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The inevitable happened. Against all hopes that Narendra Modi’s bear hugs will improve India’s relations with the US President Donald Trump, comes the final axe of a 50% tariff on all Indian goods exported to the US. That’s disaster for trade relations worth 80 billion dollars. Indian industries - like textiles, leather goods, gems and jewelleries and shrimp trade - that flourish by exporting to the US will slump, having a major toll on India’s foreign exchange reserves and GDP growth.

There are several theories why Trump suddenly turned hostile to India. Some say Narendra Modi’s denial that the US did not intervene in bringing a ceasefire between India & Pakistan war – though Trump repeatedly said it did – angered the US president. Second reason is India’s refusal to stop importing oil from Russia which brought in the second 25% tax penalty in addition to the earlier blanket 25% tax on almost all other countries.

However, several American experts on geopolitics think that the India’s import of Russian oil was just an excuse. India is not as important to America as is Russia or China and the US president has done just that : dumped India in a bid to improve relations with Russia and China. US have put on hold its high tariff imposition on China. If US can improve its relations with China directly (or with some help with Pakistan) – America is heavily dependent on Chinese pharmaceuticals and critical minerals – then India can be disposed of. India was becoming important to the US because it wanted to use India as a foil against the growing powers of China. If the US and China can become ‘friends’ – the two biggest economies of the world – who cares for India?

Global diplomacy does not depend on predictability, but on interests. Trump’s apparent irrationality fits in fine with this rule: keep others guessing about your next moves. Trump is changing strategy: he is negotiating with Putin and if necessary he can dump Ukraine to gain a favour from Russia. With China, the US wants to change its ‘dual approach’: the two giant economies are dependent on each other; politically it is not wise to be hostile. Politically, it would be better to be neutral, and not hostile, to do better business. India, however much we might imagine it to be an emerging superpower, is a loser among the deep and uncertain geopolitics of the three economic giants.

India is now at the crossroads of global diplomacy and it needs to rethink its foreign policy. It has to explore new areas of trade and not be too dependent on the usual supply chains with the US. Efforts to patch up with China is on; Modi will soon  visit China for the Shanghai conference and move on to visiting Japan. Friendship with Russia is being strengthened. Russia’s doubts about India inclining towards the west by giving more Defence orders to the US need to be dispelled.

It is also time India goes deeper in to its structural reforms. Even senior civil servants now dare to come out into the open saying that India’s professed policy of encouraging ‘ease of doing businesses’ gets stuck in trivial government rules and regulations. Mrs. Indira Gandhi once defied American blackmail through its PL480 rules over importing wheat and made the country self-sufficient in food by implementing the green revolution. She had to face a host of criticism for bringing in this change. Similarly, in 1991 Narasimha Rao along with Manmohan Singh changed the Indian economy forever.

Now is the time for another economic revolution. Trump’s pain should teach us a lesson. India will bleed for the heavy tariff. It’s difficult to dream of becoming a super power without trade with America -even China will not do that. But while keeping on its negotiations with the US (in spite of the rebuff), India needs to discover  more supply chains, preferably with Latin America, Africa, the Far East and Australia.