Context

• After a politically focused 2024, New Delhi anticipated renewed diplomatic momentum, progress on long-pending trade agreements, and greater regional stability in 2025.
• Engagements with major powers such as the United States, China, and Russia, alongside outreach to neighbouring states, suggested confidence and ambition.
• However, by the end of the year, India faced mounting pressures across economic, energy, global, and regional security domains.
• The trajectory of 2025 exposed structural weaknesses and highlighted the limits of performative diplomacy in a rapidly changing international environment.

Economic and Energy Security Challenges

• India’s most severe setbacks emerged in the economic and energy spheres, particularly in relations with the United States.
• Rather than a reset under the second Trump administration, ties deteriorated sharply.
• High tariffs on Indian exports disrupted labour-intensive sectors, leading to job losses and contract cancellations.
• Immigration restrictions further weakened remittance inflows, a vital support for India’s balance of payments.
• Despite early optimism, major trade agreements with the United States and the European Union remained incomplete, underscoring the gap between diplomatic intent and tangible outcomes.
• Energy security became an equally pressing concern. India’s increased reliance on discounted Russian oil initially strengthened supply resilience, but renewed sanctions pressure forced difficult trade-offs.
• The possibility of reducing Russian imports raised economic and reputational risks, recalling earlier disruptions caused by compliance with sanctions on Iran and Venezuela.
• High-profile engagements with Moscow failed to deliver major agreements in defence, energy, or strategic cooperation, reinforcing the limited returns of symbolic engagement amid rising economic coercion.

Shifting Global Strategic Environment

• The global strategic landscape in 2025 grew increasingly unpredictable.
• The United States’ revised National Security Strategy adopted a more cautious tone toward China and Russia while offering limited articulation of India’s broader global role.
• This shift weakened assumptions about deeper strategic alignment with Washington.
• Discussions of a potential U.S.–China G-2 arrangement intensified concerns over India’s position in the Asian balance of power, particularly as traditional U.S. allies also faced diminished attention.
• Simultaneously, the global response to conflicts in Ukraine and Gaza reflected a weakening commitment to the rules-based international order.
• Peace proposals perceived to favour aggressors, combined with China’s push for alternative global governance frameworks, signalled an evolving international architecture.
• For India, these developments highlighted the risks of strategic ambiguity and the need to articulate a clearer vision for global order rather than relying on declining multilateral mechanisms.

Regional Security and Diplomatic Constraints

• India’s immediate neighbourhood became more volatile as the year progressed.
• Terrorist attacks in Jammu and Kashmir demonstrated the persistence of security threats despite years of counterterrorism measures.
• While India’s military responses were tactically effective, they failed to secure strong and sustained international diplomatic backing.
• This gap exposed a recurring challenge: military action alone does not guarantee political legitimacy.
• Regional instability further complicated India’s strategic environment. Political transitions and protests in neighbouring countries reduced predictability and constrained New Delhi’s influence.
• Relations with several regional and extra-regional actors deteriorated, while new defence alignments involving Pakistan altered the regional security calculus.
• Despite active engagement, India struggled to shape outcomes in its immediate periphery, revealing limits to its regional leadership aspirations.

Credibility, Norms, and Foreign Policy Consistency

• A central lesson from 2025 lies in the importance of credibility. India’s external advocacy for democracy, minority rights, and regional stability risks losing force when domestic and regional practices appear inconsistent.
• Normative influence depends on alignment between principles and actions.
• In a world increasingly driven by transactions rather than values, India’s ability to invoke principles rests on normative consistency across both its foreign and domestic policies.

Conclusion

• India’s foreign policy in 2025 was marked by a sharp contrast between early promise and eventual disillusionment.
• External pressures exposed economic and strategic vulnerabilities, while overreliance on symbolism limited diplomatic returns, at the same time, regional instability and global uncertainty constrained India’s strategic choices.
• As New Delhi looks ahead, it must recalibrate its approach by prioritising substance over spectacle, aligning principles with practice, and adopting a realistic assessment of its strategic environment.
• Such adjustments are essential for strengthening India’s credibility and resilience in an increasingly unstable international order.