(UPSC GS Paper II – International Relations: Bilateral Relations, Neighbourhood, Global Order)
Context (Introdcution)
India’s foreign policy in 2025 exposed a widening mismatch between diplomatic ambition and global constraints, as economic coercion, great-power uncertainty, and neighbourhood instability diluted outcomes despite sustained high-level engagement.
Economic and Energy Security: Growing External Vulnerabilities
- Trade Coercion and Export Stress: The U.S. imposition of a 25% reciprocal tariff on Indian goods hit labour-intensive sectors like textiles, gems and jewellery, and seafood; Commerce Ministry data show these sectors employ over 45 million workers, amplifying domestic employment risks.
- Stalled Mega Trade Deals: Despite commitments, Bilateral Trade Agreements with the U.S. and EU remained unsigned, reflecting what WTO assessments call “new-generation protectionism” driven by domestic politics in advanced economies.
- Remittance and Mobility Pressures: Restrictions on H-1B visas weakened remittance flows, which RBI data shows contribute nearly 3% of India’s GDP and act as a stabiliser of the current account.
- Russian Oil Dependence: India imported over $50 billion worth of crude oil from Russia in 2025, cushioning inflation but increasing exposure to secondary sanctions, a risk highlighted by the International Energy Agency.
- Sanctions as Economic Tools: The U.S. surcharge on Russian oil imports exemplifies what economists term “weaponised interdependence”, where trade links are used for geopolitical leverage.
- Limited Economic Diversification: FTAs with the UK, Oman and New Zealand improved market access, but together account for less than 6% of India’s total trade, limiting their macroeconomic impact.
Great Power Relations: Alignment without Assurance
- Conditional U.S. Partnership: While defence interoperability continued, India faced trade penalties, confirming RAND Corporation assessments that U.S. partnerships are increasingly transactional rather than strategic.
- Reduced Strategic Salience: The 2025 U.S. National Security Strategy mentioned India narrowly in Indo-Pacific terms, unlike the 2017 NSS that described India as a “leading global power”, signalling diminished prioritisation.
- China Engagement without De-escalation: Restoration of flights and visas with China did not translate into LAC disengagement; the Ministry of Defence confirms that over 60,000 troops remain forward-deployed.
- Persistent Security Costs: Sustained border tensions have increased India’s defence expenditure to nearly 2% of GDP, crowding out developmental spending, as flagged by the Fifteenth Finance Commission.
- Russia’s Strategic Constraints: Despite strong optics, India–Russia summits yielded limited outcomes, reflecting Moscow’s bandwidth constraints amid prolonged conflict in Ukraine, noted by SIPRI.
- Strain on Strategic Autonomy: India’s balancing act faced limits as competing powers demanded clearer alignment, narrowing traditional non-aligned space.
Global Strategic Order: Declining Norms and Rising Uncertainty
- Erosion of Rules-Based Order: Global acceptance of ceasefire proposals in Ukraine and Gaza, criticised by UN experts, suggests weakening commitment to sovereignty and accountability.
- Multilateral Paralysis: UN Security Council deadlock and WTO dispute settlement paralysis reduced faith in rule-based solutions, as highlighted in UN Secretary-General reports.
- China’s Alternative Governance Push: China’s Global Governance Initiative reflects its attempt to reshape norms, particularly in development finance and digital governance.
- Shrinking Middle-Power Space: Think tanks like Brookings note that polarisation has reduced opportunities for bridge-building diplomacy by middle powers such as India.
- India’s Normative Ambiguity: India’s calls for UN reform lack an articulated blueprint for post-Western global governance.
- Values–Interests Tension: Balancing sovereignty, democracy, and strategic interests became harder in an increasingly transactional system.
Regional and Neighbourhood Security Challenges
- Persistent Terror Threats: The Pahalgam attack reaffirmed intelligence assessments that cross-border terror infrastructure remains intact despite earlier deterrence actions.
- Limited Diplomatic Support: Post-strike responses saw sympathy but not endorsement, reflecting IISS findings that states avoid endorsing cross-border retaliation.
- Political Flux in South Asia: Transitions in Bangladesh and Nepal reduced predictability; MEA reports indicate slowed project implementation and diplomatic engagement.
- Myanmar Instability: Elections under military supervision constrained India’s democratic outreach, limiting its Act East leverage.
- External Players in South Asia: Growing defence cooperation between Pakistan and third countries diluted India’s regional influence.
- Inconsistent Neighbourhood Focus: Experts argue India’s episodic engagement contrasts with China’s sustained economic presence.
- Structural Weaknesses in India’s Diplomacy
- Over-reliance on Optics: High-visibility summits did not translate into binding outcomes, reinforcing critiques of “performative diplomacy”.
- Weak Coalition Building: India struggled to mobilise collective responses, unlike smaller middle powers that leverage issue-based coalitions.
- Credibility Deficit: International scrutiny of domestic democratic practices weakened India’s normative leverage, as noted in V-Dem and Freedom House reports.
- Reactive Policy Orientation: Foreign policy responses often followed crises rather than shaping agendas.
- Underused Economic Statecraft: Trade, technology standards, and development finance were not fully integrated into strategic diplomacy.
- Communication Gaps: Ambiguity in official narratives affected credibility during security crises.
Way Forward: Expert-Guided Strategic Recalibration
- Economic Diplomacy at the Core: NITI Aayog and OECD studies stress aligning trade, supply chains, and technology partnerships with foreign policy goals.
- Diversified Trade Architecture: WTO data shows rising protectionism; experts recommend deeper FTAs with middle powers in Africa, Latin America, and ASEAN.
- Clear Strategic Signalling: Strategic analysts advocate defining escalation thresholds and red lines to enhance deterrence credibility.
- Neighbourhood First 2.0: ORF and IDSA suggest sustained infrastructure, energy, and connectivity investments to stabilise South Asia.
- Coalition-Based Multilateralism: Brookings recommends issue-based coalitions on climate, digital public infrastructure, and development finance.
- Normative Consistency: UNDP governance assessments underline that external advocacy gains credibility only when aligned with domestic democratic practice.
Conclusion
India’s foreign policy challenges in 2025 stem less from diplomatic failure and more from structural shifts in global politics. Strategic clarity, economic statecraft, and coalition-building are essential to convert engagement into durable influence.
Mains Question
- India’s foreign policy in 2025 highlights the limits of symbolism in a transactional global order. Examine the structural challenges involved and suggest a forward-looking strategy based on expert assessments.(250 words, 15 marks)
Source: The Hindu