Published July 1, 2025 in Geopolitics • 10 min read • 
Audio available
This upheaval has been propelled by an uneven model of globalization that, while generating unprecedented prosperity for some, has also introduced new layers of insecurity and uncertainties – conflicts, pandemics, climate emergencies, etc – and by rapid technological integration that binds nations ever more tightly together even as it weaponizes trade, markets, and financial instruments.
There has been growing disenchantment with the UN and other post-Second World War institutions that have failed to adapt with time and no longer reflect the emerging international political and economic order. Trump has swiftly re-implemented and expanded his “America First” approach. New tariffs against trading partners worldwide signal a continued shift from multilateral trade frameworks towards bilateral agreements. Alliance relationships face renewed pressure as the US demands increased defense spending from NATO members and Asian allies, creating uncertainty about American security commitments.
The US administration’s reduced engagement with multilateral institutions – including the UN, WHO, and climate initiatives – has created leadership vacuums in international forums that other players are moving in to fill.
There is an accelerated trend toward a more fragmented, competitive international system characterized by great power politics, reduced institutional constraints, and a zero-sum game approach. This environment of flux creates risks and opportunities: heightened competition increases conflict potential through miscalculation or escalation, particularly in the South China Sea, while at the same time creating opportunities for imaginative diplomacy and new partnership configurations.
The emerging international system is defined neither by a return to Cold War bipolarity nor a continuation of post-Cold War American predominance, but by complex multipolarity with distinctive regional dynamics and issue-specific alignments. The most successful international actors will combine clear strategic vision with adaptability to rapidly changing circumstances, recognizing that the choices made during this period of realignment will shape international relations for decades to come.
In this volatile milieu, where the US seems poised to pivot toward a narrower, transactional foreign policy driven by competitive compulsions rather than stewardship of a world order based on shared values and principles, India finds itself advantageously positioned. Unlike nations deeply invested in preserving the status quo, India’s vital stakes lie more in seizing the openings created by the ongoing global churn.
India’s foundation for navigating these tides rests upon its political stability and flourishing, though at times cacophonous, democracy. A third consecutive electoral victory for the ruling National Democratic Alliance led by Prime Minister Narendra Modi in the world’s largest democracy not only signals widespread domestic approval of its governing agenda but also provides the continuity necessary to pursue bold structural reforms – be they economic liberalization, infrastructure expansion, or social welfare schemes – without the paralysis of political uncertainty. This democratic resilience comforts foreign investors and partner governments alike, assuring them that commitments made by India will be upheld and that ambitious development plans will be seen through.
In April 2025, India became the world’s fourth-largest economy, surpassing Japan, and is on a credible trajectory to claim third place by 2028. Its vast pool of skilled talent, competitive labor costs, and maturing manufacturing capabilities render it an attractive hub for companies seeking to diversify and derisk their supply chains. In an age when overconcentration in specific geographies – whether for semiconductors, pharmaceuticals, or critical minerals – has proven perilous, India’s scale and reliability offer a compelling alternative. India positions itself not merely as a source of low-cost inputs but as a partner capable of delivering advanced, trustworthy solutions across sectors from pharmaceuticals and electronics to green technology and digital services.
Yet India’s global strategy transcends mere economic calculus. It is guided by a principle of “strategic autonomy”, whereby India deepens relations with democracies and market economies that share its commitment to pluralism, rule of law, and respect for sovereignty, but without entangling itself in exclusive alliances that might compromise its freedom of choice.
India’s emphasis has been on a collaborative win-win model rather than a zero-sum game. This approach derives from the philosophy of Vasudhaiva Kutumbakam, a Sanskrit phrase meaning “the world is one family”, and a deep understanding of the opportunities and limitations presented by the current international environment.
This principles-based multi-vector approach has led India to play a leading role in flexible, issue-based coalitions, such as:
India’s leadership of the G20 in 2023 demonstrated its intent to contribute constructively to the changing global governance at a time when the elite grouping of the G7 is losing its dominance in dictating the international agenda. India does not seek dominance but relevance, so that it can influence outcomes in favor of a rule-based, inclusive, and development-oriented order.
