The Rise of SCO, BRICS, and China’s Emerging Hegemony Amidst Tariff Escalations and India’s Balancing Act: By Abia Fathima
- Chennai Centre for China Studies
- Sep 15
- 8 min read
The international order is experiencing a significant transformation, moving from a unipolar world led by Western nations to a multipolar world. The roles of the Shanghai Cooperation The global system is at its juncture of inflection, marked by the deepening strategic rivalry between the United States and a reemergent China. The global system for decades was based mostly on a unipolar system with the US at its pinnacle. This established system is slowly yielding to a more fluid and uncertain multipolar system, with China poised to create "a new democratic, fair, and rational international political and economic order". At the very epicenter of this fluid is India, a country whose emerging economic growth and booming diplomatic clout have established it as a central player. One of the world's most rapidly growing large economies and a key swing state, Indian foreign policy is a subtle and nuanced balancing act. It aims to preserve its strategic autonomy while, at the same time, negotiating the nuanced economic and security imperatives of its Washington, Beijing, and Moscow relationships. This report will initially review the tools of China's nascent hegemony: the SCO and BRICS, and afterward consider how US tariff tensions are forcing India to recalibrate its long-term strategy, a process fraught with daunting challenges and salient opportunities.
The Emergence of SCO and BRICS: Consolidating China's Hegemony
The Shanghai Cooperation Organization (SCO)
The Shanghai Cooperation Organization, an intergovernmental organization formed in 2001, has developed much more than the original mandate. Created by China, Russia, and Central Asian nations, the SCO originally concentrated on regional security, with key goals that involved a concerted effort against terrorism, extremism, and separatism. Since then, the organization has expanded its mandate to encourage widespread cooperation in the realms of politics, economics, and culture, and is now acting as an important platform for its members to advance a "multipolar world" and to resist what they see as Western hegemony.
With the addition of India, Iran, and Pakistan in recent times, the SCO's symbolic and geopolitical influence has increased enormously. It is generally accepted as a strategic platform for Russia and China to secure their regional presence and to establish a non-Western geopolitical platform. Its institutionalization has provided it with the power to take key decisions on regional matters in an overt attempt to "avoid Western interference". The request of the United States for observer status in 2005 was denied, highlighting the organization's determination to maintain its independence from Western influence.
One of the most important features of this shifting geopolitical policy is the symbiotic relationship between China's ambitious Belt and Road Initiative (BRI) and the SCO. The SCO offers a crucial security and economic platform for the BRI to revitalize ancient trade routes by building an extensive network of infrastructure across Eurasia. The SCO's emphasis on regional stability, counter-terrorism missions, and security directly safeguards the land routes and partner nations necessary for BRI success. At the same time, the SCO's economic cooperation efforts in areas like intergovernmental agreements on road transport as well as the ultimate objective of free movement of goods, capital, services, and technologies offer the policy and regulatory framework necessary to make BRI projects a reality. This is not a mere coincidence; rather, it is a deliberate and sophisticated strategy. By using the SCO to create a stable and economically integrated region, China is not only securing its supply lines across Eurasia but also positioning itself as the leader of a new, non-Western-centric world order.
BRICS Summit
BRICS has emerged as a parallel but distinct forum for political and diplomatic coordination among its members. Originally made up of Brazil, Russia, India, and China, which were joined by South Africa in 2011, the group has recently expanded significantly in 2024 to also include Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Its fundamental goals are to enhance economic, political, and social collaboration and enhance the global grouping of the Global South within international governance. The bloc aims at transforming global institutions like the UN, IMF, World Bank, and WTO to incorporate the growing influence of emerging economies.
One of the pillars of the BRICS model is the New Development Bank (NDB), a multilateral development bank formed by the founding members. The NDB is intended to finance infrastructure and sustainable development initiatives, mostly in the emerging markets and developing nations. Its President, K.V. Kamath has asserted that the NDB sees current institutions such as the World Bank and IMF as collaborators, rather than competitors. However, the NDB essentially provides a concrete, non-Western financing option, thus eroding the money monopoly of incumbent Western institutions.
The strategic importance of BRICS's recent enlargement cannot be overemphasized. By incorporating major energy producers and geopolitical actors such as Saudi Arabia and Iran, the bloc has significantly widened its international presence and common influence. This expansion supports the group's anti-unilateral Western-dictated sanctions and policies. Although BRICS' declared intention is to "democratize" and "balance" the world order, with the NDB's even voting and no country holding a veto, the coalition is dominated by its largest economic and political weight: China. The "BRICS Plus" strategy, for example, was introduced by China in 2017 to extend an invitation for non-regional nations to join. The recent enlargement, encompassing countries with strong economic and political links to Beijing, arguably makes China's voice louder in the bloc. This presents a scenario where an organization established to counter Western hegemony is, in many respects, being turned into an instrument for the hegemony of one member, thus concentrating power even as it aims to decentralize it.
India's Balancing Act Amidst Tariff Escalations
The US Tariff Offensive
In a sudden change in global trade policy, US President Donald Trump has threatened and implemented a series of confrontational tariff actions, including the levying of up to 100% tariffs on Chinese products and a 50% tariff on Indian products. The announced aim of these tariffs, specifically on India, is to put pressure on New Delhi to drop its imports of discounted Russian crude oil, which Washington sees as a central source of funding for Moscow's war effort in Ukraine. The original 25% tariff on select Indian products, tied to these oil imports, has already strained trade talks and pushed back a new bilateral accord.
