VIF Report

State of the World

Emerging Trends and Way Forward
An Indian Perspective

Edited by
Anurag Bisen

1
 © Vivekananda International Foundation
Published in 2025 by
Vivekananda International Foundation
3, San Martin Marg | Chanakyapuri | New Delhi - 110021
Tel: 011-24121764 | Fax: 011-66173415
E-mail: info@vifindia.org
Website: www.vifindia.org

Follow us on
Twitter | @vifindia
Facebook | /vifindia

Disclaimer: The paper is the author’s individual scholastic articulation. The author certifies that the
article/paper is original in content, unpublished and it has not been submitted for publication/web upload
elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct.

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form, or by
any means electronic, mechanical, photocopying, recording or otherwise without the prior permission of the
publisher.

2
Table of Contents

Director’s Foreword...................................................................................................................... 5

Editor’s Note.................................................................................................................................. 9

Summary of Policy Recommendations .................................................................................... 11

Major Powers and Global Governance

United States of America..................................................................................................................26

China................................................................................................................................................ 31

Russia............................................................................................................................................... 35

Multilateral Governance................................................................................................................... 37

Neighbourhood

Afghanistan ......................................................................................................................................42

Bangladesh........................................................................................................................................ 45

Bhutan............................................................................................................................................... 48

Maldives............................................................................................................................................ 51

Myanmar........................................................................................................................................... 54

Nepal................................................................................................................................................. 56

Pakistan............................................................................................................................................. 59

Sri Lanka........................................................................................................................................... 62

3
 Regional

Central Asia....................................................................................................................................... 66

West Asia.......................................................................................................................................... 68

Indo-Pacific ...................................................................................................................................... 74

Southeast Asia................................................................................................................................... 77

East Asia............................................................................................................................................ 79

Japan................................................................................................................................................. 79

South Korea...................................................................................................................................... 81

Europe............................................................................................................................................... 83

Africa................................................................................................................................................ 89

Latin America.................................................................................................................................... 92

Arctic................................................................................................................................................. 97

Thematic

Internal Security.............................................................................................................................. 103

Climate Change............................................................................................................................... 105

Technology and Innovation............................................................................................................. 107

Cyber Security................................................................................................................................ 111

Maritime ........................................................................................................................................ 113

Indian Civilisation, Heritage, Arts, and Culture............................................................................. 120

Indian Armed Forces

Indian Army.................................................................................................................................... 123

Indian Navy..................................................................................................................................... 124

Indian Air Force.............................................................................................................................. 128

4
Director’s Foreword

The current state of global politics is characterised relations. How US-China relationship develops
by growing uncertainty, unpredictability, and under Trump will be a major factor in shaping the
danger. The UN Security Council (UNSC) has been world.
criticised for its failure to fulfil its core mission of
maintaining international peace and security. The The conflicts between Russia and Ukraine, as well
key multilateral institutions like the International as the Israel-Hamas war in Gaza1, have evolved into
Monetary Fund (IMF), World Trade Organisation proxy wars involving Russia-NATO and Israel-Iran,
(WTO), and World Bank have been weakening. raising the risk of regional war expansion. Ongoing
The failure of global governance and multilateral civil wars in several countries, including those near
institutions has substantially added to the current India, contribute to global instability. Additionally,
state of anarchy in the world order. the breakdown of nuclear arms control agreements
has raised concerns about the growing danger of
The decline in US-China relations has been likened nuclear conflict, fuelled by reckless discussions
to a new Cold War, signalling the beginning of a about the use of nuclear weapons.
global power rebalancing. Technology rivalries
and competition for control of critical minerals and The US political landscape in 2024 was dominated
materials will shape the contours of this Cold War. by the return of Donald Trump as president.
US-China trade disputes intensified in 2024, with Global attention is riveted on Donald Trump.
heavy tariffs and export restrictions causing friction Most analysts feel that Donald Trump would
and threatening supply chains. Technological prove to be a major disruptor. Despite a robust
competition deepened as the US curbed China’s economic growth during Biden’s presidency and
semiconductor access, prompting retaliatory record-low unemployment, public sentiment was
measures. These developments underscored the marred by inflation concerns. Healthcare debates
growing economic and strategic divisions between persisted around abortion rights, and immigration
US and China, further destabilising international policies remained contentious, while public safety

1. A truce deal has been signed in January 2025

5
 State of the World: Emerging Trends and Way Forward

discussions centred on gun rights amidst increasing enhanced its Indo-Pacific strategy, strengthening
violence. ties with India and countering China’s influence.

