As a new year begins, India finds itself at an inflection point in international relations that are being moulded by significant geopolitical changes, economic uncertainties and rapid technological advancements.
As the world’s largest democracy and the fifth-largest economy, India still holds the potential to shape the institutions of global governance while addressing domestic challenges. To fulfil this promise, the nation must skilfully manage the complexities of geopolitics, economic diplomacy, multilateral leadership and regional stability—all while striving to foster a stable and inclusive global order.
Relationships with global powers: In a quasi-multipolar world dominated by countries like the US, China and Russia, our foreign policy once again seeks to focus on maintaining strategic autonomy—a new nom de guerre for non-alignment—while fostering meaningful ties with them. India’s partnership with the US has somewhat cooled due to legal proceedings in US courts, as manifested by the recent attack by the BJP on the US state department, notwithstanding the shared interests, particularly in promoting a free and open Indo-Pacific to surmount the China challenge.
The Indo-US relationship has become an oxymoron. While initiatives like the Quad and on emerging technologies underscore collaboration, allegations linking Indian officials to controversies and differing views on Russia and Iran create brittleness.
With Donald Trump’s re-election, potential shifts in trade policies, along with unresolved issues like visa restrictions and market access for Indian IT firms, could introduce renewed uncertainties.
With China, post-Galwan tensions notwithstanding, the opaque disengagement, unresolved border disputes and a stark trade imbalance persist. Heavy reliance on Chinese electronics and pharmaceuticals imports complicates efforts to reduce dependence. Beijing’s expanding Belt and Road Initiative and a trade deficit exceeding $85 billion in 2023-24 challenge India’s regional ambitions, ensuring the China+1 strategy of global conglomerates means investment flows into India, and not to other Asian destinations.
The bond with Russia, underpinned by discounted oil over the past 34 months, endures Russia’s compulsions in cosying up to China and the emerging nuclear axis from East to West Asia; it will remain India’s biggest security dilemma in the decade ahead.
Expanding trade & investment horizons: Economic engagements in 2025 must leverage India’s market and technological potential to attract investments. While the potential is immense, several hurdles persist. As a large economy, India should remain a destination for foreign investors, an attraction that seems to be waning.
Trade agreements with nations like Australia and the UAE may reflect ongoing efforts to integrate into global value chains. However, paradigms such as UPI could be promoted as a secure platform for global financial transactions.
The transition to a green economy cannot go hand in hand with questioning the established consensus to restrict global warming to 1.5°C above pre-industrial levels.
Challenges, however, cloud the horizon as private investment remains sluggish, with net foreign direct investment hitting a 16-year low of $10.58 billion in 2023-24. Bureaucratic hurdles, high tariffs and a cautious approach to trade liberalisation evident in India’s withdrawal from the Regional Comprehensive Economic Partnership, have slowed progress. Stalled negotiations on free-trade agreements with the UK and EU add to these concerns.
While production-linked incentive schemes may have yielded some dividend, their inconsistent success raises profound concerns about the broader trajectory. Addressing these challenges will be essential to sustaining growth and cementing our position as a global economic powerhouse.
Leading on the global stage: The ambition to emerge as a global leader remains rooted in the push for reforms in multilateral institutions and advocacy for the Global South. As a non-permanent UN Security Council member, India may have actively contributed to counterterrorism efforts and climate action; however, in the past 10 years, there has been no progress on Security Council reforms, thereby making the desire for a seat on the high table a chimera.
In institutions like the IMF and World Bank, India champions greater representation for developing nations, emphasising increased funding for climate adaptation and disaster resilience to ensure equitable development. Initiatives such as the International Solar Alliance and the Coalition for Disaster Resilient Infrastructure underscore India’s role in sustainable development. However, partial convergence with the Global North on technology and geopolitical issues complicates its role as a voice for a unified Global South.
Engagement with BRICS and the Shanghai Cooperation Organisation underline the desire to make South-South cooperation its leitmotif. The inclusion of nations like Saudi Arabia and Iran in BRICS reflects the inherent contradiction in managing an acronym coined by the consulting firm Goldman Sachs back in 2001. Balancing these dynamics while addressing critiques of perceived inconsistencies will be essential for retaining its position as a voice of the Global South.
Navigating regional challenges: The efforts to ensure regional stability face hurdles amid strained relations with our neighbours. In Bangladesh, the ouster of Sheikh Hasina has intensified anti-India rhetoric and stalled joint projects, including cross-border rail and energy initiatives.
Meanwhile, political instability in Nepal and a pro-China government in the Maldives add complexity to the neighbourhood-first diplomacy. Bangladesh’s nascent overtures towards China and Pakistan signal a significant shift in attempting to reduce reducing India’s influence. Similarly, Chinese-backed infrastructure projects in Nepal have challenged India’s traditional dominance there. With Pakistan, the relationship remains frozen in mutual toxicity.
Building a stable and inclusive global order: India’s policy in the next 25 years should strike a balance between ambition and resilience. By advocating for reforms in multilateral institutions, championing the Global South and leveraging its economic strengths while ensuring that human developmental challenges at home are successfully surmounted.
A durable internal social cohesion is a sine qua non for strengthening India’s advocacy for an equitable world order.
(Views are personal)
(manishtewari01@gmail.com)
Manish Tewari | Lawyer, third-term MP, and former Union information & broadcasting minister