Following World War II, the world was characterised by a bipolar sphere of influence, divided between the USA and the Soviet Union. With the collapse of the Soviet Union in 1991, the US remained the sole dominant power politically, economically and militarily. For decades, the world has mainly been unipolar, despite occasional frictions; the West, with the US and its allies, has had a profound influence and control over global affairs. Since the Trump administration imposed tariffs on various countries, the world has witnessed retaliation, new partnerships, alliances and shifts in international trade, bilateral relationships and global supply chains. Recent developments, including the military parade in Beijing, the strengthening of the relationship among India, China, and Russia; and India’s bold stance despite the trade tariff pressure, are indicative of a new world order.

The US-India trade dispute continues, with the US imposing tariffs of up to 50% on all Indian exports, effective August 27, 2025. Bilateral trade negotiations are currently stalled due to differences in agricultural and dairy market access. India’s Ministry of External Affairs has condemned the tariff as unfair and publicly stated a focus on self-reliance. To mitigate the threat of tariffs on the Indian economy, India has taken several concrete steps, rather than retaliating or succumbing to pressure from the US trade dispute. The Government of India is expected to include credit and liquidity support to ease working capital stress and protect exporters, especially MSMEs and labour-intensive industries such as marine, agriculture, jewellery, leather, gems, textiles, footwear and engineering, as they explore new markets. The Ministry of Commerce is expanding its target export markets in Africa and Latin America from 20 to 50, aiming to diversify exports and reduce dependency on the US market. The government of India has announced a significant tax reduction and rationalisation of the GST. The Reserve Bank of India is also offering support to specific sectors. India has not announced retaliatory tariffs and remains optimistic about resolving the issue through dialogue and negotiation.

India has reduced the GST on hundreds of goods to boost domestic consumption. India’s self-reliance initiative, such as the Production Linked Incentive (PLI) scheme, has been introduced in specific sectors, including electric vehicles and renewables, to reduce dependency on any single market. India, to maintain growth amidst increasing trade pressure, has decided to adopt a broader approach for global repositioning. India is also strengthening ties with China and Russia. The US trade tariffs have also led to changes in India’s foreign policy. India is now recalibrating its external policy. India is keen on building multipolar coalitions in response to the economic pressures and geopolitical one-sidedness of the Trump administration.

India has pivoted towards improving relations with China and Russia. The recent Shanghai Cooperation Organisation (SCO) saw the heads of India, Russia and China display their unity publicly. India is asserting strategic sovereignty while forging South-South partnerships in a multipolar world. The development on the global stage is a subtle indication of a gradually emerging power alliance. India is adopting a dual approach of alignment, maintaining relationships with the USA while strengthening ties with Russia and China. Although the relationship between India, China and Russia does not reflect a shared ideology, they are united by a shared purpose. They are drawn together by Trump’s policies towards India, including the imposition of punitive secondary tariffs. The US-India trade-off has led to a distribution of power rather than its centralisation. These developments represent not only a power shift but also indicate significant tectonic shifts in political, economic and military influence in an emerging multipolar world.