As multilateralism erodes, India must reframe its foreign policy

Speaking in the Rajya Sabha, Prime Minister Narendra Modi formally acknowledged the new world order. The hard part is to formulate a new national identity and approach to international relations.

Eroding multilateralism

India’s leadership of the Global South at the United Nations General Assembly was the foundation of its long-standing foreign policy of ‘strategic autonomy’. The global rules agreed in the UN established by former colonial powers led by the U.S. served their interests in the post-colonial world. India’s Oxbridge-educated diplomats had unquestioned leadership in the UN negotiating text on principles and rules, successfully diverting pressure on poor countries. Climate negotiations ending in 1992 were left entirely to India by the Global South.

However, China’s rise around 2010, through the creation of alternative funding, economic and security institutions, impacted the intellectual leadership position of India and also changed the UN irreversibly. China heads four principal UN agencies, and its aid volumes exceed those of the West. The U.S., now unable to manage the UN process, has withdrawn from 31 UN institutions.

In 1986, the U.S. launched the Uruguay Round of trade negotiations, leading to the World Trade Organization (WTO) in 1995, where developing countries’ interests became more differentiated, and India struggled to secure its interests. In a more equal world, since 2019, the U.S. has rejected the dispute settlement mechanism of the WTO, making it dysfunctional and reverting to unilateral tariffs. China, in contrast, has diversified its exports away from the U.S. and is now the largest trading partner of 120 countries.

The problem India faces is not from the rise of China. While the EU and Canada acknowledge the collapse of the multilateral structures, developing countries are wondering how to revive them. With the potential to become the world’s third-largest economy, India is particularly impacted in the U.S.-dominated world of transactional relationships, even willing to discard NATO.

The evolution of strategic autonomy

First, leadership of the Global South gave India outsized influence and now where do you speak for developing countries when international institutions and law have withered away? The U.S. and China are competing for technological dominance, not votes in the UN.

Second, ‘strategic autonomy’ applied to the Cold War when India led the Non-Aligned Movement. It lost relevance after the collapse of the Soviet Union in 1991 and gradually became a self-declared identity used to rationalise foreign policy choices. India joined the U.S.-led rejuvenated Quad in 2017 and then chose the Russian S-400 missile system over the U.S. Patriot system in 2018.

The reality is that India gravitated towards the Soviet Union after its 1951 veto prevented discussion of Kashmir in the UN Security Council. Russia remains India’s only long-trusted partner giving cutting-edge military technology, which the U.S. is chipping away at testing India’s resolve to remain a third pole in a multipolar world.

Third, with China’s rise, U.S. analysts began describing India not as strategically autonomous but as a “swing state.” The current U.S. military strategy rejects containment of China.

Power politics

The major scope of international relations, outside of alliances, was within multilateral institutions which has now returned to asymmetric relations. Reciprocity in tariffs is redefined as “America first”, implying others are in a subordinate relationship. Under the India-U.S. Framework Agreement, India has agreed to double imports, largely industrial products, while the U.S. continues an 18% tariff, unilaterally deciding reductions clearly after further concessions. The EU trade agreement eliminated 70% tariff lines with phased reciprocal reductions.

The real question for India is why it was targeted by the U.S. tariffs and how to grow in a world marked by flux.

The U.S. is determined to prevent the rise of another China and India alone has the potential to overtake the U.S. China exploited multilateral rules to become a fiercely independent global manufacturing power and that opportunity no longer exists. The long-term U.S. policy of keeping India apart from Russia and China has now gained greater force and blunting it will test Indian diplomacy.

Reframing foreign policy

India’s comparative advantage lies in its young population; nearly half of Silicon Valley’s workforce traces its roots to India. Building and attracting that talent can develop the capability to become a ‘cyber superpower’, spreading AI across security, manufacturing and services to secure development space.

To achieve this, India needs good economic and technological relations with the U.S., Russia, and China, Free Trade Agreements (FTA), and, importantly foreign policy replacing ‘strategic autonomy’ with ‘Viksit Bharat 2047’.

First, taking a leaf from China and the U.S. in the early 1900s, India should bide its time, maintain a low international profile and develop endogenous capabilities, requiring a diplomatic posture to accelerate the Asian Century and a passive role in all other regions.

Second, India must prioritise trade diplomacy by diversifying exports away from the U.S., even as vulnerabilities remain in bilateral relationships. Now that India is open to industrial imports, the push for FTAs must continue with Asia, soon to have two-thirds of global wealth, and Africa, the fastest-growing continent.

Third, India should create new technological, cyber and space relations with Russia, its steadfast and tested partner, now more an Asian than European power. It should also enable China to invest in infrastructure and partner manufacturing, with safeguards, to take advantage of trade opportunities and accelerate growth.

Fourth, India should treat relations with Pakistan as a foreign policy issue rather than a security challenge. A new water-sharing arrangement incorporating the needs of the Kashmir Valley, revival of the Iran-Pakistan-India Peace Pipeline with Pakistan benefiting from transit fees, and even a trade agreement could create economic incentives.

Lastly, as chair of BRICS, India has an opportunity to articulate its new foreign policy by building consensus on repositioning BRICS as an economic cooperation community, not a political multilateral body. Linking official digital currencies to make cross-border trade, repatriation and tourism payments smoother will be a good first step.

(Mukul Sanwal is a former UN diplomat)

Published – February 13, 2026 08:30 am IST