India at the World’s Fault Lines: Navigating a Fractured Global Order in 2026

As 2026 dawns, the global order no longer resembles a neatly arranged set of alliances but a fractured mosaic of overlapping crises and competing interests. Geopolitics, artificial intelligence, trade weaponisation and climate urgency are colliding in unpredictable ways. For India, this turbulence has not merely posed risks; it has tested — and largely validated — New Delhi’s strategy of multi-alignment in a world marked by deep interdependence and thinning trust.

A world of interdependence, but shrinking trust

The defining feature of 2025 was not war alone, but the use of economic ties as instruments of pressure. Globalisation, once sold as a stabilising force, increasingly became a tool of coercion. Supply chains tightened, markets convulsed and strategic assumptions acquired uncomfortable caveats.

For New Delhi, the year became a stress test of its long-held belief that India could be a “friend to all” without becoming dependent on any single power. The turbulence revealed a hard truth: interdependence now coexists with minimal trust, forcing states to hedge constantly.

When supply chains became weapons

Two shocks defined the year. First, China’s restriction on critical rare-earth exports in April sent tremors through global clean-energy and electric-vehicle supply chains, threatening India’s green transition. Second, the return of protectionism in Washington — with U.S. President “Donald Trump” imposing steep tariffs on Indian exports — exposed the vulnerability of labour-intensive industries to sudden policy shifts.

This was “weaponised interdependence” in action. Trust eroded quickly, but India’s response marked a shift from reactive diplomacy to strategic diversification.

Free trade, minerals and the search for resilience

Rather than retreating, India doubled down on economic engagement. Negotiations for free trade agreements were accelerated with a wide range of partners — from the UK and the EU to New Zealand and Oman. At the same time, New Delhi fast-tracked the National Critical Mineral Mission and deepened cooperation with the Mineral Security Partnership alongside the U.S. and Australia.

The lesson was clear: in today’s world, strategic autonomy is inseparable from supply-chain resilience. Diversification, not decoupling, has become India’s chosen path.

Economic contrasts at home: pressure and promise

Externally driven shocks placed pressure on the rupee and raised inflation risks through costlier energy imports. Yet domestically, India’s fundamentals remained strikingly resilient. Fiscal stability, steady consumption and investment momentum helped cushion global volatility.

Structural reforms also gathered pace. The enactment of long-pending labour codes and the SHANTI Act, aimed at opening nuclear energy to private investment, signalled a shift towards building a more shock-resistant economy. Even as the “International Monetary Fund” pushed India’s $5-trillion-economy milestone to 2028-29, India overtook Japan to become the world’s fourth-largest economy — reinforcing the sense of a “golden period” of reform.

Multi-alignment in action, not theory

India’s diplomacy in 2025 illustrated how multi-alignment works in practice. New Delhi deepened ties with the Global South while maintaining working relationships with Washington, Moscow and Beijing. The visit of the Russian President to India, despite Western unease, underlined India’s insistence on strategic autonomy.

At the same time, partnerships in the Indo-Pacific strengthened. The India-Japan summit and the launch of the Africa-India Key Maritime Engagement (AIKEYME) naval exercise reflected India’s ambition to act as a net security provider and a “vishwa bandhu” — a friend to the world.

Climate leadership amid hard choices

At COP-30 in Brazil, India positioned itself as a leading voice of the Global South, pressing developed nations to move beyond promises to predictable climate finance and technology transfer. Its leadership in the “International Solar Alliance” gained momentum as demand for clean energy surged worldwide.

Yet the balancing act remains delicate. Coal continues to play a role in India’s energy mix even as solar and wind investments expand, reflecting the tension between developmental imperatives and climate responsibility.

The digital frontier and India’s tech diplomacy

Perhaps the most innovative strand of India’s global engagement has been in technology. As the internet splinters into sovereign digital zones — a “Digital Iron Curtain” — India has begun exporting public digital goods. The India Stack and the internationalisation of “Unified Payments Interface” offer transparent, democratic alternatives to opaque digital systems.

In a low-trust world, India has discovered that providing global public goods — digital, financial or developmental — can generate credibility where traditional geopolitics cannot.

AI, jobs and the domestic social contract

Artificial intelligence accelerated its impact in 2025, reshaping labour markets and energy systems. India’s vast IT workforce faces disruption, but also opportunity. With strong digital public infrastructure and emerging AI innovation hubs, India is well-placed to shape global AI governance.

The challenge, however, is internal: reskilling workers, preventing digital exclusion and ensuring that technological gains do not widen social divides between urban elites and rural populations.

Looking ahead: bridges in a fractured world

As 2026 begins, interdependence without trust is likely to persist. India’s experience over the past year suggests that the answer lies neither in isolation nor blind alignment, but in confident engagement guided by national interest and global responsibility.

By choosing multi-alignment over binary loyalties, India has positioned itself as a rare stabilising bridge across a fractured international system. Navigating the year ahead will demand prudence, ambition and inclusivity — but if 2025 was any indication, India has learned how to walk this tightrope with growing assurance.