This tariff strategy was designed to be a wedge, dividing enemies and pressuring allies into joining US foreign policy aims. The facts, however, indicate a contrary outcome. The impositions on India and China have inadvertently given rise to a strong incentive for these countries to co-operate and "work together." The common grievance has served to bring BRICS and SCO members together, who made a joint declaration at the Tianjin summit denouncing "unilateral and coercive actions that contravene the rules and principles of the World Trade Organization (WTO)". The US action has, in fact, consolidated the determination of the very "anti-Western" coalition which it aimed to dissipate. It is a fascinating instance of a policy gone wrong, which tested to the ultimate a profound misjudgment of a partner's resolve and the tangled dynamics of geopolitical stakes.
The Strategic and Diplomatic Response
India's reaction to this pressure has been marked by a subdued but resolute diplomatic stance. New Delhi has stood firm against coercive measures and hasn't given in to pressure to sacrifice its national interests, like halting discounted Russian oil purchases. India's External Affairs Minister S. Jaishankar has pointed to the nation's policy of "multi-alignment," or flexible, ad-hoc partnerships rather than binding, fixed alliances. The policy is meant to maintain India's strategic freedom in a splintered geopolitical order.
The recent SCO summit in Tianjin provided a critical diplomatic platform for India to demonstrate its independence. Prime Minister Modi’s engagement with President Xi, including a 45-minute one-on-one conversation without a translator, signaled a significant thawing of relations after five years of frigid ties. The two leaders agreed to manage their differences constructively and reaffirmed their commitment to being "development partners and not rivals". In a symbolic move, the Indian Prime Minister extended an invitation to President Xi to attend the BRICS 2026 summit which India will be hosting, a strong signal to Washington that New Delhi is prepared to venture into multilateral platforms outside of the West if needed. This fine-balancing act, though taken to task by some in the US, is a pragmatic approach which aims to diffuse tensions and advance national interests in a world full of uncertainty.
Implications of Tariff Hikes for India's Policy
Economic Vulnerabilities and Diversification Imperatives
The US tariff hikes have sharply highlighted India's deep economic reliance on China. India has a humongous and rising trade deficit with its neighbor, which swelled to $99.2 billion in financial year 2024-25, more than two times the $44 billion deficit for FY2020-21. This disparity is a reflection of India's extensive dependence on Chinese imports, especially for essential products. India imports 86% of its flat panel displays, 82.7% of its solar cells, and 75.2% of its lithium-ion batteries from China.
This trade relationship provides a double economic risk to India. On the one hand, US import duties on Indian goods like auto components and electronics create "strong headwinds" and retard decision-making and contract signing for Indian producers. On the other hand, China, which suffers from overcapacity and deflation, might inundate the Indian market with cheaper products, damaging local producers. China's strategic hold on global supply chains for key minerals such as lithium, gallium, and rare earths also gives Beijing a powerful tool for leverage, which can upend India's electric vehicle industry and defense technology manufacturing.
Challenges and Opportunities for India
Challenges
Despite the recent thaw in ties, India's relationship with China is still fraught. The military confrontation along the Line of Actual Control (LAC) is a lingering danger, with both countries actively developing infrastructure, such as India's new rail tracks and roads along the border. The essential divergence in their visions of the regional order: India's desire for a multipolar Asia where it is a key pole and China's quest for a single pole, will keep souring discord.
In addition, Indian foreign policy is a fine and much contradictory tightrope act. Its strategic and economic outreach to China and Russia via SCO and BRICS naturally contradicts its forging closer security cooperation with the United States and its allies via the Quad. This situation necessitates New Delhi to be always balancing cross-cutting interests. At home, Prime Minister Modi's government is aided by a hardline-on-China stance, which may constrain the government from making real concessions or embarking on a full-fledged rapprochement, even when it makes diplomatic sense.
Opportunities
In the midst of these pressures, the US-China competition and the attendant trade tensions pose an unparalleled chance for India to push its own national interests. The international movement towards supply chain diversification provides an opportunity for India to entice foreign investment and hasten domestic manufacturing goals. By standing out as a stable, democratic, and dependable alternative, India can attract multinational companies looking to "de-risk" away from China.
By taking an active part in BRICS and the SCO, India can consolidate its position as a leader of the Global South, promoting a fairer and more representative international order. This will improve its diplomatic leverage and reinforce its strategic autonomy in the international community.
The recent tariff pressures have also given a strong incentive to India to step up its drive for "Atmanirbhar Bharat" (Self-Reliant India). This involves a conscious plan of diversifying its defense ecosystem away from years of dependence on Russia by signing new co-production agreements with the United States and Israel. It also encompasses the development of domestic capacity in the key sectors of semiconductors and rare earth minerals, as a way to immunize the economy against future geopolitical shocks.
Conclusion
India's balancing act is not a short-term tactical response but an inherent strategic imperative in the present geopolitical context. The US tariff hikes, though generating immediate economic discomfort, have been a pressure point that compelled New Delhi to manage its intricate relationships proactively and reaffirm its adherence to strategic autonomy. By compartmentalizing its foreign policy engaging China on economic and multilateral planes while at the same time building security bonds with the West, India shows a mature and pragmatic way of practicing great-power politics.
The course of India's future foreign policy will be shaped by its capacity to ride out the inherent contradictions of such a multipolar world. The task is daunting, ranging from unsolved border conflicts to profound economic interdependencies and domestic political limitations. Yet, the possibilities to capitalize on geopolitical tensions, bring in investments, and create a more robust and independent economy are no less important. The success of India in achieving this will not only decide its own destiny but also contribute importantly to the making of 21st century geopolitics.
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