In the BRICS Foreign Ministers’ Meeting held in New Delhi in May 2026, External Affairs Minister S. Jaishankar strongly criticised unilateral sanctions, describing them as “unjustifiable” and inconsistent with international law. He highlighted how such coercive measures disproportionately harm developing countries and undermine global stability.
This position is not merely rhetorical. India itself has faced the indirect costs of secondary sanctions, particularly those imposed by the United States and the European Union on Russia. Despite remaining the world’s third-largest economy by purchasing power parity (PPP), India has slipped in nominal GDP rankings amid oil shocks, rupee volatility, and global disruptions linked to weaponised sanctions. These measures impose enduring costs: slowed post-sanctions recovery, diminished investment inflows, disruption of long-gestation projects, and widened technology gaps that take years to close. The weaponisation of sanctions regime often serves narrow self-interest rather than the stated objectives of eliminating terrorism, curbing terror financing, or promoting global welfare.
The Evolving Sanctions Landscape
Sanctions, as policy instruments, aim to influence state behaviour by applying economic, diplomatic, and social pressure without resorting to military force. The UN charter (Article 41) provides legitimacy for multilateral sanctions. However, the proliferation of unilateral sanctions — often driven by geopolitical and techno-economic objectives — has become a defining feature of great-power competition in the contemporary international order.
India has experienced these effects indirectly through Western sanctions on Russia, including exclusion from SWIFT, asset freezes on military-industrial entities, restrictions on shipping and insurance, and broader financial frictions. Such extraterritorial application creates compliance dilemmas for Indian businesses, raises transaction costs, complicates energy imports, and exposes vulnerabilities given India’s heavy reliance on imported oil. These challenges are compounded by the fact that sanctions have long-lasting impacts even after they are lifted: they affect recovery speed by preventing automatic restoration of pre-sanctions growth momentum, reduce the magnitude of new investments, stifle long-term infrastructure and industrial projects that require sustained consistency and capital, and widen technology gaps among sanctioned or affected nations.
Unilateral sanctions also challenge sovereign decision-making. By imposing Western-defined standards on human rights, democracy, rule of law, and governance, they limit policy space for developing nations. This undermines the principle of strategic autonomy that has long guided India’s foreign policy and its engagement with the Global South.
Global Precedents and Defensive Mechanisms
Several major powers have responded proactively by enacting anti-sanctions laws to counter extraterritorial overreach and protect domestic economic actors:
For example, the European Union’s Blocking Statute (Council Regulation (EC) No 2271/96) protects EU operators from complying with certain US sanctions and allows for damages claims.
Russia has strengthened its framework through Article 248.1 of the Arbitrazh Procedure Code, enabling courts to assert exclusive jurisdiction and award compensation, as demonstrated in the 2022 VTB Bank vs. JPMorgan Chase case involving the seizure of US$155.8 million.
China has introduced similar counter-measures to safeguard its entities.
These laws not only shield immediate economic interests but also assert judicial and regulatory sovereignty, serving as important defensive tools in an increasingly fragmented global economic order.
Why India Needs a Dedicated Framework
India currently relies on fragmented instruments: the United Nations (Security Council) Act, 1947 for implementing UN-mandated sanctions and the Foreign Exchange Management Act, 1999 (FEMA), administered by the Reserve Bank of India, for broader economic measures, The Foreign Trade (Development and Regulation) Act, 1992 and The Unlawful Activities (Prevention) Act, 1967. While these provisions are adequate for fulfilling international obligations and selective domestic public policy based sanctions, this patchwork approach is insufficient to address the growing challenge of secondary and unilateral sanctions in a multipolar environment where economic coercion is becoming normalised.
A comprehensive Indian anti-sanctions law would serve multiple strategic purposes: it would protect economic resilience by neutralising extraterritorial effects on Indian entities; enhance deterrence against arbitrary sanctions; and signal India’s commitment to strategic autonomy within BRICS, the Global South, and broader multilateral forums. In an interconnected world of trade and commerce, where enforcement of contracts is a key determinant of attractiveness for foreign capital, such a framework becomes essential to mitigate headwinds created by foreign sanctions.
However, enactment must be approached with caution and strategic foresight rather than impulsive action. Only countries with dominant manufacturing bases and supply-chain leverage have successfully implemented such laws without significant backlash. Evidence from the Hurun Global Unicorn Index 2024 shows Indian founders establishing 109 offshore unicorns India (primarily in the US) versus 67 domestically — a trend that complex new regulations could accelerate if compliance costs rise further. India must therefore avoid exacerbating the existing burden on companies operating across multiple jurisdictions.
India should pursue a sequenced and comprehensive approach
Coalition Building: Lead or actively participate in a coalition of like-minded nations such as BRICS+, Global South partners, and other affected developing economies to develop reciprocal anti-sanctions mechanisms. Collective action would amplify leverage, share best practices, and reduce individual exposure to retaliation.
Institutional Preparedness: Establish a dedicated inter-ministerial Sanctions Response Cell under the Ministry of External Affairs and Ministry of Finance. Create central and state-level compensation funds to support entities and individuals incurring financial losses for complying with anti-sanctions measures.
Regulatory Architecture: Draft legislation that prohibits enforcement of foreign sanctions within Indian jurisdiction, provides for damage claims in Indian courts, includes clear exemptions or safeguards for critical sectors such as energy security, pharmaceuticals, defence, and agriculture and ensures clarity on extraterritorial applicability.
Technological and Financial Resilience: Accelerate indigenous technology development in semiconductors, advanced manufacturing, and defence platforms. Promote digital payment systems, Central Bank Digital Currencies (CBDCs), and independent financial messaging alternatives to reduce reliance on vulnerable networks like SWIFT. India must also build adequate technological capabilities to monitor and counter potential circumvention of anti-sanctions laws through cryptocurrency routes while upholding robust AML/CFT standards.
Compliance Balancing: Incorporate simplified reporting requirements, incentives for domestic manufacturing and Atmanirbhar initiatives, and phased implementation to prevent increased business flight and maintain India’s position as an attractive investment destination.
Strategic Implications
In an era where sanctions have become a default tool of statecraft rather than an exceptional measure, defensive legislation is no longer optional — it is a necessity for middle powers like India seeking to preserve autonomy amid great-power rivalry. For India, this aligns with its civilisational vision of Vasudhaiva Kutumbakam while being grounded in pragmatic realism and multipolar realities.
As BRICS assumes greater prominence under India’s continued active engagement, New Delhi has a unique opportunity to shape emerging norms around sovereign equality, fair economic governance, and resistance to unilateral coercion. Moving forward with deliberation, thorough preparation, and broad stakeholder consultation will ensure that India’s anti-sanctions framework enhances rather than undermines its long-term strategic interests, economic growth, and global standing.
