Understanding Global Turbulence: Trends Impacting Emerging Global Order
We meet at an unusual moment in history, not merely turbulent, not merely transitional, but unsettled at the level of first principles. Conversations like the Asia Economic Dialogue matter precisely because the assumptions that underpinned global politics and economics for three decades after the end of the Cold War are shifting beneath our feet.
Today, geopolitics has entered the bloodstream of economics. Trade has become a strategic leverage, technology has become sovereign territory, finance has become an instrument of coercion and supply chains have become battlefields. This is why the theme before us, Geoeconomics Beyond Globalisation, is not rhetorical. It is diagnostic.
Therefore, today I want to reflect on three broad themes: first, why global politics and economics appear so turbulent; second, whether multilateralism and globalisation are truly in retreat or simply evolving; and third, what this moment means for India—not as a passive observer, which we can never be, but as an active shaper of the emerging global order.
Let me first talk about a world in flux and how we understand the turbulence before we go on to sanctions and the regimes that confine us today. To begin, let us acknowledge an obvious reality—the international system is no longer comfortably unipolar or predictably cooperative. The optimism of the immediate post-Cold War decades, when globalisation seemed irreversible, has given way to something more complex and contested.
Multipolarity has not fully stabilised. We are in what I would call asynchronous multipolarity. Power is distributed unevenly across domains—military, economic, technological, and financial. No single state can dominate everything, and no equilibrium has yet formed. We are, in fact, witnessing the collision of several tectonic plates.
The first is the return of great-power rivalry. The United States remains the preeminent military and financial power. China has emerged as a comprehensive economic and manufacturing powerhouse, increasingly assertive and capable of projecting power and demonstrating resilience. Russia is militarily disruptive, middle powers are much more ambitious, and the Global South is more vocal. This transition is inherently unstable.
Economic policy is increasingly intertwined with strategic competition. Trade restrictions, technology export controls, investment screening, sanctions—all these tools, once considered primarily economic, are now instruments of geopolitical statecraft. Major powers are not merely competing for markets; they are competing for technological primacy, supply chain control and normative influence.
Secondly, we see the weaponisation of interdependence. Globalisation created dense networks—trade routes, semiconductor supply chains, payment systems, rare earth dependencies, and digital platforms. These networks, we assumed, would generate mutual benefit; instead, they have become pressure points. Sanctions regimes, export controls, technology denial, financial exclusion from SWIFT, tariff wars, and energy chokepoints—these are no longer exceptions. They are structural tools of statecraft.
Geoeconomics is not new, but it is now systemic. Technology itself has become a geopolitical theatre. Artificial intelligence, quantum computing, biotechnology, and semiconductors—these are not just commercial innovations; they are dual-use technologies with profound security implications. Control over standards, data, intellectual property, and critical inputs is now a strategic imperative. The race for technological leadership shapes alliances and rivalries alike.
Global supply chains have revealed their fragility. We had the pandemic, followed by the Ukraine conflict, which exposed vulnerabilities in food, energy, and manufacturing networks. Governments discovered that efficiency alone does not guarantee resilience. Terms like ‘friend-shoring,’ ‘near-shoring,’ and ‘strategic autonomy’ have entered mainstream policy discourse.
Thirdly, we see the erosion of guardrails. Arms control regimes have weakened. WTO dispute resolution is paralysed. The UN Security Council is gridlocked. Global trade to GDP ratios have plateaued and, in some regions, declined. Regional trade arrangements are proliferating, but they are strategic, not universal. The old rules still exist on paper, but the confidence that rules override power has eroded. In such a world, uncertainty is rational, turmoil is structural, and chaos is not accidental—it is transitional.
Fourthly, climate change and global health crises remind us that the most serious threats often transcend borders. Extreme weather, resource scarcity, migration pressures, and pandemics—these do not respect national sovereignty. They demand cooperation even when geopolitics pulls countries apart.
Finally, domestic politics in many societies have shifted. Inequality, job insecurity, and cultural anxieties have fuelled nationalist sentiment. Political leaders respond to these pressures by prioritising domestic constituencies, sometimes at the expense of international commitments.
Taken altogether, these forces create a paradox. The world is more interconnected than ever, yet political trust is thinner. We depend on each other economically, but we increasingly hedge against one another strategically.
The second trend I would like to point to is multilateralism, which is under strain but is not dead. This brings us to the question: Has it disappeared? No. It has morphed. It has fragmented. Public opinion worldwide still supports cooperation on health, education, climate, and economic stability. Governments continue to rely on collective frameworks even while criticising them. But there is no denying that traditional institutions face stress.
The United Nations Security Council struggles to act decisively. The World Trade Organization’s dispute settlement system has stalled. International financial institutions face calls for reform to reflect contemporary economic realities.
