H1-B visa crackdown, tariffs—India’s foreign policy towards US and China in 2025 | A deep dive | Today News

As 2025 drew to a close, India recalibrated its diplomatic engagements, making notable progress in repairing ties with China while navigating a turbulent relationship with the United States under the Trump 2.0 administration.

India and China ended 2025 on a cautiously optimistic note, taking steps to restore relations after more than four years of strain stemming from the eastern Ladakh border standoff.

In contrast, India–US relations experienced significant ups and downs throughout the year. The imposition of punitive and retaliatory tariffs, tensions following a conflict with Pakistan, and stricter US immigration policies placed unprecedented stress on bilateral ties, testing the partnership in ways not seen for decades, PTI reported.

Here’s a look at how India’s relationships with China and the United States evolved over the course of 2025.

With calm returning to the frontier, a key condition for India to rebuild ties with China, both sides intensified diplomatic engagement. National Security Adviser Ajit Doval and Chinese Foreign Minister Wang Yi, serving as the Special Representatives on the boundary issue, began efforts aimed at steadily improving bilateral relations.

During his visit to China in July, External Affairs Minister S. Jaishankar underscored the need for New Delhi and Beijing to build on the “positive momentum” in normalising ties, particularly to address border concerns such as de-escalation.

In August, Prime Minister Narendra Modi and Chinese President Xi Jinping met in Tianjin against the backdrop of tariff threats from US President Donald Trump, a context that helped shape a clearer trajectory for relations between the two Asian powers.

At the meeting, Modi and Xi reiterated that India and China were partners in development rather than competitors, and agreed that differences between them should be managed without escalating into disputes.

They emphasised the importance of “a stable relationship and cooperation” based on “mutual respect, mutual interest and mutual sensitivity” which is necessary for the growth and development of the two countries, as well as for a multipolar world and a multi-polar Asia, PTI reported. As Trump doubled down on China and India with tariff hikes, Modi underlined that “India and China both pursue strategic autonomy and their relations should not be seen through a third country lens”.

China's Xi Jinping is expected to visit India in 2026 for the BRICS summit, a move that could further accelerate the normalisation of bilateral ties, PTI reported.

The process of restoring relations began with the resumption of Indian pilgrims’ visits to Kailash and Mansarovar in Tibet. This was followed by reciprocal easing of visa norms and the restoration of direct flight connectivity between multiple cities after a hiatus of more than five years.

However, challenges persisted. China’s overt military backing of Pakistan during Operation Sindoor in May served as a stark reminder of how Beijing’s close ties with Islamabad continue to cast a shadow over its relationship with New Delhi.

Gen Singh said China’s strategy during Operation Sindoor was based on its ancient military strategy of "36 stratagems" and killing the adversary with a "borrowed knife" to buttress the point that Beijing extended all possible support to Pakistan to cause pain to India, according to a PTI report.

Thongdok alleged that during a transit stop en route to Japan on 21 November, Chinese officials detained her for nearly 18 hours after declining to acknowledge her Indian passport, citing her birthplace in Arunachal Pradesh.

New Delhi lodged a strong protest with Beijing following the incident. New Delhi also said that it expects the Chinese authorities to provide assurance that Indian citizens transiting through Chinese airports will not be “selectively targeted and harassed”.

China denied any ill-treatment while reiterating its claim on Arunachal Pradesh, which Delhi emphatically rejected, saying that the state remains an inalienable part of India.

Bilateral ties encountered another significant hurdle when China restricted exports of critical rare-earth metals to India, along with the United States and the European Union.

After months of curbs on rare-earth supplies—an area where China enjoys near-monopoly control—Beijing began approving selective export licences for the US, following an agreement with Washington to ease restrictions on semiconductor chips.

The Chinese curbs affected the manufacturing of Indian automobiles and other industries. Officials say China partially lifted curbs on India but not yet fully. Despite recurring bilateral tensions, India and China continue to engage in dialogue and exchanges to resolve their differences.

China is also actively pushing for the revival of the Russia, India and China (RIC) mechanism to jointly face unilateral policies being pursued by Trump to undermine globalisation.

Chinese Ambassador to India Xu Feihong in October said India’s exports to China surged 22% in the first half of FY 2025-26 vs last year.

Indian officials say the increase is very marginal and Beijing needs to open up more. In the first six months of this year, China’s exports to India touched USD 70 billion, an increase of 18.5% compared to the same period last year, PTI reported.

