India's Economic and Diplomatic Challenges

India faces significant economic and diplomatic challenges due to shifts in the global geopolitical landscape, particularly influenced by the United States' current foreign policy stance.

US Geopolitical Maneuvers

• The US, under a transactional and unilateral approach, has intensified conflict in the Middle East, particularly with Iran and Israel.
• The absence of UN approval for actions taken by the US reflects a departure from international law, raising concerns about its role as a global power.

India-US Relations

• India's relations with the US, which once improved significantly under President George W Bush and Prime Minister Manmohan Singh, now face potential instability.
• The unpredictable nature of US foreign policy under President Trump poses a risk to stable bilateral relations.

Strengthening Ties with Middle Powers

India is exploring stronger economic and diplomatic ties with middle-power countries to counterbalance the influence of dominant global powers.

• India has signed free-trade agreements with the UK, EFTA, and Australia, and is negotiating with the European Union and Mercosur.
• Joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could further reduce dependence on the US and China, though challenges remain, especially in agriculture.

Trade and Economic Adjustments

• India aims to address the slowdown in information technology export growth by focusing on manufactured goods exports.
• New trade agreements are expected to boost export growth and support economically lagging states by providing manufacturing job opportunities.

Challenges from Middle East Conflicts

• The ongoing conflict in the Gulf Region affects India through increased oil and gas prices and potential decreases in remittances.
• Prolonged war could severely impact India's economic growth and its goal of becoming a developed nation by 2047.

Role of Middle-Power Countries

Middle-power countries can play a crucial role in mitigating global conflicts and supporting adherence to international law.

• These countries can exert political pressure to de-escalate conflicts and reinforce the international rule of law.
• India, leveraging its strategic position and relationships with middle-power nations, can lead efforts for peace and global stability.

Note: The views expressed are personal and do not necessarily represent the opinions of Business Standard.