India’s grand strategy – multi-alignment, is not about choosing sides but building flexible, issue-based partnerships that expand strategic space while protecting autonomy. Yet, this external balancing act coincides with intense domestic challenges like strain from inflation, widening current account deficit, global slowdown and job stress. The term bleeding has been used by critics, but that overstates the case. A closer look reveals an Indian economy that is bruised but resilient.
Age of easy choices is over…
India must now engage with multiple, often competing, partners: BRICS for South-South solidarity, ASEAN for its Indo-Pacific strategy, the EU for technology and trade, Russia for energy and defence, Japan for investment and even China for crisis management. This multi-alignment 2.0 is not passive balancing but active orchestration. India’s challenge is to prevent entrapment in exclusive blocs while projecting itself as indispensable to all. This balancing act is both its greatest opportunity and its toughest test.
What is going in Shadow?
China and the United States, despite their rivalry, both view Pakistan as a strategic lever in the broader regional balance. This has direct implications for India. For Beijing, Pakistan is a permanent second front against India reinforced through China–Pakistan Economic Corridor (CPEC) and massive military aid. For Washington, Pakistan’s centrality has diminished post-Afghanistan, yet it retains tactical utility. By extending support through IMF bailouts, selective military cooperation, and occasional diplomatic signalling, the US reminds that its partnership comes with expectations. In effect, while China uses Pakistan as an active sword, the US employs it as a reminder to India on its autonomy limits. The danger for New Delhi: both powers may tolerate Pakistan’s instability to keep India distracted from emerging as an independent global pole.
Bleeding on bending?
The sharpest debate within India today revolves around its economic condition. Critics often invoke the word bleeding. But it is under strain showing resilience. The pressures are undeniable. Persistent food and fuel inflation steadily erodes household purchasing power, dampens demand, and compels the Reserve Bank of India into repeated tightening cycles that slow investment. On the external front, a widening current account deficit, steep energy import bills, and a weakening rupee strain reserves. Without strong and steady capital inflows, these pressures expose vulnerabilities. At the same time, India’s chronic challenge of underemployment and the scarcity of high-quality jobs threaten inclusive growth and, if left unchecked, risk social unrest.
Yet India’s vital signs tell a more balanced story. The domestic economy continues to provide a strong heartbeat, with consumption accounting for well over half of GDP and offering a natural shield against global shocks. The financial system, once weighed down by bad loans, is the healthiest in a decade, with low NPAs, expanding credit and robust capital markets. The government’s heavy investment in infrastructure is acting as a treatment plan, injecting stimulus, crowding in private capital and supporting job creation. Meanwhile, foreign reserves of more than USD 500 billion serve as antibodies, cushioning against volatility and external shocks.
Not in Morgue, but ICU
The outlook for the next 12 to 18 months is not of collapse but of a managed slowdown. Growth is expected to hover around 6 to 6.5 per cent, lower than post-pandemic highs but still the fastest among major economies. Policy will lean toward stability rather than speed, with the RBI prioritising inflation control. Volatility will persist. Rupee will remain under pressure and the current account deficit is a key risk indicator. Exports will inevitably feel the impact of a slowing global economy, but domestic sectors such as infrastructure, financial services, and manufacturing are likely to remain resilient.
India, then, is not in the morgue but in the ICU, under watchful monitoring. The wounds are real, but the constitution is strong and treatment is underway. The challenge is vigilance, not panic. If inflation is tamed, jobs expanded and reforms deepened, today’s turbulence could yet serve as a springboard. In a world of fragmentation and rivalry, India’s path is clear: resilience at home, multi-alignment abroad and a gradual transformation into a global leader.
India’s Geopolitical Balancing Act: Promise, Peril & Pragmatism
A fractured world order, four pivots, one strategy.
- BRICS: Opportunity Entangled with Contradiction
BRICS offers India a platform to voice global south issues like climate finance, multilateral reform and alternatives to dollar hegemony. However, its strategic contradictions run deep. The New Development Bank and local-currency trade mechanisms create useful hedges against western sanctions. China’s dominance and Russia’s increasing dependence on Beijing pose a challenge. For India, it is a diplomatic forum to extract economic benefits, not a strategic alliance. - ASEAN: The Delivery Test
ASEAN is central to India’s Act East policy, with its members seeking reliable partners amid US – China rivalry. India’s engagement focuses on maritime security, connectivity and sustainable growth. Projects such as the Indo-Pacific Oceans Initiative and North east-South east Asia connectivity corridors could unlock trade and reinforce ASEAN’s centrality. But ASEAN is not easy to woo. Its consensus-driven politics and deep economic dependence on China weaken its autonomy. India’s Achilles’ heel is its slow pace of project delivery compared to China’s lightning execution. - European Union: Convergence with Caveats
The EU’s evolution into a geopolitical player aligns with India’s vision of a multipolar world. The partnership is strong in trade, technology and strategic autonomy, with shared interests in de-risking from China. Green energy, AI and defence (particularly with France) deepen the partnership. However, differences remain on issues like stances on Russia and trade standards, but the relationship is complementary and rooted in shared values. - Eye on the West: The Coming Storm
India’s outreach to Russia, China and Japan is a strategic move, not mere hedging. Each relationship serves a purpose, from securing discounted energy from Russia to managing border de-escalation with China. This strategy of partnerships without patronage has unsettled western observers but in reality, India cannot anchor itself to a single bloc in a fractured world. But this will lead to increased pressure from the west on trade and geopolitical alignment.
The author is an internationally acclaimed expert on national security, foreign affairs and strategic intelligence.