Why in the News?

Global institutions are weakening as U.S.-China rivalry intensifies and countries increasingly take unilateral trade and security actions. The U.S. has bypassed WTO dispute systems and imposed tariffs, while China has expanded trade ties and is now the top trading partner for over 120 countries. The North Atlantic Treaty Organization’s (NATO) role is questioned, and the United Nations (UN) faces decision-making paralysis. Despite tensions, India remains heavily dependent on Chinese imports. The post-1991 liberal global order is fragmenting, forcing India to rethink strategic autonomy, diversify trade, and build domestic capacity. These shifts directly affect India’s trade, security, and diplomatic space.

Introduction

India’s foreign policy evolved from Non-Alignment to strategic autonomy within a multilateral, rule-based global order. The emerging order is increasingly transactional, alliance-driven, and technology-centric. This requires recalibration of India’s external engagement strategy.

Why is Multilateralism Eroding?

1. Institutional Paralysis: Multilateral institutions such as the UN and World Trade Organisation (WTO) face decision-making deadlocks, reducing enforceability of global norms. The WTO dispute settlement mechanism remains dysfunctional.
2. Power Politics: Major powers prioritise bilateral leverage over multilateral commitments. The U.S. imposed unilateral tariffs despite WTO membership.
3. Alliance Fragmentation: NATO’s unity faces internal divergence. Strategic competition overshadows collective security objectives.
4. Economic Nationalism: Countries increasingly adopt protectionist measures. The U.S.-China trade war reflects departure from liberal trade principles.
5. Decline of Global Consensus: Consensus-based diplomacy gives way to issue-based coalitions and minilateral frameworks.

Is Strategic Autonomy Still Viable?

1. Cold War Origins: Strategic autonomy emerged through the Non-Aligned Movement to preserve decision-making independence amid U.S.-Soviet bipolarity.
2. Post-1991 Evolution: India retained autonomy while integrating into the liberal economic order, engaging the U.S., Russia, EU, BRICS, and Quad simultaneously.
3. Operational Example: India purchased the Russian S-400 system despite U.S. CAATSA pressure and did not choose the U.S. Patriot system, demonstrating independent security choices.
4. Multi-Alignment: Simultaneous engagement in Quad, BRICS, SCO, and continued defence ties with Russia reflect flexible alignment.
5. Shrinking Multilateral Space: WTO paralysis and UN gridlock reduce institutional protection for balanced positioning.
6. Capability Imperative: Autonomy is sustainable only if backed by manufacturing strength, technological capacity, and diversified trade. Strategic autonomy now requires material capability, not only diplomatic positioning. 

How Is Power Politics Reshaping Global Relations?

1. U.S.-China Rivalry: The U.S. CHIPS and Science Act (2022) restricts semiconductor exports to China; China advances “Made in China 2025” for tech self-reliance.
2. Economic Coercion: The U.S. imposed Section 301 tariffs on China; Russia was excluded from SWIFT after the Ukraine war, showing finance as a strategic tool.
3. Supply Chain Shift: The Indo-Pacific Economic Framework (IPEF) and “friend-shoring” aim to reduce dependence on China; Japan subsidised firms relocating from China.
4. Minilateralism: The Quad and AUKUS operate outside universal platforms like the UN, focusing on strategic coordination.
5. WTO Paralysis: The U.S. blocked Appellate Body appointments, disabling dispute settlement since 2019.

What Challenges Does This Create for India?

1. Trade Dependence: India remains significantly dependent on Chinese imports despite geopolitical tensions.
2. Reduced Legal Recourse: WTO paralysis limits dispute resolution options.
3. Technology Gaps: Dependence on external technology constrains strategic space.
4. Dual Security Pressure: Border tensions and regional instability complicate balancing strategy.
5. Development Linkage: External volatility directly affects growth ambitions.

India must therefore shift from reactive diplomacy to structured strategic positioning.

How Should India Reframe Its Foreign Policy?

1. Endogenous Capacity: Strengthens domestic manufacturing and technological capability.
2. Trade Diversification: Expands FTAs with EU, Africa, and emerging markets.
3. Technology Partnerships: Deepens cooperation in AI, digital infrastructure, and cybersecurity.
4. Pragmatic Regional Engagement: Stabilises neighbourhood relations through economic instruments.
5. BRICS Repositioning: Aligns BRICS toward economic coordination rather than political bloc identity.
6. Digital Currency Cooperation: Integrates official digital currencies to facilitate cross-border trade.
7. Viksit Bharat 2047 Alignment: Links foreign policy with development milestones and economic transformation.

Conclusion

The erosion of multilateralism reflects structural transformation in global power distribution. India must recalibrate foreign policy toward endogenous capacity, diversified trade, and technology-driven growth. Strategic autonomy remains relevant but requires economic and technological foundations to remain credible.

PYQ Relevance

[UPSC 2019] “The long-sustained image of India as a leader of the oppressed and marginalised Nations has disappeared on account of its new found role in the emerging global order”. Elaborate.

Linkage: It examines the evolution of India’s foreign policy from moral leadership of the Global South to pragmatic strategic positioning. It directly links to themes of eroding multilateralism and the shift from traditional strategic autonomy to interest-driven engagement in the emerging global order.

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