Context

• India stands at a pivotal moment in its history, reminiscent of Vasco Da Gama's arrival in Kozhikode in 1498, which marked a transformational era in global trade.
• Today’s inflexion point is defined not by the search for maritime trade routes but by the reshaping of global value chains under mounting geopolitical and economic pressures.
• With India poised to become the world's third-largest economy, it faces a complex landscape where strategic foresight and adaptability will determine its future trajectory.

The Shifting Global Framework

• Decline in Globalisation
  • The post-colonial global order, often characterised by multilateralism and rule-based globalization, has started to erode.
  • This system, once predicated on a division between ‘donors’ and ‘recipients,’ is losing relevance, particularly as China has overtaken the United States in both manufacturing output and global trade share.
  • Institutions like the World Trade Organization (WTO) and the United Nations, foundational pillars of the global order, have seen their influence wane, evidenced by the U.S.’s gradual disengagement.
  • The COVID-19 pandemic starkly highlighted these fractures, exposing the G-7 nations’ self-serving scramble for medical supplies and deepening the sense of global disillusionment.
• Emergence of New Global Institutions
  • This unravelling order has left a vacuum that emerging institutions like BRICS are eager to fill.
  • The disintegration of the G-7 and weakening of the G-20 signal a broader diffusion of global influence, with new powers reshaping the global agenda.
  • Notably, the U.S. has begun to restructure its international posture through bilateral deals, forcing partner nations to recalibrate their policies under pressure, particularly in areas like tariffs and trade imbalances.

Asia’s Resurgence and India’s Opportunity

• We are witnessing the re-emergence of Asia as the world's economic centre, a return to historical norms disrupted only by the colonial era.
• Countries like China and Russia are increasingly asserting themselves, and Asia is projected to hold two-thirds of global wealth and power in the near future.
• Against this backdrop, India must act decisively to secure its place in this evolving order.
• India’s strategy should include capitalising on the WTO’s decline, much as China leveraged its WTO membership to fuel its own rise.
• Managing trade relations with both China and the U.S. will be crucial, balancing American pressure to absorb agricultural and energy surpluses with opportunities for deeper economic integration with China.
• Prime Minister Narendra Modi’s vision of an ‘Asian Century’ underscores the potential for India to spearhead initiatives such as an Asian common market, particularly as ASEAN grapples with internal challenges.
• India should also propose a fresh framework of cooperative engagement with both ASEAN and the African Union, whose combined consumer potential is set to surpass that of Western economies.
• This approach requires India’s diplomatic corps to innovate new principles of global governance, reflecting a more equitable world order.

Challenges, Opportunities and the Way Forward for India

• Addressing Historical Blind Spots
  • India’s historical foreign policy, rooted in balancing great powers rather than advancing strategic economic interests, has often prioritised diplomacy over trade and innovation.
  • While initiatives like the Bandung Conference and the Non-Aligned Movement were crucial in navigating Cold War politics, they offered little in terms of economic advancement.
  • India’s focus on United Nations diplomacy came at the expense of engaging in technological and industrial innovation, a gap that competitors have since exploited.
  • To correct this, India must make hard decisions to develop a national consensus across political lines, focusing on talent development, skills enhancement, and industrial strategy.
  • Rather than merely responding to global trends, India should aim to set them, seeking complementarities with China, ASEAN, and Africa as global value chains are restructured.
• Technological Imperatives and the Digital Frontier
  • India’s strongest card lies in its potential for technological leadership, especially in software development.
  • Despite past successes, India has faltered in maintaining its competitive edge, even as China has surged ahead in hardware innovation.
  • The global technological race, exemplified by Huawei’s advances and open-source AI models like DeepSeek, highlights the need for India to invest heavily in artificial intelligence, open-source platforms, and digital infrastructure.
  • Patents, rather than GDP, are increasingly seen as indicators of future prosperity.
  • Reducing energy costs, developing innovation ecosystems, and leveraging India’s vast human capital and data resources will be essential to establishing technological sovereignty.
  • A concerted effort to build the world’s leading language models and digital tools can position India as a formidable cyber power, echoing its historical role as a global hub of skilled production.

Conclusion

• India’s moment of reckoning has arrived. The global order is shifting from a Western-centric framework to a multipolar one, with Asia at its core.
• To seize this moment, India must break from its historical patterns of tactical balancing and embrace a bold, strategic vision.
• This includes rethinking trade and diplomatic engagement, investing in technological innovation, and crafting a new global governance framework suited to a more equitable world.
• By doing so, India can not only secure its rightful place in the new order but also help shape the contours of the 21st century.