GS 2: International RelationsGS 3: EconomyGS 2: Polity

History doesn't end today, our old compass has run its course. Here's a new one for India, Pg13

Navigating a fragmented world: India seeks strategic autonomy amidst geopolitical shifts, economic tensions, and multilateral institution dilemmas in 2026.

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Key Highlights:

  • The global order is experiencing fragmentation due to trade disputes, geopolitical tensions, and ineffective multilateral institutions.
  • India is promoting trade in rupees with over 22 countries and encouraging investment in Indian assets.
  • Climate change caused insured losses of $145 billion in 2025, potentially rising to $300 billion in the future.
  • India achieved 50% non-fossil fuel capacity, ahead of its Paris NDC targets.
  • Global AI funding reached $120 billion in Q3, highlighting the need for India to invest in AI and quantum computing.

Detailed Insights:

  • The post-Cold War order is declining due to great-power rivalries and a resurgence of mercantilism, impacting global trade and supply chains.
  • India is actively pursuing Free Trade Agreements (FTAs) to boost growth and using rupee settlement mechanisms to promote financial sovereignty.
  • The US faces fiscal challenges with a rising federal deficit, leading countries to reduce dependence on the dollar.
  • India advocates for reforms in multilateral institutions like the UN Security Council to better represent the Global South.
  • Demographic shifts, particularly an aging global population, necessitate a new global compact focused on migration and human welfare.
  • An unreformed United Nations and a narrowly focused G20 highlight the need for a fresh approach to global governance.
  • India needs to maintain fiscal discipline, enhance technology investments, and align climate action with economic growth.
  • Sustaining macroeconomic stability, freeing land, labor, and capital, and attracting global investment are crucial for India's growth.

Key Concepts Involved:

  • Multilateralism: A system of international relations based on cooperation and collaboration among multiple countries.
  • De-dollarisation: The process of reducing reliance on the US dollar in international trade and finance.
  • Fiscal Deficit: The difference between a government's total revenue and its total expenditure.
  • Strategic Autonomy: A country's ability to make independent decisions in foreign policy and defense.
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