India at the Crossroads

The year 2025 has become a stress test for India’s diplomacy with tumult over tariffs, energy, and shifting alliances. In fact, in succession, Washington imposed severe tariffs on Indian exports, Moscow booked a high-profile Putin visit to New Delhi, and Beijing began pressing for the restoration of the Russia-India-China troika. Meanwhile, Israeli assaults on Iranian nuclear facilities shook oil markets, and Saudi Arabia negotiated a new defence agreement with Pakistan, and the European Union made a major move into Central Asia.

These aren’t isolated incidents. Together, they shape a world in which disaster is the new normal. For India, the message is clear: strategic autonomy does not imply standing still. It now entails moving faster, making difficult choices, and shaping results before others do it for us. For Washington, however, the optics are more important than economics. India has emerged as the top customer of Russian crude, with Reliance Industries alone acquiring more than USD 33 billion since the Ukraine crisis began. The White House believes that size undermines its sanctions strategy. India responded swiftly. Officials referred to the taxes as “unfair, unjustified, and unreasonable”, emphasising that energy security, not politics, determines their oil purchases. The irony is that much of the Russian crude processed in India ultimately winds up in global markets, including Europe and the United States, in various forms.

For India, the question is existential: how to safeguard its right to energy choices while maintaining trading access to its largest export market. Even as Washington tightened the screws, Moscow extended an embrace. Foreign Minister Sergey Lavrov stated that President Vladimir Putin will visit India in December 2024. The symbolism is significant.

Under pressure from Western sanctions, Russia is reminding the world of its other friends, the most important of which is India. The agenda will be practical, not just symbolic. India desires sustained energy subsidies, technology transfers, and a reliable supply of defence parts. Russia wants India to publicly restate that it will not totally align with the United States.

This is where New Delhi’s diplomatic prowess will be challenged. A firm handshake with Putin may provide short-term benefits, but it risks greater retaliation from Washington. A lacklustre reaction will reduce India’s power with Moscow. The key will be to strike arrangements that give substance — cheap crude, defence co-production, access to essential minerals — without committing to alignment.

Moscow’s desire to restore the Russia-India-China (RIC) framework complicates matters further. Beijing has expressed cautious support, pointing out that India’s participation would give legitimacy to a multipolar Asian system.

For Russia, RIC weakens Western isolation and can strengthen the deprived Global South order. For China, it weakens the Quad. For India, the benefits are less clear. The shadow of Galwan still hangs over bilateral relations. Public trust remains poor. At most, RIC provides India with a discussion mechanism to manage tensions with Beijing while avoiding strategic encirclement. At worst, it may look like India is moving toward a Sino-Russian alliance just as it seeks to strengthen ties with Washington, Tokyo, and Canberra. The smart course is tactical engagement without strategic commitment – speak at the table while placing real bets elsewhere.

While the world was focused on Ukraine and Gaza, Central Asia quietly evolved. The Khujand Treaty between Tajikistan, Kyrgyzstan, and Uzbekistan resolved decades of border disputes. At the same time, the European Union held its first summit with Central Asia in Samarkand, promising USD 13.2 billion in infrastructural and digital projects.

This is a significant European entry into a region previously dominated by Russia and increasingly shaped by China. For India, the stakes are enormous. Central Asia has abundant energy resources and serves as a bridge to Eurasia. However, India’s access is restricted due to Pakistan’s rejection of transit routes. The solution lies in speeding Chabahar Port construction, advancing the International North-South Transport Corridor, and strengthening bilateral energy cooperation with Kazakhstan and Turkmenistan. If India delays, Beijing and Brussels will maintain their domination. No location more clearly demonstrates India’s weakness than the Middle East.

Israeli raids on Iranian nuclear sites in June 2025 sparked a global oil boom, with prices rising by more than 10% in a single day. India, the world’s third-largest oil importer, had immediate consequences: higher import expenses, inflationary pressures, and fresh stagflation fears.

Saudi Arabia and Pakistan signed the Strategic Mutual Defence Agreement (SMDA), which complicated matters even more. The pact requires both states to treat any attack on one as an attack on the other. For Islamabad, this is a diplomatic coup. New Delhi is concerned that new types of security leverage may be used against it.

India’s challenges are threefold:

* The urgency of Chabahar port’s development.

* Securing goodwill in Saudi Arabia and the Gulf, where remittances and oil supplies are vital.

* Strengthening its rapidly expanding defence and technological partnerships with Israel.

Geopolitics now stretches beyond oil and borders to finance and technology. The weaponisation of the dollar and SWIFT has pushed several governments to seek alternatives, ranging from China’s CIPS to regional clearing systems and cross-border digital currencies. India cannot afford to rely too heavily on a single financial route. Its greatest choice is dual hedging: promoting RuPay and the digital rupee abroad while remaining connected to Western frameworks.

Technology is even more crucial. The competition for semiconductors, artificial intelligence, and quantum computing is already reshaping power dynamics. Without significant investments in indigenous capabilities, India risks becoming a permanent technology taker.

Strategic autonomy in the twenty-first century will be determined by computing power rather than oil barrels.

These developments demonstrate why the traditional view of India as a “balancer” is no longer valid. Balancing implies passive equidistance. What India requires is to serve as a balancing pivot, remaining flexible while actively moulding outcomes. This means firstly adopting a Multi-vector diplomacy which should entail strengthening ties with the US while negotiating punitive tariffs, and reinforcing ties with Russia while exacting real concessions, and engaging in RIC negotiations without committing. Secondly, accelerating Chabahar, BIMSTEC corridors, and the maritime corridor in Lakshadweep and the Andaman and Nicobar Islands. Thirdly, ensuring economic resilience by promoting supply chain relocations from China, increasing food and fuel stockpiles, and diversifying export markets beyond the West. Fourthly, technological sovereignty, which entails significant investments in AI computing, semiconductor manufacturing, and open-source ecosystems, is an important factor. Lastly, defence modernisation should entail increasing capacity in cyber, space, and drone warfare while expanding Quad and I2U2 defence cooperation. The past year has reduced India’s flexibility while increasing its relevance. Washington’s tariffs, Moscow’s embrace, Beijing’s overtures, Central Asian movements, and Middle Eastern turbulence all point to the same conclusion: India is important because it is one of the few actors capable of engaging across borders.

The window, however, is somewhat narrow. If India acts boldly, hedging well, diversifying aggressively, and building in resilience, it can become more than a balancer. It can be a pivotal state, one that not only survives but also shapes what happens next. The world is moving quickly. For India, the choice is clear: turn now or risk falling behind.

Views expressed are personal. The writer is a columnist and political ecology researcher with prior experience as an ESG analyst