India’s foreign economic policy also reflects a mature outlook toward a free trade regime based on agreed principles of non-discrimination and transparency. India has adopted a more open stance that favors market access. The approach aims to promote competitiveness while protecting sectors critical for sustainable and equitable growth. The decision to negotiate and conclude free trade arrangements that align with India’s national interest is accompanied by a willingness to engage in partnerships where mutual benefit is defined and agreed upon.
Within this framework, the India-EFTA grouping of Switzerland, Liechtenstein, Norway, and Iceland, which is not a part of the EU Trade and Economic Partnership Agreement (TEPA), is an example of India’s commitment to cooperative trade and business. Though TEPA represents only one aspect of India’s broader strategic vision, it underscores a shift toward a model that emphasizes balanced outcomes, investment-driven trade strategies, and long-term development. The agreement was concluded in March 2024 after extensive negotiations lasting 16 years, reflecting India’s ability to negotiate successfully with a long-term perspective.
India has positioned itself as a credible interlocutor that can speak for the Global South and advanced economies.
What distinguishes this agreement from conventional trade deals is its integrated approach. TEPA combines investment flows with trade incentives, ensuring that the benefits are not limited to tariff reductions but extend to job creation, technology transfer, and sustainable development.
With Europe, India has stepped up engagement at the EU level and with individual member states. We are the only country apart from the US with which the EU has established a joint Trade and Technology Council, reflecting mutual recognition of the importance of resilient supply chains, secure digital infrastructure, and collaborative research in cutting-edge sectors. Negotiations on a free trade agreement with the EU are underway, and a pact with the UK was concluded on 6 May this year, signaling the growing strategic importance Europe places on India as a partner for diversification, resilience, and innovation.
Though TEPA represents a broader shift in how India engages with the world, the real transformation lies in the way India has positioned itself as a credible interlocutor that can speak for the Global South and advanced economies. As a major economy that positions itself in the company of the Global South, India has shown a willingness to champion development-centric issues, from climate finance and equitable energy transitions to digital inclusion and debt relief. Its leadership in these areas is based on tangible policy action and capacity-building initiatives.
India’s response to global uncertainty also focuses on creating domestic resilience. We have invested in building a world-class physical and digital infrastructure, innovation ecosystems, and wide-ranging institutional reforms. These steps have made it easier to do business in India.
Domestically, India’s transformative agenda is exemplified by its digital revolution, which underpins the delivery of social welfare and public services on a massive scale. Through platforms like Aadhaar (a biometric identity system), real-time UPI (Unified Payments Interface), and the Unified Health Interface, India delivers subsidized food grains to 815 million citizens, free or heavily subsidized health services to 340 million, and microloans to 58 million small businesses.
This digital infrastructure has enabled the construction of 40 million affordable homes in the past decade, alongside record expansions in airports, metro networks, highways, railway lines, and educational institutions. India’s physical infrastructure growth is demand-driven, and loans are available to private players on a commercial basis and not through government subsidies. This has ensured efficiency and high quality at a competitive cost.
“Recognizing the limitations of an outdated multilateral architecture, in which the UN Security Council remains locked in a 1945 paradigm despite a quadrupling of UN membership, India advocates for institutional reform, including permanent Security Council membership for itself. ”
The “Make in India” campaign encapsulates the ambition to rejuvenate the manufacturing sector, reverse decades of deindustrialization, and foster homegrown innovation. Legal reforms that replace colonial-era penal codes with modern statutes and educational initiatives promoting instruction in regional languages and strengthening vocational training complement this industrial push. India’s startup ecosystem, now the third largest globally, attracts domestic and foreign venture capital and has led to innovations in fintech, edtech, biotech, and clean energy.
India’s rise carries with it an expanding set of global responsibilities. Recognizing the limitations of an outdated multilateral architecture, in which the UN Security Council remains locked in a 1945 paradigm despite a quadrupling of UN membership, India advocates for institutional reform, including permanent Security Council membership for itself.
