Derisking in an Age of Uncertainty, India’s Strategy for a Turbulent World
The world has entered a volatile and uncertain era, possibly the most turbulent in living memory. This was on public display at the 2026 Munich Security Conference, whose theme “Under Destruction” spoke volumes. While the trans-Atlantic world is particularly impacted, no part of the world is spared. India’s policies are naturally responding to these changes as well.
As External Affairs Minister S. Jaishankar observes, long-standing assumptions and expectations have now become questionable. Key dimensions are transforming simultaneously, be they strategic, political, economic or technological. Solutions lie in derisking and diversifying across multiple domains. This approach is increasingly visible in the policy of nations as much as in the choices of enterprises.
A nation like India that has pursued nimble and pragmatic policies at home and abroad appears better prepared. Strengthening national capabilities and addressing growth comprehensively deal with both short-term issues and long-term prospects. From a position of strength, India is engaging international partners more intensively. This is demonstrated in recently concluded trade deals. We will also be more salient in the global calculus on production, services, technology, skills and talent.
The Twilight Zone
If the established order is eroding, it is equally clear that replacements are hard to create. We appear headed for a long twilight zone that is messy, risky, unpredictable, perhaps even dangerous. This is already visible across different geographies. Aspects of the present order will co-exist with elements of the emerging one. Economics will give way to politics and security when it comes to making choices. And in the age of AI, technology will be more transformative than ever before.
This is not a temporary disruption but a fundamental reordering. The institutions and norms that have governed international relations since 1945 are under strain. New powers are rising, old powers are reasserting themselves, and the rules of the game are being rewritten in real time. In such an environment, countries that can adapt quickly and maintain strategic flexibility will have the advantage.
Six Features of the Current Scenario
Jaishankar identifies six notable features of the current international scenario that are shaping India’s approach.
First, the US is determined to re-industrialise at any cost. This is central to its tech future. After decades of offshoring manufacturing, America is seeking to bring production back home. This is not just about jobs; it is about national security and technological leadership. For India, this creates both challenges and opportunities. Competition for investment will intensify, but so will demand for Indian skills and services.
Second, China’s manufacturing and export focus continues unabated and may even expand. Despite trade tensions and technological competition, China remains the world’s factory. Its capacity to produce goods at scale and low cost is unmatched. India must compete with China in some areas and cooperate in others, all while managing strategic rivalry.
Third, technology competition is intensifying and polarising. From semiconductors to AI to quantum computing, technology is at the heart of great power competition. Countries are being forced to choose sides, and supply chains are being weaponised. India must navigate this landscape carefully, building indigenous capability while maintaining access to global innovation.
Fourth, energy trade flows are being significantly redefined. The war in Ukraine has upended energy markets. Russia’s isolation has forced Europe to seek new suppliers. The Middle East is reorienting toward Asia. The energy transition is accelerating. All of this creates uncertainty but also opportunities for countries like India that can adapt.
Fifth, new mindsets are encouraging greater risk-taking, including through military means. The taboo on territorial conquest, weakened but not broken after 1945, is eroding further. Nations are more willing to use force to achieve their objectives. This makes the security environment more dangerous and unpredictable.
Sixth, migration and even mobility is getting contentious. The free movement of people, once seen as an unalloyed good, is now contested. Borders are hardening. Visas are becoming political. For a country like India with a large diaspora and a stake in global mobility, this is a significant concern.
The Fragility of Supply Chains
The experiences from Covid and conflicts in Ukraine and West Asia had already raised awareness about the fragility of supply chains. Concentration of production is one key factor; the limitations of connectivity another. Sharper political competition has enhanced both aspects. We witness new positions of production and finance, leveraging of market shares, and tightening of export controls.
To add to all of this, there are now uncertainties on the demand side due to application of bilateral tariffs. The world is no longer concerned just about crisis situations; day-to-day concerns are equally pressing. Arguments for derisking across the entire spectrum—sourcing, production and markets—become more compelling by the day.
Food, Health and Energy Security
In this context, countries are increasingly concerned about ensuring food, health and energy security. As a major food producer, this also means fertiliser security for India. Given the prevailing uncertainties, it is natural to pursue diversification. In different domains, the triangulation of availability, costs and risks becomes the decision matrix. There will also be areas like critical minerals where stronger international collaboration is required to ensure adequate access.
Economic security is best served through stronger self-reliance and more trusted partners. This is particularly so for large nations like India. In a globalised world, the two goals are actually sides of the same coin. Greater capabilities attract more partnerships that, in turn, reinforce such resilience. We will not only contribute to global growth but also to stability, predictability and trust.
