India's test in 2026 will be to remain Stable .. in a world of fissures
The phenomenon of interdependence without trust continues. India has shown that the path forward is not to retreat from the world, but to engage with a clear vision that prioritises national interest without abandoning global responsibility.
From the vantage point of New Delhi, 2025 was the year India truly tested the resilience of its ‘multi-alignment’ strategy, proving that a nation can indeed be a ‘friend to all’ while remaining beholden to none.
As the curtain rises on 2026, the global landscape resembles less a cohesive portrait gallery of national foreign policies and more a jagged mosaic of competing interests protruding into one another.
The stage reveals the world at an inflection point: Geopolitical turbulence, AI- and tariff-driven economic uncertainty, and climate urgency are all reshaping the global order.
For New Delhi, these developments are both challenges and opportunities to assert its role and promote its interests in a multipolar world.
For India, this year has been an object lesson in the dextrous statecraft required to manage an era of turbulence.
We find ourselves in an era defined by maximal interdependence and minimal trust — a world where cherished partnerships have turned transactional, strategic assumptions suddenly have asterisks attached and economic ties are a new source of leverage and coercion.
From the vantage point of New Delhi, 2025 was the year India truly tested the resilience of its “multi-alignment” strategy, proving that a nation can indeed be a “friend to all” while remaining beholden to none.
The defining geopolitical shock of the year arrived not from a traditional battlefield, but through the silent tightening of supply chains and the collapse of markets.
When China throttled the export of critical rare earth minerals in April, the ripple effects threatened the very heart of India’s “green transition” and its burgeoning electric vehicle industry; and when President Donald Trump imposed 50 per cent tariffs on India’s exports, the bottom fell out of the US market for most of India’s labour-intensive industries.
This was “weaponised interdependence” in its purest form, and trust was an evident casualty.
Yet, India’s response signalled a new confidence: Redoubling negotiations for free trade agreements with an impressive variety of partners, from the UK to New Zealand (and taking in the European Union and Oman in between), diversifying markets and extending support to exporters.
By fast-tracking the National Critical Mineral Mission and deepening partnerships with the “Mineral Security Partnership” (MSP) alongside the US and Australia, New Delhi demonstrated that strategic autonomy in 2025 is synonymous with supply-chain resilience.
On the economic front, the year was a study in contrasts.
While the return of protectionist rhetoric and negative tariff surprises from Washington created significant pressure on the rupee, India’s domestic fundamentals remained remarkably buoyant. India’s relatively stable fiscal trajectory stands out, though the much weaker rupee could lead to inflation from energy imports.
The enactment of the four long-awaited labour codes in November, and the potentially transformative SHANTI Act for nuclear energy private investment (though with worrying liability implications for the Indian taxpayer) the following month, the government underscored that it’s no longer waiting for global tides to lift our boat; it’s building a more nimble, “fortress-like” economy capable of withstanding external shocks.
Even as the IMF adjusted the timeline for the $5-trillion milestone to 2028-29, India’s position as the world’s fourth-largest economy — nudging past Japan this year — is a testament to a “golden period” of structural reform. We cannot be complacent amidst global turbulence, but we don’t need to be “tariffied” either.
India’s diplomatic calendar in 2025 further illustrated the art of the adept diplomatic embrace. Geopolitical instability underscored the fragility of the international system and highlighted the importance of multi-alignment.
New Delhi has deepened ties with the Global South while balancing relations with Washington, Moscow, and Beijing. The visit of the Russian President to New Delhi, occurring despite intense Western scrutiny, was a bold assertion of sovereign autonomy. It served as a reminder that India refuses to be a “spoke” in anyone else’s wheel.
Simultaneously, the 15th India-Japan Annual Summit in August and the launch of the Africa-India Key Maritime Engagement (AIKEYME) naval exercise signalled India’s intent to lead as a “vishwa bandhu”.
By positioning itself as the voice of the Global South at COP 30 in Brazil, India championed equitable climate action, demanding that developed nations move beyond targets toward the actual delivery of predictable support. India’s leadership in the International Solar Alliance gained traction, as global demand for clean energy surged.
Yet, India continues a tightrope walk: Coal dependency persists, even as solar and wind investments expand, reflecting the tension between growth and sustainability.
The world looks to India not just as a participant but as a leader in shaping a green future.
However, the most profound challenge of 2025 for many developing countries remained the “Digital Iron Curtain”. As global giants dominate the World Wide Web and the internet splinters into sovereign fragments, India has begun to pioneer a unique “tech-diplomacy” footprint.
By exporting the “India Stack” and linking the UPI payment network with partners from the UAE to Nepal, New Delhi is offering a democratic, transparent alternative to the opaque digital architectures of its rivals. In this low-trust environment, India has realised that providing public goods to the world is the most effective way to build the trust that traditional geopolitics currently lacks.
Technology has been a defining force of 2025, as AI accelerated its impact on labour markets and energy systems. India, with its vast IT workforce, is both vulnerable and poised to capitalise.
Automation risks displacing millions of low-skilled jobs, yet our IT sector and digital public infrastructure position us to lead in AI innovation. India’s push into AI innovation hubs and digital public infrastructure offers a pathway to global leadership.
At home, we must invest in reskilling, education, and inclusive digital ecosystems. The challenge lies in ensuring inclusive growth, preventing a widening gap between urban tech elites and the rural poor.
As we look towards 2026, the phenomenon of interdependence without trust continues. India has shown that the path forward is not to retreat from the world, but to engage with a clear vision that prioritises national interest without abandoning global responsibility.
The task is not simple: To navigate these inflection points with prudence, ambition, and inclusivity.
By choosing multi-alignment over binary allegiances, India has ensured that in a fractured world, it remains the most stable bridge across the fissures.
(courtesy 'Indian Express')
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