Despite these challenges, Prime Minister Narendra Modi's visit to the United States to meet US President Donald Trump, along with the signing of a 10-year defence framework agreement, emerged as key highlights of the bilateral relationship.

The year had begun on a positive note with Modi's trip to Washington, DC, in February for his first bilateral engagement with Trump during the latter’s second term in office.

Modi was only the fourth foreign dignitary - after leaders of Israel, Japan and Jordan - to meet Trump within weeks after his inauguration as 47th US President. The meeting encapsulated the strengthening US-India strategic partnership.

However, as the year progressed, the momentum in bilateral ties faced setbacks due to disagreements over tariffs and trade issues.

In his address to a Joint Session of Congress, Trump criticised India, along with other countries, for imposing high tariffs on American goods, marking the first of several statements he made throughout the year targeting India's trade levies.

While Trump described India as a "very high tariff nation”, members of his administration too did not hold back in their criticism, with his trade adviser Peter Navarro calling India the ‘Maharaja of tariffs’.

On April 2, which Trump proclaimed as ‘Liberation Day’, he slapped reciprocal tariffs on countries around the world and announced a 26% “discounted reciprocal tariff” on India, half of the 52% levies imposed by it on American goods.

However, Trump announced on various occasions that a trade deal with India would happen “soon”.

The United States and India achieved “significant progress” toward a mutually beneficial bilateral trade agreement during US Vice President JD Vance's visit to India, where he held extensive discussions with Prime Minister Modi.

During the visit, Vance and Modi announced the Terms of Reference for the US–India bilateral trade pact.

It was around the time that Vance was in India that a horrific terror attack took place on April 22 in Pahalgam perpetrated by The Resistance Front, a proxy of Pakistan-based terror group Lashkar-e-Taiba, in which 26 civilians were killed, PTI reported. In response, India launched Operation Sindoor to target terrorist infrastructure in Pakistan and Pakistan-occupied Kashmir. On May 10, the fourth day of the conflict, Trump abruptly claimed on his Truth Social page that the US had brokered a ceasefire between India and Pakistan.

Since then, Trump has repeatedly—over 70 times—asserted that he ended the conflict and leveraged trade to achieve peace.

In June, Modi and Trump were scheduled to meet on the sidelines of the G7 Leaders’ Summit in Kananaskis, Canada, but Trump returned to Washington early. The two leaders, however, held a 35-minute phone conversation on June 17.

Foreign Secretary Vikram Misri said that Modi clearly conveyed to Trump that at “no point” during the days following Operation Sindoor was there any discussion, at any level, on an India-US trade deal, or any proposal for a mediation by the US between India and Pakistan.

US lawmakers have criticised the tariffs imposed by Trump on India. Indian-American Congressman Raja Krishnamoorthi described the levies as placing an “unnecessary strain” on Washington’s ties with Delhi, PTI reported.

The Trump administration also tightened immigration policies, imposing stricter restrictions on both legal and illegal entry, including visas like the H-1B, which many Indian professionals rely on to live and work in the US.

Citing alleged abuses of the H-1B programme as a national security concern, Trump signed a proclamation introducing a USD 100,000 fee on new H-1B visas, sparking widespread alarm, confusion, and concern among Indian professionals.

Even as Washington and New Delhi dealt with these complications, there were areas of cooperation between the two sides that stood out this year.

Highlighting the strong counter-terrorism cooperation, the US extradited Tahawwur Hussain Rana to India to face justice for his role in planning the 2008 Mumbai terror attacks. Further, the US designated The Resistance Front as a foreign terrorist organisation.

In October, India and the United States signed a 10-year defence framework agreement, viewed as a “signal” of strengthening strategic ties, with Washington pledging to collaborate closely with New Delhi to promote a free and open Indo-Pacific.

Defence Minister Rajnath Singh and US Secretary of War Pete Hegseth signed the framework for the ‘US–India major defence partnership’ following extensive talks in Kuala Lumpur, as both sides worked to restore and deepen their bilateral relationship.

Despite challenges in bilateral ties, conversations between Trump and Modi underline the strategic importance of the relationship.

Modi recently said he had a "very warm and engaging conversation" with Trump, and they reviewed the progress in bilateral relations and discussed regional and international developments.

"India and the US will continue to work together for global peace, stability and prosperity,” Modi said.

Trump, who has described Modi as a “great friend of mine” and “a great Prime Minister”, has indicated he could travel to India next year. There is bipartisan consensus in Washington over the strategic and geopolitical importance of strong India-US ties.