China’s nudge, a U.S. permission, an Iranian rapprochement — India’s

India faces a difficult diplomatic balancing act as escalating tensions involving Iran threaten its oil supplies and test New Delhi’s traditional neutral foreign policy.

The crisis also comes as China pushes for stronger cooperation within BRICS, the bloc that includes Brazil, Russia, India, China and South Africa.

Chinese Foreign Minister Wang Yi on Sunday urged closer coordination within the group. “We must step up to the plate, and support each other’s BRICS presidency over the next two years, so as to make BRICS cooperation more substantive and bring new hope to the Global South,” Yi said in Beijing during a press conference.

India has not responded to that statement yet.

U.S. protectionism in Trump 2.0 has triggered a resumption of ties between India and China, though the realignment has occurred without much aplomb, as both countries look to avoid antagonizing U.S. President Donald Trump.

But as the Trump administration choked economic lifelines by attacking Iran, Wang’s remarks suggested Beijing sees a stronger role for BRICS cooperation.

And yet, India has maintained a stoic diplomatic position. Experts told CNBC that this tightrope walk is tied to the nation’s disproportionate economic vulnerability – arguably greater than that of China, which has months-long reserves of critical minerals and oil, compared to India’s weeks-long reserves of crude oil and far fewer reserves of gas.

It, therefore, may not come as a surprise that India is the only founding BRICS member that has not condemned the attack on Iran. 

“India, notably, has taken a more pragmatic line — calling for dialogue and de-escalation rather than outright condemnation, even as Beijing appears keen to leverage the moment to question India’s diplomatic positioning within BRICS,” said Eerishika Pankaj, director at New Delhi-based think tank, the Organisation for Research on China and Asia. 

She added that if India were to abandon its multi-alignment approach and take a clear side, it could risk supply volatility, pressure on the rupee, and renewed fiscal strain from energy subsidies. 

India’s vulnerable position is only becoming clearer, with the government hiking liquefied petroleum gas (LPG) prices, rationing liquified natural gas (LNG), the rupee hovering around record lows and its benchmark indexes logging their worst week in over a year.