An Indian High Wire Act

PRIME MINISTER NARENDRA MODI’S five-nation tour from July 2-9, unusually long for a leader given to catching up on sleep on a flight rather than add­ing an overnight stay, adds up to a seemingly eclec­tic choice. Modi’s travels will take him to Ghana, Trinidad and Tobago, Argentina, and then to Brazil for the BRICS summit that is a focal point of the itinerary. On the way back, the prime minister will visit Namibia which, in September, 2022, contributed five female and three male Cheetahs to begin India’s ambitious bid to repopulate its wilderness with the graceful feline hunted out of existence in the late 1940s.

It is no coincidence that Namibia and Argentina have signifi­cant reserves of critical minerals like lithium, graphite and copper and are also a focus area for China’s foreign policy. While Argenti­na is less known for rare minerals, its deposits in San Luis, San Juan, Cordoba, Buenos Aires and in the continental shelf can be extract­ed, making it a potential major supplier. Argentinean President Javier Milei, elected in 2023, and a strident critic of left-liberal politics, has spoken of developing rare earths and views this as a strategic opportunity. Namibia’s Lofdal deposits of dysprosium and terbium, being developed with Japanese collaboration, are used in magnets for electric vehicles and turbines and are integral to energy transition.

In the midst of the trade war with the US, China on April 4 im­posed export restrictions on several rare earth elements, potentially impacting auto makers, the aerospace industry, defence manufac­turers, and chip companies worldwide. China’s development of rare minerals has given it a dominant position with Baotou in Inner Mongolia home to 80 per cent of its reserves. With India launching an ambitious programme to promote electric mobility, access to these elements is a matter of national importance. Discussions in Namibia and Argentina are expected to explore the possibility of access to minerals while India offers technical assistance as well as cooperation in other fields. Many African nations, Namibia in­cluded, are interested in developing the Unified Payments Interface (UPI) that has powered India’s digital economy.

Ahead of Modi’s tour, External Affairs Minister S Jaishankar, in the US for a meeting of the Quadrilateral Security Dialogue (Quad) Foreign Ministers’ Meeting, conveyed an important mes­sage in the context of US President Donald Trump’s decision to host Pakistan’s Chief of Army Staff Field Marshal Asim Munir at the White House. India has the right to protect its citizens against terrorism and will respond to such acts without distinguish­ing between perpetrators and sponsors. More importantly, the minister added, India expects its allies and partners to under­stand its policy. Almost simultaneously, Defence Minister Rajnath Singh told his US counterpart Pete Hegseth that India reserves the right to pre-emptive action against terrorism.

The articulation was direct and intended to be so. India was not ready to put up with any hyphenation, rhetorical or other­wise, with a terror-sponsoring state. Before reaching Washington, Jaishankar inaugurated an exhibition in New York outlining the price India has paid due to terrorism. The event was intended to remind the world about Pakistan’s record as a source of terrorism and extremist ideology. The exercise was more than symbolic. With Pakistan due to take over the presidency of the United Na­tions Security Council in July, India’s focus on terrorism is timely and intended to etch out its red lines.

The agenda in Brazil, apart from the BRICS discussions expect­ed to take cognisance of terrorism and the April 22 Pahalgam at­tack, will see a bilateral focus in areas such as defence, agriculture, and health. The impressive performance of Indian air defence systems during Operation Sindoor has sparked an interest in Indian defence technology. In a world where uncertainties rule and inter­national conflict is unpredictable, windows of relative calm are crucial opportunities to build partnerships that insulate against sudden disruption and build resilience in defence, foreign policy and the national economy which are all linked.

The 12-day Israel-Iran conflict, which saw the US drop bunker-buster bombs on Iran’s nuclear sites, ended in a ceasefire but was a close call. If Iran had indeed enforced its threat to shut down the Strait of Hormuz, the impact on energy prices would have been immediate. As things turned out, the truce between Israel and Iran has held and oil prices are benign. India called for restraint during the hostilities but had little role to play and criticism that India should not have been ‘neutral’ is puzzling. Iran’s role in fuelling terrorism and instability in the Middle East as the prime backer of Hamas, Hezbollah and the Houthis does not help India’s interests in the region. Iran is, however, a counter to Pakistan and this is the primary driver of relations with Tehran.

NOW THAT ISLAMABAD’S ALLEGED cooperation with the US has come to light, Tehran is unlikely to forgive the perfidy in a hurry despite Pakistan’s covert nuclear assistance in the past. On the other hand, India’s cooperation with Israel is growing and based on closely shared views on geo­politics and terrorism. Israel’s military assistance in times of need has been quick and genuine. Just as it did when Russia invaded Ukraine, India is not ready to pick a bone in someone else’s fight. In media comments in the US—his second visit since early June— Jaishankar held out the possibility of the US-India trade deal be­ing concluded, but emphasised India must not be seen in terms of being for or against any bloc.

