Indian Foreign Policy in 2025: A Year of Strategic Stress
Indian foreign policy in 2025 did not turn out as New Delhi had hoped. After a challenging 2024, there was an expectation that foreign policy would regain balance and direction. Diplomacy was supposed to deliver results, trade negotiations were meant to progress, and India’s immediate neighbourhood was expected to stabilise, but that did not happen. As the year went on, India found itself reacting to pressures rather than shaping events.
When Economics Drives Diplomacy
Economic stress became the biggest limitation on India’s foreign policy choices and a defining element of India foreign policy challenges this year. Hopes for better relations with the United States under the second Trump administration quickly faded. Higher tariffs on Indian exports hurt manufacturing sectors that rely heavily on foreign markets. Immigration restrictions worsened these challenges. Reduced remittance flows added stress to India’s finances. Meanwhile, trade negotiations with Washington and the European Union stalled once more.
Energy policy faced similar constraints. India’s increased use of discounted Russian oil initially provided relief during global fluctuations. Over time, however, sanctions pressure limited India’s options. Reducing Russian imports came with clear economic costs, while continuing them posed reputational risks of financing the war.
A Volatile World
Beyond economics, the global strategic environment became less certain. The United States took a more cautious stance toward China and Russia, while offering limited clarity on India’s role in its long-term global strategy. This created uncertainty in New Delhi, where hopes for closer alignment with Washington had been strong.
Concerns grew as discussions of a possible U.S.-China understanding gained momentum. Even the idea of a G-2 style arrangement raised doubts about India’s influence in Asia.
At the same time, international responses to conflicts in Ukraine and Gaza showed a weakening commitment to established norms. Peace initiatives that appeared to favour stronger actors, along with China’s efforts to promote different governance models, indicated a changing global order. For India, this situation revealed the dangers of maintaining strategic ambiguity without a clear articulation of India’s strategic autonomy.
The Neighbourhood Challenge
India’s immediate neighbourhood presented another set of challenges. Terror attacks in Jammu and Kashmir highlighted the ongoing security threats despite years of counterterrorism efforts. While India’s military responses were effective in tactical terms, they did not secure lasting international diplomatic support.
This constant gap between military action and diplomatic backing exposed a broader problem. Force alone does not establish legitimacy, especially in a global environment where narratives and alliances often matter as much as outcomes on the ground.
Political instability in nearby countries further reduced predictability. Protests in Nepal, developments in Bangladesh, leadership changes, and internal crises limited New Delhi’s ability to influence developments in its immediate area. At the same time, shifting defence partnerships involving Pakistan altered the regional security balance.
Rethinking the Path Forward
Indian foreign policy in 2025 did not fail due to inactivity. It fell short because engagement lacked leverage, and symbolism often replaced strategy. Economic pressures, regional instability, and global uncertainty combined to constrain India’s options and test India’s strategic autonomy.
Looking ahead, a recalibration is essential. Diplomacy must prioritise outcomes over appearances. Economic strength and clearly defined strategies should guide external engagement. Most importantly, India must realistically assess its position, recognising both its growing strengths and its present limits.
Through such an approach, India can regain credibility and navigate an international order that is becoming more fragmented and less forgiving
The Analysis Desk at ThirdPol writes on India’s foreign policy choices, strategic constraints, and the shifting global order shaping the region.