India Faces Strategic Test in a Multipolar World as Geopolitical Tensions and Economic Pressures Mount

As global geopolitical tensions intensify and economic uncertainties deepen, experts are reassessing India’s strategic positioning in an increasingly fragmented international order.

At a panel discussion titled “Navigating the Multipolar World,” speakers underscored the growing complexity of global power dynamics and the urgent need for strategic autonomy, economic resilience, and new forms of international collaboration.

The discussion featured former Indian Ambassador to the UAE Sunjay Sudhir, former High Commissioner of Canada and Singapore Paul Thoppil, and Himanshu Shah, Founder, President and CIO of Shah Capital. The session was moderated by Nitin Pai, Co-founder and Director of the Takshashila Institution.

Sudhir emphasized that the current global environment is unprecedented in its scope and impact, affecting economies, trade flows, and supply chains worldwide. He noted that ongoing conflicts and protectionist policies, including the Iran war and unilateral tariffs, have placed India in a challenging position.

“I mean, we are in a very difficult situation in which navigating is a big challenge. And I think we have been talking about strategic autonomy for a long time,” he said, adding that concepts such as strategic autonomy and multi-alignment have now become more relevant than ever.

Highlighting the broader implications of the Iran conflict, Sudhir said the crisis extends beyond regional actors and has significant global economic consequences. “Iran war has had such a huge impact on India. This is not just about Israel, US, and, Iran. It’s about the whole world. It’s about global economy. It’s about supply chains,” he said. He pointed to the vulnerability of critical chokepoints such as the Strait of Hormuz, noting that any disruption would have far-reaching consequences for India.

Sudhir also drew attention to the evolving nature of warfare, particularly the increasing role of technology, and its implications for global security and economic stability. He warned that rising energy costs and inflation pose additional risks, noting that even a marginal increase in prices can significantly affect India’s import bill.

Discussing India’s energy dependence, he highlighted the country’s reliance on external sources, particularly the Gulf Cooperation Council (GCC), for essential supplies. He also addressed India’s efforts to reshape its economic architecture through free trade agreements (FTAs), noting that while progress has been made with partners such as the United Kingdom, European Union, Australia, and New Zealand, tangible benefits may take time to materialize.

“Our experience in the past has not been great, because when we analyze our past, FTAs with Japan and Korea, we have actually, our exports have not gone up in the same to the same extent as an imports,” he said, expressing cautious optimism about future agreements.

On India’s role as a leader of the Global South, Sudhir offered a measured assessment, noting that while India has positioned itself as a representative voice following its G20 presidency, questions remain about its effectiveness in that role. He cited instances where India’s diplomatic responses have been perceived as cautious or delayed, suggesting that this could impact its leadership credibility.

“It’s a very tough spot for India to navigate, politically, economically,” he added.

Paul Thoppil provided a broader perspective on the shifting global order, referencing a recent speech by Canadian Prime Minister Mark Carney, which he described as a “seminal” articulation of current geopolitical realities.

“I think he kind of spoke in a way that articulated what the world was thinking,” Thoppil said.

He explained that the global system is undergoing a “rupture” in the rules-based international order, with multiple powers increasingly acting outside established norms.

“And so he had said was that we’re at a point whereby we’re at a rupture in the international rules based order, whereby hegemons and I would underscore the ‘s,’ because it’s not just one country that was referred to earlier, but there is a few in the world that aren’t biding by any more the rules of the game,” he said.

According to Thoppil, major powers are increasingly using tools such as tariffs, supply chains, and financial systems to advance national interests, often prioritizing unilateral gains over collective outcomes. He cited examples including trade measures that do not comply with World Trade Organization norms, export controls on critical resources, and the strategic use of financial infrastructure such as the US dollar and the SWIFT system.

“We’re sort of it’s done, and now we’re in a transition towards sort of a new world order which has yet to be defined,” he said, describing the current period as one of transition.

Outlining Canada’s response, Thoppil highlighted the concept of “variable geometry,” which involves forming flexible coalitions based on shared interests and values. He noted that building partnerships has become a priority, emphasizing the importance of collective action in addressing global challenges.

“So, for example, during PM Carney’s visit to India recently, he signed on to a Canada, Australia, India, Technology and Innovation Partnership arrangements that will look at things like AI, clean energy, supply chains,” he said, adding that such collaborations leverage complementary strengths, including critical minerals and digital infrastructure.

“The brilliance of the Indian people, its digital infrastructure is an incredible component to that pact going forward,” he added.

Himanshu Shah offered a more critical assessment of global and regional dynamics, arguing that geopolitical conflicts are increasingly driven by competition over energy resources. He suggested that recent developments have exposed vulnerabilities in India’s economic preparedness, particularly in terms of foreign exchange reserves and strategic planning.

He contrasted India’s approach with that of China, noting that Beijing has invested in alternative energy supply routes to reduce dependence on vulnerable chokepoints. Shah argued that global powers, including the United States, China, and Russia, are primarily focused on advancing their own strategic interests.

He also questioned the effectiveness of broader geopolitical groupings, describing the concept of the Global South as lacking cohesion. According to Shah, recent global developments demonstrate that power dynamics remain largely driven by dominant actors.

Despite differing perspectives, the panelists converged on one key theme: the need for India to strengthen its strategic autonomy and resilience in an increasingly uncertain world. Shah underscored this point, emphasizing the importance of self-reliance in navigating global disruptions.

“So, I think the best playbook is that you have to be self-reliant. That’s what, basically the last 15 months is telling you. Are you self-reliant?” he said.