Russia’s political and military landscape remained India’s strategic landscape in 2024 was shaped
turbulent even as President Vladimir Putin secured by its proactive engagement with global powers
his fifth term. The ongoing Russia-Ukraine war and regional neighbours. While opportunities for
intensified, with Russia adopting more aggressive technological and trade partnerships emerged,
tactics following significant Western military aid challenges like border security and balancing
to Ukraine. Internally, terrorist attacks highlighted relations with China remained pressing. India’s
security vulnerabilities. Meanwhile, the BRICS leadership in multilateral institutions and climate
Kazan Summit bolstered Russia’s international diplomacy reinforced its global standing, aligning
standing. with its vision for a multipolar world order.
India’s Act East Policy and Indo-Pacific initiatives
China’s global influence continued to grow in emphasised deeper ties with ASEAN and Quad
2024, with significant economic and military nations to counterbalance China’s assertiveness.
developments. Beijing’s assertiveness in the Indo-
Pacific, including activities in the South and East India’s neighbourhood has become increasingly
China Sea, raised concerns of increasing possibilities unstable, with events such as the Myanmar coup,
of conflict. Technological advancements in areas Taliban’s return to power in Afghanistan, ongoing
like AI and quantum computing reinforced China’s unrest in Pakistan, Sri Lanka’s government
competitive edge, though economic challenges, overthrow, and political shifts in Nepal, the
including a slowing real estate sector, persisted. Maldives, and Bangladesh. With the overthrow
China’s Belt and Road Initiative (BRI) expanded, of Sheikh Hasina government in 2024, the most
particularly in Africa and Southeast Asia, but alarming emerging threat appears to be a collusive
faced pushback in some regions due to debt-trap approach between China, Pakistan and Bangladesh.
diplomacy concerns. These developments collectively pose a significant
and consistent security threat to India. The volatility
The Ukraine conflict has reinforced Europe’s across the region presents a major challenge to
alignment with NATO and the U.S., while it India’s national security.
seeks greater strategic autonomy amidst growing
vulnerability. Europe’s declining military and The country’s emphasis on technological self-
economic capacity has heightened reliance on U.S. reliance, sustainable development, and strategic
leadership, though the incoming Trump presidency autonomy highlighted its long-term priorities.
may alter these dynamics. The EU narrowly avoided
a recession in 2024, with modest growth and Internal security challenges in regions like Jammu
investments in renewable energy aiding recovery. & Kashmir, as well as threats from terrorism and
Europe made strides in climate action, advancing organised crime, continued to demand India’s
the European Green Deal and the Carbon Border attention in 2024. Efforts to counter radicalisation,
Adjustment Mechanism. Additionally, the EU narcotics trafficking, and left-wing extremism were

6
 State of the World: Emerging Trends and Way Forward

bolstered through policy reforms and international Economic and developmental assistance
collaborations. should focus on small-scale projects and digital
infrastructure for South Asia. Regional integration
The threats posed by non-traditional security issues efforts, such as reassessing BIMSTEC and
are significant, with the continued impact of the reviving SAARC, should be prioritised, along with
COVID-19 pandemic and the emergence of new enhanced strategic communication and maritime
public health emergencies such as HMPV. Climate strategies. Long-term policies should address
change and extreme weather events are also as youth, connectivity, and climate change, while
major threat multipliers, with potentially severe strengthening area studies and security-focused
consequences for international peace and security. training.
There are concerns about the assumption that
emerging technologies like AI, synthetic biology, India needs to considerably step up its engagement
and quantum technology are inherently beneficial, in Latin America.
as they carry risks if not properly managed.
Generative AI, for example, could increase the India should prioritise innovations in Directed
likelihood of fraud, contribute to economic and Energy Weapons, quantum communications,
organised crime, and empower cybercriminals and hypersonic missiles while enhancing ISR,
to create more convincing phishing emails and electronic warfare, unmanned systems, and
realistic audio, visual, and video content. Generative AI capabilities.