India’s Strategy
How does India best do that? As an overall strategy, by steady expansion of its comprehensive national power. Prime Minister Narendra Modi has declared our national goal to be Viksit Bharat by 2047. There are multiple dimensions of that journey and these must not be perceived as choices. India has to do both manufacturing and services, industry and agriculture, core and advanced technology, hard and soft infrastructure, innovation and scaling up, evolution and leapfrogging, enabling environment and focused initiatives.
In fact, on most debates about economic strategy, “all of the above” is probably the right answer. Achieving that would require constant progress on ease of doing business and ease of living, while advancing inclusive and people-centric policies.
Trade Deals as Derisking
An India with greater capabilities and confidence is understandably negotiating mutually beneficial arrangements with more partners. This year, we signed an FTA with the EU and a trade deal with the US. Earlier, it was the UK, EFTA, New Zealand and Oman, as also the UAE, Australia and Mauritius. Our negotiators have shown great perseverance and commitment in securing greater market access for Indian products and services abroad, while protecting sensitive sectors.
Quite apart from its growth and employment benefits, this addresses the derisking challenge by presenting Indian options as part of a global solution. When supply chains are being reconfigured, when companies are seeking alternatives to concentrated production, India offers a credible and reliable partner. The trade deals are not just about market access; they are about embedding India in the new global economic architecture.
A Confident and Optimistic Society
Since 2014, our people have chosen the direction they want India to go. We are emerging as a confident and optimistic society, responding sensibly to challenges without losing sight of opportunities. The last decade has been an empowering experience that has made the goal of Viksit Bharat a realistic one. It has also created a foundation for India to emerge as a credible and reliable international partner in this age of uncertainty.
Both will happen as the reform process continues to roll on. The journey is long, but the direction is clear. In an age of uncertainty, India offers a measure of stability. In a world seeking alternatives, India presents itself as one. And in a time of disruption, India’s nimble and pragmatic approach may prove to be its greatest asset.
Q&A: Unpacking India’s Derisking Strategy
Q1: What does “derisking” mean in the context of India’s foreign policy?
Derisking refers to the strategy of reducing dependence on any single country or region for critical supplies, markets, and partnerships. It involves diversifying sourcing, production, and market access to insulate the economy from geopolitical shocks, supply chain disruptions, and coercive actions by other powers. For India, this means building stronger self-reliance while simultaneously cultivating a wider network of trusted international partners through trade deals, strategic partnerships, and diplomatic engagement.
Q2: What are the six notable features of the current international scenario identified by Jaishankar?
The six features are: (1) the US is determined to re-industrialise at any cost; (2) China’s manufacturing and export focus continues unabated; (3) technology competition is intensifying and polarising; (4) energy trade flows are being significantly redefined; (5) new mindsets are encouraging greater risk-taking, including through military means; and (6) migration and even mobility is getting contentious. Together, these features create a volatile and uncertain global environment requiring nimble and pragmatic responses.
Q3: How do trade deals contribute to India’s derisking strategy?
Trade deals serve multiple purposes in the derisking strategy. They secure market access for Indian products and services, reducing dependence on any single market. They attract investment and technology from partner countries. They embed India in global value chains as a reliable alternative to concentrated production. And they signal India’s emergence as a credible partner in a reconfigured global economic architecture. The recent FTA with the EU and trade deal with the US, along with agreements with the UK, UAE, Australia, and others, all advance this strategy.
Q4: Why is “all of the above” the right answer for India’s economic strategy?
India cannot afford to choose between manufacturing and services, industry and agriculture, core and advanced technology. It must pursue all simultaneously because each reinforces the others. Manufacturing creates jobs; services drive exports. Agriculture ensures food security; technology enables leapfrogging. Hard infrastructure enables growth; soft infrastructure ensures inclusion. A comprehensive approach that advances on all fronts is necessary to build comprehensive national power and achieve the goal of Viksit Bharat by 2047.
Q5: How has India’s domestic trajectory contributed to its international positioning?
Since 2014, India has emerged as a more confident and optimistic society. Domestic reforms have strengthened capabilities, improved ease of doing business, and advanced inclusive development. This empowering experience has made the goal of Viksit Bharat realistic and created a foundation for credible international partnership. In an age of uncertainty, India offers stability; in a world seeking alternatives, India presents itself as one. Domestic strength and international engagement are two sides of the same coin.
