabilities, shared concerns about Chinese coercion, and a steadier foreign policy’ than the US [Crabtree and Chaudhuri 2025, 3 December]. But it is not yet clear that New Delhi will be willing to address longstanding European concerns about India’s relationship with Russia, democratic backsliding, labour laws, and what they see as inadequate protections for foreign investors and foreign intellectual property [Maddishetty 2025, 7 April].
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