Building military-industrial capacity, establishing

To enhance regional security and cooperation,
ammunition factories, and conducting reserve
a careful assessment of India’s foreign policy is
mobilisation exercises will prepare India for
necessary.
protracted conflicts. Strategies for urban warfare,
underground protection structures, and credible
A framework for fostering stability in the
military deterrence are essential, along with
neighbourhood is crucial. India should tailor
reinforcing military posture and nuclear deterrence
its approach to individual countries, strengthen
during peacetime. Enhancing air defence,
regional relationships, engage strategically with
supporting defence tech startups, developing
global powers like the U.S., and address Chinese
a drone arsenal, and building semiconductor
presence in Ladakh.
capabilities are key.

India should strengthen capabilities in technology, Increased defence expenditure, domestic

defence, IT, and energy to compete with China, manufacturing, and maritime capability investments
while reducing reliance on Chinese-centric supply should be pursued, alongside strengthening space
chains. capabilities. Encouraging private sector R&D will
enhance defence capabilities.
India should monitor major power conflicts,
particularly the U.S.-Russia rivalry and China’s India should integrate economic, legal, military,
influence in West Asia. and intelligence expertise into national security.

7
 State of the World: Emerging Trends and Way Forward

Efforts to dismantle terrorism-supporting networks and civil-military fusion. Additionally, strategic

in Jammu and Kashmir, Punjab, and Northeast India communication, procurement, recruitment, and
must continue, alongside countering radicalisation. internal frameworks should be strengthened for
effective decision-making and capability building.
Preparedness for Chinese-Pakistani collusion
and monitoring Bangladesh’s radical elements A whole of nation approach would be required for
is critical. A national defence strategy should India to obtain its rightful place in the comity of
streamline plans, and armed forces reforms nations in the coming years.
should focus on cross-domain asset utilisation

Dr Arvind Gupta
Director, VIF

8
 State of the World: Emerging Trends and Way Forward

Editor’s Note

The inaugural Vivekananda International climate change and the environment, along with
Foundation’s (VIF) State of the World: Emerging advancements in technology and innovation.
Trends and Way Forward report offers an These include domains like cybersecurity, space
analytical and comprehensive analysis of global exploration, artificial intelligence, semiconductors,
and regional developments, trends, and policy hypersonic, drones, and autonomous weapon
dynamics, through an Indian lens. systems. It also scrutinises internal security
issues such as Jammu & Kashmir, terrorism,
The report conducts a wide-ranging global scan, radicalisation, narcotics, organised crime, and
covering the major powers—namely the USA, Left-Wing Extremism (LWE). In addition, the
China, and Russia—and examines the functioning report places emphasis on India’s rich civilisational
of key global institutions, such as the United heritage, arts, and culture, highlighting significant
Nations General Assembly (UNGA), United developments in these domains.
Nations Security Council (UNSC), World Trade
Organisation (WTO), International Monetary Fund Each section is systematically structured into four
(IMF), United Nations Human Rights Council key components:
(UNHRC), and mechanisms related to nuclear and
global disarmament. Additionally, it delves into
1. Annual Review: A comprehensive
multilateral platforms such as BRICS. Under the
narrative summarising significant events
regional scan, the report provides detailed insights
and developments of 2024 across various
into India’s neighbourhood, including Afghanistan,
regions and sectors.
Bangladesh, Bhutan, Maldives, Myanmar, Nepal,
Pakistan, and Sri Lanka, while also analysing
2. Implications for India: An exploration of
developments across Central and West Asia,
how these global and regional developments
Southeast Asia, East Asia, Europe, the Indo-Pacific,
align with or challenge India’s strategic and
Africa, North America, Latin America, and the
national interests.
Arctic.

Beyond geopolitics, the report takes a thematic 3. Prognosis for 2025: A forward-looking
approach, exploring critical areas such as assessment of anticipated trends and

9
 State of the World: Emerging Trends and Way Forward

challenges shaping the global and regional strikes a balance between depth and accessibility.
landscape in the coming year. By contextualising global events within India’s
strategic priorities, it delivers nuanced perspectives
4. Policy Recommendations: Actionable and practical insights that are both relevant and
strategies and guidance to help policymakers actionable.
address emerging opportunities and
mitigate risks effectively. For busy eyes, section wise abridged
recommendations have been provided in the
This framework ensures that the report not only beginning of the Report.
provides information but also empowers readers to
engage with complex global issues from a distinctly The State of the World: Emerging Trends and
Indian perspective. Way Forward aspires to be a vital resource,
enhancing understanding of the intricate interplay
Tailored for a broad audience, including between global developments and India’s strategic
policymakers, academicians, think tanks, analysts, objectives, thereby fostering informed discourse
students, and informed laypersons, the report and facilitating impactful decision-making.

