‘US will have to continue to make concessions’
Market expert Manish Singh believes the most important lesson from this episode is clear: the balance of power is shifting.
“The biggest takeaway is that the US will continue to make concessions and that is very clear from what happened today. This cannot be taken as a victory for the US and I don’t mean in terms of any sense of competition between the US and China. It is just common sense that prevails that there are certain things that the US cannot do or that it is not good at and that the country will have to make a deal and show China how to negotiate as an equal,” Singh said.
He added that while India is not yet in a position to negotiate as an equal power, the message for New Delhi is unmistakable:
“China has shown that if you strengthen yourself domestically and you have an alternative and you have other means to sustain yourself, then in due time you could negotiate with us as an equal… The US does not have all the strong cards that people think it has, because a lot has changed in the last 10 to 20 years.”
Will the US-China thaw make things tougher for India?
India has benefited significantly from global companies diversifying away from China, especially during the tariff wars that began under Trump’s first term. But if Washington and Beijing reach an agreement, will it jeopardize India’s supply chain advantage? “That’s a very good question and I think it might as well turn out to be true,” Singh said. “If you look at the reason why the American companies or the West withdrew from China, it was because of this impending war or the impending tariff war… It’s very clear that the US cannot win that.”
He explained that what is unfolding now is “subscription diplomacy”: short-term, renewable deals rather than large agreements.
“You get short-term agreements, the kind we saw yesterday, which I call subscription diplomacy, because you have a 12-month agreement that can be extended, the terms of which can be changed. It can be extended before the expiry of the term.”
Singh noted that such incremental deals could actually benefit emerging markets:
“If this becomes the base case that concessions will be made and deals will be made, then that is very good news for emerging markets, especially China and other countries. If this leads to more trade, then that is good news for everyone, including India.”
FII flows and Fed signals
Foreign investors have pulled out nearly ₹1.9 lakh crore from Indian equities in 2025, raising concerns about continued global risk appetite. But Singh believes the broader macro picture remains encouraging.
“If we look at the Fed’s decision yesterday or Wednesday, you see that the Fed has not yet decided where interest rates are… I believe the Fed is still going to cut rates in December and conditions will ease,” he said.
Despite the recent outflows, he remains optimistic about growth prospects.
“I’m extremely optimistic about growth. I think the Fed is wrong. Inflation is not a problem… For me, the de-escalation between the US and China will be very positive.”
Singh argues that the global economy is moving towards a “G2 world” – a term he uses to describe the interdependent coexistence of the US and China.
“I have never seen this as a war. I have written about how we are entering a G2 world where the US and China will have to coexist… The US does not have a strong hand and for me that is extremely positive because a lot of investments that have been withheld… will now start flowing again.”
Markets interpret this as de-escalation and not as a breakthrough
While markets initially showed a muted reaction to the latest talks between Trump and Xi, Singh believes investors are interpreting this as the start of a longer process – and not a sudden solution.
“I would say the market sees this as an ongoing deal. I mean, I don’t think the market really thinks there’s been a big deal,” he explained.
“What you’re really looking for is there has been a de-escalation, the path has been set to discuss things and come to an agreement going forward and that’s what’s happened. So what it’s done to the market is that the risk that had built up because of the deadlines approaching in November has disappeared, even if it’s for three or six months.”
According to Singh, China’s preparedness has given the country an edge.
“Make no mistake … they are experts. They expected this to happen. When the tariff war first started, they went back and started preparing for it and in seven years they will be winning,” he said.
He concluded that the reduction in uncertainty is itself positive for risky assets:
“I don’t see a sell-off in the market and any concessions and more concessions that may not be obvious on screen but appear in a statement will probably help the market. I think more concessions have been made.”
In short
The latest episode in US-China relations may not have produced a “big deal,” but for markets and policymakers it represents something equally valuable: a pause. For India, the message is to continue building domestic strength, remain flexible in global trade alignments and be prepared to play the long game in a world increasingly defined by negotiation rather than confrontation.
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