India’s diplomatic strategy in no small measure draws on its position as a stable and growing economy with an advanced indus­trial complex. India’s ability to retain its status as the world’s fastest growing economy is based on what the finance ministry’s monthly economic review of May describes as a “Goldilocks situation”, mark­ing the right balance between growth and inflation. “With no major imbalances in macro aggregates, a subdued inflation rate, a growth-supportive monetary policy stance, India’s macroeconomic health is in a relative Goldilocks situation,” says the report. The finance ministry acknowledges the Israel-Iran war was fortuitously short as its persistence would have threatened India’s fiscal and growth outlook. Agreeing that it is too early to sound an “all clear”, the report makes an important observation: “…we have to get used to doing the balancing act or the high wire act for some time to come.”

Officials familiar with India’s trade negotiations and relative strengths of the economy point out that India is quite self-suffi­cient barring its energy needs where it imports close to 90 per cent of its crude oil requirement. Despite imports of crude edible oils, it is largely self-sufficient in the farm sector as external sourcing of urea has declined. Despite several global disruptions since the Ukraine war broke out in February 2022, economic indicators for April and May show a resilient performance, with E-Way bill generation recording its second-best level in May 2025 at 122.7 million and diesel and petrol consumption reaching record levels as well. “This could primarily be attributed to increased leisure travel during the summer season, enhanced industrial activities boosting transport operations, and intensified agricul­tural irrigation efforts,” the finance ministry said.

Tractor sales rose by 9.1 per cent and two-wheelers by 7.3 per cent in early FY26. An above normal monsoon is good news though epi­sodes of extreme rains—increasingly frequent in recent years—can be damaging. The key, however, is the decline in inflation to 2.8 per cent and the sound health of the financial sector, with banks record­ing a non-performing asset (NPA) ratio of less than 2.5 per cent. This encouraged the Reserve Bank of India (RBI) to reduce the repo rate to 5.5 per cent in June, the biggest cut since March 2020. Reduction in the cash reserve ratio (CRR) is expected to inject `2.5 lakh crore of liquidity. Total exports, merchandise and services, in May registered a growth of 2.8 per cent year-on-year and though this seems modest, it points to resilience in the face of tariff uncertainties even if some transactions could be intended to beat Trump’s tariff deadlines.

Even as India pursues its singularly important relationship with the US, it is presenting itself as a reliable partner with growing ca­pacities in defence, space, agriculture, technology and financial markets paired with a significant skill base. Buffering itself against overdependence on any relationship, India is seeking mutual ben­efits in relations with middle powers like Japan, South Korea, In­donesia, Sweden, Germany, France, Italy, Brazil, South Africa, and Argentina, while also raising Global South issues at multilateral fora. As it casts it web wide, the importance of nations with a strong diaspora presence, such as the Caribbean community, Mauritius, Kenya, Nigeria, and Fiji, has seen India engage in development and climate change cooperation besides trade. Good relations with East­ern European countries helped India extract 22,000 Indian students from Ukraine. Relations with Central Asian countries has been a continuous dialogue, the latest edition concluded on June 6, and has yielded increasing tourist and trade contacts with Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan. India’s reputation in digital innovation, delivery of public services and financial management has provided new avenues for coopera­tion apart from agriculture, gems, textiles, and pharmaceuticals.

Indian diplomacy will face several tests in the coming months, confronting challenges at the UN while managing crucial bilateral relations. The absence of any reference to the Pahalgam terror attack in the joint statement at the Shanghai Cooperation Organisation’s meeting on June 27—which India refused to sign—could not have been possible without the active involvement of host China and underlines the challenges India faces from a ‘two-front’ situation even when there are no hostilities on the borders. It is telling that since 2020, India has had major military confrontations with both China and Pakistan which it countered by a display of political will backed by resources made available by a robust economy. The web of India’s global engagement has grown complex and varied in the last decade with linkages across trade, commerce, tourism, defence, culture, diaspora, science and technology, maritime con­tacts and energy. Picking a side or choosing not to will continue to be a demanding task since the pursuit of national interest can be misunderstood as opportunism or transactional behaviour. But a commitment to the global rules-based order, participation in shared responsibilities like peacekeeping and being a reliable partner are strengths India looks to leverage.

In its conduct of Operation Sindoor, India broke with the past in flexing its military muscles to strike deep inside Pakistan. Although Pakistan disputes India’s claims, the military capacity and discipline displayed by the armed forces reinforces India’s role as a regional power and underlines its indispensability in any conversation on global issues, whether climate change, reform of multinational institutions or the safety of international waterways.

anti-terrorism operationsdiplomacygeopoliticsNarendra ModiOperation SindoorquadS Jaishankar