10
 State of the World: Emerging Trends and Way Forward

Summary of Policy Recommendations

United States of America disputes, addressing trade imbalances, and

mitigating environmental impacts.
India Should Cautiously Welcome a More
Enhance Economic Collaboration Strengthen ties
Isolationist US Leverage US retrenchment to
in green technology, digital transformation, clean
strengthen India’s position while countering
energy, and joint investments for mutual benefit.
China’s expanding multilateral influence.
Engage in Multilateral Frameworks Actively
India Should Negotiate Exemptions from
participate in BRICS and reform global institutions
Trump Tariffs Proactively seek exemptions from like the UN to adapt to the changing global order.
proposed tariffs while preparing targeted retaliatory
measures. Develop a Comprehensive China Strategy
Bolster military readiness, enhance the defence
India Must Diversify Critical Mineral Sources ecosystem, and evaluate alliances like Quad and
Build resilient supply chains through domestic AUKUS for operational coordination.
development, overseas mining, and multilateral
partnerships.
Russia

Diversify Trade Expand trade beyond defence and

India Should Leverage the iCET for Critical
energy.
Technologies Deepen cooperation with the US
under iCET and explore similar initiatives with Infrastructure Investment India can invest
other global partners. in Russian infrastructure projects, including
transportation and industrial parks.
China
Arctic and Connectivity Projects Expedite
Adopt a Refined Approach to China Foster investments and initiatives in the Arctic and
peaceful coexistence while resolving border connectivity projects.

11
 State of the World: Emerging Trends and Way Forward

Joint Ventures Collaborate in science, IT, green Adopt a Balanced Nuclear and Security
energy, and pharmaceuticals. Approach Engage in global disarmament forums
and strengthen regional security partnerships like
Defence Cooperation Strengthen joint exercises, QUAD.
defence production, and technology transfers.
Expand Soft Power Diplomacy Leverage
Cybersecurity Develop joint research and
initiatives like International Yoga Day and cultural
technologies in cybersecurity.
exchanges to enhance global influence.

Energy Collaboration Diversify energy sources,

including Russian LNG and nuclear energy. Reimagine Global Governance Advocate for
inclusivity, equity, and accountability to address
Rare Earth Minerals Jointly develop critical fragmented global challenges.
minerals for advanced technologies.
Position as a Global Leader Assume a leadership
People-to-People Ties Promote student exchanges, role in the Global South to navigate the Asian
scholarships, and research collaborations. century and intensify regional cooperation.

Think Tank Outreach Expand dialogue at Track

1.5 and Track 2 levels. Afghanistan

Governance Expand Humanitarian Aid Prioritise aid for

food, medical supplies, and education, focusing on
Strengthen Multilateral Engagements Advocate women’s and children’s needs.
for UNSC reforms and equitable climate finance to
address governance challenges. Pressure for Inclusive Governance Link
economic aid to reforms ensuring transparency,
Enhance Regional and South-South Cooperation representation, and women’s workforce
Bolster ties within BRICS, ASEAN, and BIMSTEC
participation.
to counterbalance Western economies and China’s
assertiveness.
Enhance Regional Cooperation Collaborate
Pursue Strategic FTAs Prioritise agreements regionally, especially with India, to combat
with the EU, UK, and Indo-Pacific nations to boost terrorism and advocate for women’s rights.
exports and attract investments.
Set Criteria for Taliban Recognition Consider
Promote Sustainable Financing Utilise green formal recognition only upon inclusive governance,
bonds and innovative financing tools to ensure human rights protections, and peacebuilding
sustainable development. efforts.

12
 State of the World: Emerging Trends and Way Forward

Bangladesh Enhance Security and Strategic Engagement

Deepen trust through high-level dialogues and use
Engage with Interim Government Proactively platforms like BIMSTEC to improve Bhutan’s
engage with Muhammad Yunus’s government to market access.
support democratic reforms and stability.
Enhance Development Partnership Prioritise
Strengthen Economic Ties Address trade skill development, educational exchanges,
imbalances, support infrastructure, and resolve the
and infrastructure support to address youth
Teesta water-sharing dispute.
unemployment and connectivity needs.