Yet, as I said, it would be premature—and indeed inaccurate—to pronounce multilateralism dead. We see the rise of perhaps new iterations, if I may say: minilateralism and plurilateralism—the QUAD, AUKUS, I2U2, BRICS expansion, the G20 (or G21), regional trade blocs, technology coalitions, and mineral partnerships. These are not universal bodies. They are interest-based coalitions.
This is pragmatic multilateralism. The era of universal consensus-driven institutions is giving way to more flexible, layered arrangements. Coalitions of the willing tackle specific issues, while broader institutions, at least notionally, provide legitimacy and continuity. This system, which you may call hybrid, may lack the elegance of earlier visions of global governance, but it reflects the current geopolitical realities. And importantly, it allows countries like India to exercise agency.
India has historically valued multilateralism not as an abstract ideal but as a practical necessity. Rules-based cooperation gives developing countries voice and leverage. Reform, not abandonment, should therefore be our guiding principle.
The third trend I would like to point to is the debate over globalisation, which I am sure you have discussed over the last two days. Here we must be careful; globalisation has undeniably slowed compared to its rapid expansion in the late twentieth and early twenty-first centuries. Trade growth has moderated. Investment flows fluctuate with geopolitical uncertainty. Some industries are relocating or diversifying production.
Globalisation is not dead, although the era of frictionless globalisation is dead. Trade volumes remain historically high. Digital services, data flows, and cross-border innovation continue to expand. Financial interdependence persists. Cultural and intellectual exchange has intensified rather than diminished.
What has changed is the nature of globalisation. The earlier model emphasised efficiency and cost minimisation. The emerging model incorporates resilience, security, and sustainability. Governments are willing to accept somewhat higher costs to ensure supply security, technological sovereignty, and environmental responsibility. This shift can be described as geoeconomics, where economic choices are shaped explicitly by strategic considerations.
It is not a retreat into autarky. Rather, it is a recalibration of openness. Globalisation is no longer an ideology. It is managed exposure.
In fact, we must recognise something intellectually uncomfortable for many of us: the hyper-globalisation of the early 2000s was historically anomalous. It was enabled by U.S. primacy, China’s integration into the WTO, cheap energy, low inflation, and minimal geopolitical rivalry, and those conditions have obviously changed.
What is emerging, therefore, is not de-globalisation; it is strategic globalisation. States are asking a new question: At what point does engagement become dependency? And when does dependency become vulnerability? That red line between interdependence and vulnerability defines the new geoeconomic age.
Fourthly, when you look at the future, we can imagine three broad trajectories for the world economy. One possibility, that may be a mechanical thought that comes to mind, is renewed cooperative globalisation with a rather utopian scenario of trade and investment recovering momentum, institutions reforming, and technological collaboration expanding without obstacles.
This scenario would likely yield higher growth and more effective responses to global challenges, but the political will that it requires is certainly not in evidence.
A second, perhaps more plausible scenario is managed fragmentation. Regional blocs deepen integration internally while maintaining selective global connections. Technology ecosystems partially diverge. Cooperation continues in climate and health, but competition dominates strategic sectors.
A third scenario would be full deglobalisation, a rather doomsday one you would say, would involve extensive trade barriers, technological decoupling, and hardened geopolitical blocs. Growth would slow significantly, and global challenges would become harder to address collectively. It reminds me of W. B. Yeats’s The Second Coming: “What rough beast… slouches towards Bethlehem to be born?”
Current trends suggest movement towards the second scenario, which I talked about—a kind of fragmented globalisation managed through diplomacy rather than confrontation, managed interdependence. The outcome is, of course, not predetermined. Policy choices still matter.
States must build strategic resilience, and they must aim for strategic indispensability, for leverage. Technology is decisive here in shaping standards. The future world is not going to be led by those who just command armies; it will be led by those who command algorithms. I am sure you have heard this before—data ecosystems, rare minerals, energy grids, and innovation networks.
Now, fifthly, let me turn to India’s strategic opportunity: Where does India stand in this shifting landscape?
India today occupies a distinctive position. It is a major emerging economy with global aspirations; it retains credibility among developing countries. It participates in Western-led initiatives while maintaining strategic autonomy. It has demographic vitality, technological talent, and growing diplomatic influence.
But India cannot control global turbulence, although it can shape its trajectory. I call it more than a middle power; I call it a pivotal state. This situation, therefore, presents an opportunity but also responsibility.
Strategic Imperatives for India
Let me outline five imperatives.
Firstly, preserve strategic autonomy not just in slogan, but in substance. Strategic autonomy means the will and capacity to think and act independently on matters that affect our vital interests—whether it’s war, peace, economy, technology, or culture. It is not isolation. It is not equidistance. It is not reflexive anti-alignment. It is a disciplined choice.
