For India’s foreign policy establishment, 2025 unfolded less as a year of calibrated diplomacy and more as a sequence of shocks that challenged long-held assumptions. From the disruptive return of Donald Trump to the White House to instability in India’s neighbourhood and unending global conflicts, New Delhi found itself reacting more than shaping outcomes. As South Block looks toward 2026, the central task is no longer merely crisis management, but a sober recalibration of expectations in a world defined by volatility rather than order.
The Trump Factor and the Shattering of Assumptions
The return of Donald Trump as US President was the single most consequential external development for India in 2025. New Delhi had assumed that bipartisan consensus on India’s strategic importance would buffer bilateral ties from political swings in Washington. That assumption proved fragile.
Trump’s protectionist turn—symbolised by sweeping “Liberation Day” tariffs—directly hurt Indian exports and imposed penalties linked to India’s purchase of Russian oil. His softened posture toward Russia and ambiguous signalling on China unsettled alliance structures in Europe and the Indo-Pacific, complicating India’s careful strategic balancing.
Equally disruptive was Trump’s personalised diplomacy. Claims of mediating peace during Operation Sindoor, renewed engagement with Pakistan, and approval of F-16 supplies undermined India’s long-standing effort to diplomatically isolate Islamabad over terrorism. For India, the challenge was not just policy divergence, but the unpredictability of a partner once considered stable.
A Hostile Global Climate
Beyond Washington, global political and economic trends also turned adverse. The rise of nationalist and inward-looking politics across Europe and parts of Asia reinforced protectionism and weakened multilateral cooperation. At the same time, global growth projections softened, with the world economy expected to slow further by 2026.
While falling oil prices eased inflationary pressures for India, they also dampened momentum for renewable energy transitions globally—posing long-term challenges for climate diplomacy and green investment, areas where India has sought leadership.
Wars Without Resolution and Their Indian Costs
The Ukraine war entered its fourth year, but 2025 marked the first time India felt sustained economic pressure. Sanctions on Nayara Energy and Russian oil majors complicated India’s energy security calculus and exposed the limits of its strategic autonomy under tightening Western regimes.
In West Asia, the Gaza conflict continued with devastating humanitarian consequences. Though a late-year ceasefire offered partial respite, the war stalled initiatives like the India–Middle East Economic Corridor and placed India in diplomatically uncomfortable positions at forums such as BRICS and the SCO, especially as New Delhi avoided explicit criticism of Israeli actions against Iran.
Neighbourhood First, Tested Hard
Closer home, India’s neighbourhood proved increasingly unstable. Renewed conflict with Pakistan, political upheaval in Nepal, and anti-India violence in Bangladesh following domestic unrest underscored how quickly regional transitions can acquire an anti-India tone.
These developments revealed a sobering reality: India’s economic size and diplomatic engagement do not automatically translate into political influence. Domestic politics in neighbouring countries, especially when fused with nationalism, can rapidly constrain New Delhi’s room for manoeuvre.
Why the US Shock Cut the Deepest
Among all challenges, the Trump presidency cut deepest because it disrupted expectations. India faced domestic criticism over deportations, tighter visa regimes, and the visible cooling of India–US ties. External Affairs Minister S. Jaishankar, despite sustained engagement with Washington, faced unusual scrutiny at home.
Strains
Month: Current Affairs - December 30, 2025
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