Address Security and Minority Rights Advocate

Leverage Climate and Renewable
for minority safety and use platforms to promote
Energy Collaborate on renewable energy
social harmony in Bangladesh.
projects, combining India’s solar expertise with
Adapt to Foreign Policy Shifts Rebuild trust to Bhutan’s hydropower resources.
counter Bangladesh’s tilt towards Pakistan and
strengthen ties. Navigate Evolving Challenges Proactively
address Bhutan’s changing political and economic
Promote Regional Cooperation Revive SAARC dynamics to ensure regional stability and mutual
to enhance dialogue, counter extremism, and growth.
resolve shared issues.
Maldives
Strengthen Border Security Monitor extremist
threats and enhance border security to safeguard Maintain Recovery in Relations Support
national interests. Maldives’ economic recovery by diversifying
revenue sources and fostering development-led
Counter Anti-India Sentiment Use diplomacy,
cooperation while countering external influences.
partnerships, and soft power to maintain goodwill
and stable relations.
Enhance Maritime Cooperation and
Security Deepen ties through joint surveillance,
Handle Extradition Sensitively Navigate Sheikh
counterterrorism, disaster preparedness, and
Hasina’s extradition issue carefully to preserve
climate resilience initiatives in the Indian Ocean
balanced ties.
Region.
Bhutan
Strengthen Socio-Economic Partnerships
Strengthen Economic Collaboration Expedite Invest in sustainable development, renewable
hydropower projects, support Bhutan’s energy energy, and eco-tourism, alongside cultural
exports, and encourage private investments in exchanges and skill-building programmes for
tourism, agriculture, and technology. Maldivian youth.

13
 State of the World: Emerging Trends and Way Forward

Boost Multilateral Engagement Leverage forums Enhance Economic and Energy Cooperation
like SAARC and IORA for collaborative climate Invest in cross-border power grids, hydropower,
and blue economy projects, and explore a Bilateral and renewable energy to boost electricity trade in
Free Trade Agreement for seafood imports. the region.

Address Maldivian Concerns Reaffirm India’s Bolster Trade Relations Reduce non-tariff barriers
commitment to mutual growth and security, and encourage Indian investments in hydropower,
aligning with the Vision for a Comprehensive agriculture, and tourism in Nepal.
Economic and Maritime Security Partnership.
Support Political Stability Assist Nepal’s
Myanmar government with governance reforms, capacity-
building, and anti-corruption measures to foster
Broader Engagement with Stakeholders stability.
Expand dialogue with the NUG, EAOs, and local
communities, leveraging Northeast Indian states’ Deepen Security and Border Management
connections for regional cooperation. Collaborate on counterterrorism, anti-smuggling,
and border management while modernising Nepal’s
Reassess Border Management Prioritise military infrastructure.
advanced surveillance and temporary fencing
to regulate crossings without alienating border Navigate Foreign Policy Dynamics Provide
communities. alternatives to Chinese financing while respecting
Nepal’s sovereignty to counter external influences.
Support ASEAN-Led and Myanmar-Led
Initiatives Balance backing for ASEAN’s Five- Strengthen Cultural Ties and Regional
Point Consensus with support for Myanmar-led Integration Promote cultural exchanges, tourism,
resolutions to facilitate peace. and Nepal’s active participation in regional forums
like SAARC and BIMSTEC.
Focus on Local Development and Resilience
Redirect development aid to empower local Pakistan
communities and enhance stability in Myanmar.
Strengthen Border Security Enhance surveillance
Nepal and intelligence-sharing with Afghanistan and
neighbouring countries to combat cross-border
Strengthen Bilateral Relations Adopt a terrorism effectively.
comprehensive approach to enhance ties with
Nepal, addressing political and economic Bolster Counter-Terrorism Diplomacy Deepen
developments. cooperation with key Western powers, especially

