By: Soumya Bhowmick and Arya Roy Bardhan
The following excerpt is from Chapter 6 — Global South in the Crossfire: Strategic Competition and Managed Interdependence of ORF Global Quarterly: Disruption and Recalibration.
The Global South is no longer a peripheral arena in United States (US)-China competition. Trade, technology, industrial policy, logistics corridors, and development finance have become instruments through which strategic rivalry is projected outward. For countries across Asia, Africa, and Latin America, the challenge is no longer simply how to engage Washington or Beijing diplomatically, but how to preserve developmental autonomy in an environment where great-power competition is restructuring markets, supply chains, and industrial choices.
India sits at the heart of this dilemma. Its relationship with China is economically consequential, politically sensitive, and strategically constrained. Bilateral merchandise trade remains substantial yet deeply imbalanced, with Chinese capital goods, intermediates, and processed inputs embedded across Indian manufacturing. Yet the relationship is no longer understood in New Delhi solely through a commercial lens. Since 2020, the security environment has hardened, prompting India to pay closer attention to how concentrated dependence in critical sectors can constrain autonomy under stress. The result is neither wholesale rupture nor effortless coexistence but rather managed interdependence under strategic competition: keeping commercial channels open where growth requires them, tightening guardrails where vulnerability is too high, and diversifying wherever feasible.
That wider logic is now visible across the Global South. Indonesia faces rising imports of Chinese steel and textiles that undercut its own industrialisation efforts, even as it remains dependent on Chinese investment in nickel processing. Vietnam, deeply integrated into China-linked electronics supply chains, is navigating pressures from both sides as US tariffs increasingly target Chinese content routed through third countries. Brazil contends with an influx of low-cost Chinese manufactured goods, particularly in autos and steel, while remaining reliant on China as its dominant buyer of commodities. South Africa, similarly, has experienced pressure on local manufacturing from Chinese consumer goods, even as Chinese demand sustains its mining sector. Each case differs in specifics, but the underlying dilemma mirrors India’s challenge of capturing the benefits of Chinese economic engagement without ceding industrial ground or strategic leverage.
The Global South has moved from the periphery to the centre of strategic competition between the United States and China. Learn more about why managed interdependence has become India's defining strategic question of the decade in ORF Global Quarterly: Disruption and Recalibration.