In parallel, India leverages established bodies and new coalitions to shape global agendas. It is the founding force behind the International Solar Alliance, which promotes the deployment of solar energy in developing nations; the Coalition for Disaster Resilient Infrastructure, which champions infrastructure designed to withstand climate extremes; and the International Day of Yoga, which celebrates wellness and cultural diplomacy worldwide.
As a first responder to humanitarian crises, India has demonstrated its capacity and willingness to deploy naval assets for antipiracy patrols in the Gulf of Aden, dispatch medical teams and supplies during pandemics, and extend rapid relief after earthquakes in Turkey and Nepal or cyclones across the Indian Ocean. These actions signal India’s intent to translate its growing capabilities into contributions to the global public good.
India remains at the forefront of the global fight against international terrorism, having been a victim of this scourge for several decades. Cross-border terrorism, in all its forms and manifestations, constitutes one of the most serious threats to international peace and security. In the aftermath of the deadly terror attack of 22 April in Pahalgam (Kashmir), India responded firmly through Operation Sindoor by destroying cross-border terror infrastructure, setting a new normal in the fight against international terrorism.
In the economic domain, India urges the world to pursue the derisking of supply chains rather than wholesale decoupling. Its expanding manufacturing base offers companies the chance to diversify production, while its emerging semiconductor ambitions and robust digital infrastructure add layers of technological resilience.
Nearly 1,800 Global Capability Centers – multinational service and innovation hubs – operate in India, exporting high-value services across finance, technology, and research. These trends promise to reinforce its role as a lynchpin in reglobalizing economic networks.
Demographic dynamics further enhance India’s appeal. With many advanced economies confronting aging populations and shrinking workforces, India’s young, English proficient talent pool becomes ever more valuable. Recognizing this, India is exploring mobility arrangements to channel its human capital toward global opportunities, while ensuring that its own industries and research institutions benefit from the inflow of expertise and best practices.
India’s climate and sustainability credentials add another dimension. As one of the largest contributors to the UN’s Sustainable Development Goals, India has embarked on ambitious renewable energy targets, invested heavily in green urban infrastructure, and promoted sustainable agricultural practices such as nanofertilizers. Its experiences in managing large-scale welfare schemes digitally have lessons for other developing countries. India offers a model of development that seeks to harmonize rapid economic growth with ecological stewardship and social inclusion.
Underlying all of these endeavors is the role of India’s diaspora, a living bridge that amplifies India’s soft power, business linkages, and cultural outreach. From Nobel laureates to technology entrepreneurs, the global Indian community bolsters the nation’s visibility and serves as a conduit for ideas, investment, and goodwill.
Connectivity remains at the heart of India’s strategic imagination. By spearheading consultative, multistakeholder corridor projects – IMEC to the west, the Trilateral Highway and Chennai–Vladivostok route to the east – India aims to weave itself into the fabric of Eurasian trade and transit, bridging the Atlantic and Pacific largely over land.
India views its ascent as synchronous with the needs of a world in flux. Its political stability provides a haven for investments; its economic dynamism furnishes alternatives to over-concentrated supply chains; its strategic autonomy enables principled but flexible partnerships; its domestic transformation showcases the potential of digital governance, infrastructure expansion, and inclusive growth; and its diplomatic activism and idea leadership offer new templates for collective action on climate, health, and security.
As global volatility intensifies, India is convinced that its growing capacities and its willingness to shoulder greater responsibilities will make it a beneficiary of emerging opportunities and an indispensable architect of a more resilient, multipolar, and equitable international order.
Business leaders today should identify their points of leverage – be it public influence, economic power, or industry collaboration – to quietly but effectively push back against policies that undermine democracy, said...
Faced with the threat of trade fragmentation, many are now waking up to the true value of preserving a rules-based system of cooperation – and business can help defend it too, says...
Forward-thinking leaders proactively shape their external environment, turn uncertainty into certainty, and create substantial value in the process....
Audio available
The tech broligarchs have invested heavily in Donald Trump but are not getting the payback they bargained for. Do big business and the markets still shape US government policy, or is the...
Audio availableExplore first person business intelligence from top minds curated for a global executive audience