We talk of multi-alignment, but it should not be multi-alignment that slides into dependency. The central challenge, not only for India but globally, is balance. India must constantly test the red line: where does engagement constrain sovereign choice? Excessive openness without safeguards creates vulnerability. Excessive self-reliance risks stagnation, and therefore, strategic autonomy should not become isolationism; globalisation should not become dependency.
Our historical experience offers guidance. Non-alignment was never neutrality; it was autonomy combined with engagement, and today’s circumstances call for a similar equilibrium. Not a return to non-alignment, but I am talking of the forces that confront us today and the responses we need to fashion to deal with those challenges.
Secondly, build economic resilience at scale. A growing economy is the foundation of autonomy. India must continue deep global engagement through the FTAs that we have negotiated and concluded and are negotiating at the moment, supply chain partnerships, capital flows, but reduce concentrated vulnerabilities.
For instance, this is where diversification of energy sources matters. Entering strategic mineral partnerships, which we are already doing, domestic manufacturing in critical sectors and resilient digital infrastructure, which has been happening before our very eyes over the last few years. These are crucial priorities.
Now, de-risking is not de-coupling; it is intelligent hedging. We must remain open to trade and investment while diversifying partnerships. Competing trade agreements with major economic partners, strengthening ties with ASEAN, Africa, and Latin America, and enhancing export competitiveness are essential.
But integration should not mean dependence. Supply chains should be diversified geographically and technologically. As I have previously stated in a different context, it is a lattice we seek to build, not blocs, which incorporates shock absorbers to deal with overdependency or coercion, as the case may be.
Thirdly, achieve technological sovereignty where it matters most. Technological sovereignty is not a given. It is built. AI, semiconductor fabrication, telecom architecture, space capabilities, cyber resilience—these are not commercial luxuries. They are sovereignty platforms.
We must master the AI stack—from GPUs to data governance to applications—because if we rely entirely on borrowed algorithms and imported silicon, we may gain efficiency but lose autonomy.
Equally important is human capital—education, research ecosystems, and entrepreneurial support. Innovation diplomacy, through joint research initiatives and technology partnerships, should become central to foreign policy.
Fourthly, reform defence and doctrine, operational autonomy requires credible military capability supported by indigenous industry. Interoperability must never mean external control. Procurement reform must align with doctrine. Dependencies must not translate into vulnerabilities. The ability to choose when to fight and when not to fight is also the ultimate test of sovereignty.
Fifthly, invest in societal cohesion and intellectual retooling. Globalisation created a globally aspirational middle class in India. Our openness to the world must be preserved, also to help us sustain strategic autonomy. Foreign policy, of course ultimately, and I say it at the risk of repeating this to everybody else in the room, rests on domestic strength.
Infrastructure, energy security, public health systems, financial stability, and social cohesion are not merely internal concerns; they shape external credibility. Civilisational self-awareness, technological ambition, and social cohesion are not cultural luxuries. They are strategic assets.
A few words about the AI revolution that is unfolding before our very eyes. It should be a wake-up call as key and fundamental for us as the struggle for freedom that Mahatma Gandhi ushered in the early twentieth century.
Some observers have issued a provocative warning: India’s demographic dividend could evaporate unless our young population transitions from exporting labour to exporting AI capability. If our skills remain tied to legacy outsourcing models, the demographic dividend may not fulfil its potential.
Knowledge sovereignty is important. The same technologies can democratise education, healthcare, and agricultural productivity if deployed inclusively. Our education system must produce agile thinkers, not those who merely service global supply chains.
These are provocative warnings, but we cannot afford to ignore them. The AI revolution is not merely technological. It is civilisational, reshaping work, education, power and geopolitics.
Looking ahead, let me conclude with a reflection. The coming decade will be crisis-prone, conflict-ridden, and uneven, but it will also be creative. History shows that new equilibria eventually emerge. The question is whether these equilibria are cooperative or conflictual, inclusive or exclusionary.
India must not approach this era defensively; we have the capacity—economically, diplomatically, and intellectually—to influence that outcome. Not alone, of course, but as a pivotal actor.
The goal is not to choose between globalisation and sovereignty. The goal is to globalise from a position of sovereignty.
Our task is not to nostalgically preserve an old order that has already evolved. Nor is it to retreat into defensive nationalism. It is to shape a new order that accommodates diversity, encourages innovation, and sustains peace.
I am reminded of this line when you think of the atmosphere surrounding us globally today, “Peace is there to sell, but who’s buying?” the line from the Megadeth song.
In such a situation, the future of globalisation, multilateralism, and geoeconomics will not be decided in abstract debates. It will be shaped by choices—policy choices, institutional choices, leadership choices. Those choices begin in forums like this one, where ideas meet experience and dialogue shapes direction.
