How India is Navigating Weaponized Trade
The global economic order is crumbling and shifting from a Western-led, post-1945 model towards a more fractured and multipolar system. For decades, the prevailing belief was that deep trade ties between nations, backed by strong multilateral institutions like the WTO and IMF, would serve as permanent guardrails, ensuring that trade flowed smoothly even when geopolitical tensions were high. Today, those guardrails have collapsed. We have entered an era where interdependence is routinely weaponized, tariffs are deployed as blunt instruments of coercion, and the very institutions designed to foster cooperation have been systematically hollowed out.In this messy, twilight zone, the defining question for India is not how to fix the old global order, but how to thrive amidst its fragmentation. The answer, which sits at the heart of the 'India Way', comes down to one thing: true strategic autonomy in a weaponized world depends entirely on building domestic agility as an impenetrable shock absorber against imported volatility. If the global economy is exporting instability, India's domestic economy must be resilient enough not to import it.
The volatility we see today: the technology race between superpowers, broken supply chains, and rising protectionism in the West leaves no nation untouched. But not every country is equally equipped to handle them.
History has attested to a West-aligned trajectory, with the terms of the world order being set up by those in the Western hemisphere. However, with emerging trade blocs like the G20 championing multipolarity, the framework for economic conversation is evolving. In fact, a real gap has opened up between the more developed economies and the faster-moving countries of the Global South. Many Western capitals still struggle to come to terms with the fact that engines of global growth, innovation, and adaptation have fundamentally moved eastward and southward.
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While many advanced economies are weighed down by outdated infrastructure and slow decision-making, emerging economies are moving faster and skipping stages of development that took others decades. This agility in deploying resources and the ability to maneuver existing systems is evident in India's own tryst with the energy crisis. When energy prices spiked globally and inflation hit hard, India prioritized its economic survival and energy security over external geopolitical pressure, utilizing diplomatic multi-alignment to secure cost-effective energy imports that kept domestic factories running and inflation in check.
Another strong validation of the rapid development that younger economies are dealing with is seen in India's UPI ecosystem. When global banking systems and supply chains came under strain, India's digital payments backbone kept working. Everyday transactions continued without interruption, and financial support reached ordinary citizens quickly when it was needed most.
India is not waiting for the global order to self-correct. Instead, it is actively building internal resilience through rapid digital adaptation, securing critical manufacturing capabilities, and fostering a massive, self-sustaining internal market.
Furthermore, this domestic strength is precisely what affords India the luxury of diplomatic flexibility on the global stage. A nation fully dependent on foreign capital, foreign energy, and foreign technology cannot practice true multi-alignment; it can only ever be a client state. India’s ability to confidently negotiate free trade agreements with the European Union, deepen critical technological partnerships with the United States, and simultaneously champion the expansion of the BRICS bloc is entirely predicated on its internal economic vitality.
The evolving BRICS dynamic itself is a testament to this shifting world order. As the West increasingly resorts to protectionism, the Global South is actively forging new frameworks of cooperation. The push toward settling trade in national currencies, the exploration of alternative payment platforms, and the deepening of South-South regional trade are not aggressive acts aimed at dismantling the West. Rather, they are necessary mechanisms for de-risking. When dominant financial systems and supply chains are utilized as geopolitical weapons, emerging markets have a fundamental duty to build redundancies. India's engagement with these multi-polar initiatives is a calculated move to ensure that it is never fatally reliant on a single, vulnerable global node.
We are entering a long, chaotic transition period that External Affairs Minister S. Jaishankar has aptly described as a "G-minus 2" world. In this scenario, the major powers are either too focused on competing with one another or too distracted by domestic politics to underwrite global stability. In such an environment, waiting for external actors to guarantee economic security is not a viable plan. India’s trajectory in the coming decade will not be defined solely by the diplomatic coalitions it joins, but by the domestic infrastructure it builds, the technologies it indigenizes, and how quickly and smartly its economic institutions can adapt. The global order may be at a breaking point, characterized by volatile trade and fading multilateralism. But for India, this is a moment of profound clarification. The world will continue to export volatility. The true "India Way" is to ensure that our domestic agility acts as the ultimate shock absorber, allowing the nation not just to survive the breakdown of the old order, but to emerge as a primary architect of the next one.
About the Author: Anshika Solanki
Anshika Solanki is a postgraduate in Political Science from the University of Delhi and an associate member of Generation EU–India. She was also a research & program intern at the Technology and Society vertical, Carnegie India. The views expressed are personal.
This essay is a part of the Spring'26 issue of The India Way—'Breaking Point: India and the Future of World Order'