Economic power is no longer merely supporting geopolitics; it is increasingly shaping it. As tariffs, sanctions, technology controls and supply chains become strategic weapons, India must convert global interdependence into resilience without sacrificing openness, growth or strategic autonomy at home.
JUSTUS NAM | NAIROBI, KENYA FORMER FOREIGN SERVICE OFFICER AND A FORMER RESEARCH FELLOW AT THE LANCASTER UNIVERSITY CHINA CENTRE | FOR THE NEWS ANALYTICS HERALD
3 mins read.
For much of the post-Cold War era, economic interdependence was expected to reduce geopolitical rivalry. Trade, investment and open markets would make conflict increasingly costly. That assumption is weakening. Major powers now employ tariffs, sanctions, export controls and investment restrictions to influence competitors. Economic interdependence has become contested strategic terrain.
ECONOMIC WEAPONISATION
Tariffs increasingly serve geopolitical objectives beyond protecting domestic industries. The US–China trade confrontation demonstrated how trade restrictions can reshape investment, production locations and critical supply chains.
Export controls are equally consequential. Restrictions on advanced semiconductors, artificial intelligence, quantum technologies and manufacturing equipment seek to determine which countries can develop technologies underpinning future economic and military power.
Financial sanctions impose costs by restricting access to banking networks, international payments and capital markets. Governments also scrutinise foreign investment in telecommunications, biotechnology, energy and digital infrastructure to prevent technological dependence and security vulnerabilities.
Economic interdependence has become contested terrain, where control over trade, finance and technology increasingly determines strategic influence.
Supply chains have consequently become strategic assets. Companies increasingly balance efficiency against resilience and geopolitical exposure. Lithium, cobalt, nickel and rare earths are particularly important because they support advanced manufacturing, energy systems and defence production.
Industrial policy has also returned. The United States, European Union and India are employing subsidies, research funding and investment incentives to strengthen strategically important industries. Market efficiency alone is no longer considered sufficient to protect national-security capabilities.
RESILIENT INTERDEPENDENCE
Economic diplomacy now extends beyond market access. Trade agreements, technology partnerships, infrastructure cooperation and critical-mineral arrangements increasingly support strategic objectives.
Governments seek secure production networks, technological cooperation and diversified resource access. Economic and foreign policies are becoming mutually reinforcing components of national strategy.
The emerging objective is resilient interdependence rather than self-sufficiency. Economic isolation would sacrifice trade, investment and technological exchange, while excessive dependence creates vulnerabilities during geopolitical confrontation.
Resilience therefore requires diversified suppliers, investment partners, technology access and production networks capable of absorbing disruption.
Strategic resilience does not demand economic isolation; it requires diversified partnerships that prevent excessive dependence from becoming vulnerability.
INDIA’S OPPORTUNITY
India occupies an advantageous position amid global supply-chain restructuring. Its domestic market, expanding digital infrastructure, workforce and manufacturing ambitions offer opportunities to attract international production and investment.
However, geopolitical opportunity alone cannot guarantee success. Investors require regulatory predictability, efficient logistics, skilled workers, institutional credibility and dependable supply networks.
India must ensure foreign investment strengthens domestic productive capacity rather than merely relocating assembly operations. Meaningful integration should generate manufacturing capabilities, technological expertise, skilled employment and stronger connections between Indian enterprises and international production networks.
Achieving this requires coordination between industrial policy, infrastructure, research, education and regulatory reform.
India’s strategic autonomy also depends on diversified external relationships. Parliamentary Standing Committee on External Affairs Chairman Shashi Tharoor’s formulation of balanced “policy promiscuity” reflects engagement with multiple partners without exclusive strategic dependence.
Such an approach allows India to deepen economic and technological cooperation across competing centres of power while preserving independent choices.
Trade agreements, infrastructure partnerships, energy relationships and critical-mineral arrangements consequently become instruments of strategic autonomy.
Yet external partnerships cannot substitute for domestic strength. Advanced manufacturing, research, institutional quality and technological innovation remain indispensable.
India’s strategic autonomy increasingly depends on converting diversified international partnerships into enduring domestic industrial and technological capabilities.
FRAGMENTATION RISK
Economic statecraft also presents systemic dangers. Widespread tariffs, sanctions, export controls and investment restrictions could fragment global production into competing technological and economic blocs.
Divergent standards, duplicated supply chains and politically motivated investment decisions may increase costs and reduce efficiency. Smaller powers could face pressure to align with rival economic centres.
Excessive securitisation could also restrict capital, technology and knowledge flows essential to innovation and growth.
The challenge is protecting legitimate national-security interests without dismantling the openness underpinning global prosperity.
Economic power increasingly operates through dependence rather than military force alone. Countries controlling critical technologies, financial networks, essential resources and resilient production systems can influence others’ strategic choices.
For India, the objective should be neither economic isolation nor unrestricted dependence. It must strengthen domestic industrial and technological capabilities while maintaining diversified international relationships.
In an increasingly fragmented global economy, economic resilience is not merely a development priority. It is fundamental to India’s strategic autonomy and long-term geopolitical influence.
(Justus Nam is a geopolitical analyst, a former Foreign Service Officer and a former Research Fellow at the Lancaster University China Centre. His work focuses on African geopolitics, diplomacy, and security, with particular attention to regional integration and China–Africa relations. The views expressed are of the author and do not necessarily reflect the views of The News Analytics Herald.)
