As the world steps into 2026, the international order presents a fragmented picture of clashing national interests rather than a unified gallery of cooperation. This inflection point, marked by geopolitical strife, economic uncertainties driven by AI and tariffs, and climate crises, offers India both significant challenges and a unique platform to cement its role in a multipolar world.
The 2025 Crucible: Multi-Alignment in Action
The year 2025 served as a rigorous test for India's foreign policy doctrine of multi-alignment. In an era characterized by deep global interdependence but shallow mutual trust, where partnerships have become transactional, India demonstrated that a nation can be a friend to all while being beholden to none.
The defining shocks came not from conventional warfare but from economic coercion. In April, China's restriction on rare earth mineral exports threatened India's green energy and electric vehicle ambitions. Later, President Donald Trump's imposition of 50% tariffs on Indian goods severely impacted labour-intensive exports to the US market. These acts of weaponised interdependence eroded trust but also galvanised India's response.
New Delhi reacted with strategic confidence, accelerating free trade talks with diverse partners like the UK, New Zealand, the EU, and Oman. It bolstered supply-chain security through the National Critical Mineral Mission and the US-Australia led Mineral Security Partnership (MSP). This proved that in 2025, strategic autonomy was synonymous with resilient supply chains.
Economic Fortress and Diplomatic Embrace
On the domestic front, 2025 was a study in contrasts. External pressures from protectionism weakened the rupee, yet India's economic fundamentals stayed strong. The government enacted the long-pending four labour codes in November and passed the transformative SHANTI Act for nuclear energy in December, signalling a move to build a self-reliant, shock-proof economy. India overtook Japan to become the world's fourth-largest economy, a testament to structural reforms, even as the IMF pushed the $5-trillion GDP target to 2028-29.
Diplomatically, India adeptly balanced its global engagements. The Russian President's visit to New Delhi, under Western scrutiny, affirmed India's sovereign autonomy. Simultaneously, the 15th India-Japan Annual Summit and the launch of the Africa-India Key Maritime Engagement (AIKEYME) exercise showcased India's role as a vishwa bandhu (world friend). At COP30 in Brazil, India championed the Global South, demanding concrete climate action and support from developed nations.
Tech Sovereignty and the Path to 2026
A profound challenge for developing nations was the emerging Digital Iron Curtain. As the internet fragments, India pioneered a democratic alternative by exporting its India Stack and linking the UPI network with countries like the UAE and Nepal. This tech-diplomacy aims to build trust by providing global public goods.
The relentless advance of AI in 2025 posed risks of job displacement but also offered India, with its vast IT sector, a chance to lead in innovation. The key domestic challenge remains ensuring inclusive growth and bridging the digital divide.
As we look ahead, the phenomenon of interdependence without trust persists. India's 2025 experience shows the path is not isolation but engaged, visionary statecraft that prioritises national interest without shirking global responsibility. By steadfastly choosing multi-alignment over binary alliances, India has positioned itself as the most stable bridge across the world's deepening fissures.