14
 State of the World: Emerging Trends and Way Forward

the United States, to curb regional militant Address Strategic Concerns with China Monitor
activities. Sri Lanka’s ties with China, ensuring transparency
in critical infrastructure investments to safeguard
Monitor Political Dynamics Track Pakistan’s India’s maritime interests.
political landscape closely to anticipate potential
regional spillovers and manage risks. Support Tamil Ethnic Reconciliation Advocate
for the full implementation of Sri Lanka’s
Prepare for Economic Fallout Strengthen border Constitution, particularly the 13th Amendment, to
infrastructure and local economies to manage risks foster ethnic peace and autonomy.
related to refugee influx and economic instability
from Pakistan. Support a Balanced Foreign Policy Encourage
Sri Lanka to maintain a balanced foreign policy,
Counter China’s Influence Remain vigilant prioritising regional cooperation and avoiding
over the China-Pakistan Economic Corridor and over-reliance on any one country.
collaborate with regional partners to safeguard
India’s interests. Engage in Constructive Dialogue on Debt and
External Relations Offer diplomatic support in Sri
Sri Lanka Lanka’s debt management and promote a pragmatic
approach to debt restructuring.
Diversify and Expand Economic Engagement
Build on existing trade agreements with Sri Lanka, Foster Cultural and Educational Exchanges
focusing on energy and infrastructure sectors to Promote people-to-people exchanges and
enhance recovery and strategic leverage. educational initiatives to strengthen bilateral ties
and mutual understanding.
Support Sri Lanka’s Economic Recovery
Continue providing financial and technical support, Leverage Diaspora Communities Engage with
particularly through concessional loans and the Indian-origin diaspora in Sri Lanka to enhance
renewable energy partnerships. cultural and trade relations.

Bolster Security Ties and Regional Frameworks Be Attuned to Political Shifts in Sri Lanka
Strengthen ties with Sri Lanka in regional security Monitor political developments and adapt support
frameworks like IORA, Colombo Security to align with the aspirations of the Sri Lankan
Conclave, and BIMSTEC for enhanced maritime people.
security.
Balance Diplomacy on Security Concerns
Collaborate on Maritime Security Align on Address security concerns diplomatically
maritime security initiatives to combat piracy, and maintain high-level dialogues to ensure
trafficking, and threats to regional stability. transparency in security arrangements.

15
 State of the World: Emerging Trends and Way Forward

Maintain High-Level Diplomatic Engagement Agreement and expand the India-Middle East-
Regular visits by senior Indian officials to Sri Europe Economic Corridor to enhance trade
Lanka will strengthen bilateral relations and ensure opportunities.
alignment on key issues.
Leverage Regional Connectivity Initiatives
Central Asia Operationalise projects like the INSTC, IMEC, and
Chabahar Port, integrating Palestinian territories
Reassess India’s Policy Toward Central Asia into IMEC for reconstruction efforts.
Reevaluate and enhance India’s approach to Central
Asia by resuming delayed dialogues at foreign Diversify Economic Partnerships Encourage
minister and heads of state levels. investments in non-oil sectors and facilitate joint
ventures in R&D, particularly in biotechnology and
Diversify Trade and Strengthen Economic pharmaceuticals.
Relations Diversify India’s export and import
portfolio to ensure a balanced trade relationship Attract Investments from GCC Countries
and focus on investment opportunities in Central Showcase high-return infrastructure projects and
Asia’s manufacturing sector. implement investor-friendly policies to attract
investments from Saudi Arabia and the UAE.
Expedite Chabahar Port Development
Accelerate the development of Chabahar Port to Enhance Labour Mobility and Tourism Develop
improve connectivity and encourage Central Asian policies to streamline labour mobility and expand
nations to participate in this initiative. aviation connectivity to boost tourism and support
the Indian economy.
Enhance Defence Cooperation Offer defence
training and explore opportunities to export defence Develop a Regional Security Framework
equipment to Central Asian countries, responding Deepen intelligence-sharing and counterterrorism
to their increased defence budgets. cooperation with key partners and build a multi-
aligned regional security framework.
Strengthen Soft Power in Central Asia Enhance
soft power by increasing educational scholarships, Contribute to Israel-Palestine Peace Efforts
promoting cultural exchanges, and supporting Advocate for a two-state solution and use platforms
tourism initiatives to foster people-to-people like I2U2 to promote economic development in
connections. Gaza and the West Bank.

West Asia Enhance Strategic Partnerships with Key

Players Strengthen defence cooperation with the
Strengthen Economic Engagement Accelerate UAE and Saudi Arabia, focusing on renewable
negotiations for the India-GCC Free Trade energy and technology collaboration.

16
 State of the World: Emerging Trends and Way Forward

Manage China’s Influence Position IMEC and Quad nations, focusing on maritime security and
INSTC as alternatives to China’s Belt and Road counterterrorism, while establishing an India-
Initiative and enhance partnerships with GCC ASEAN cybersecurity framework.
nations.
Accelerate Key Infrastructure Projects Prioritise
Align with the United States Strategically the completion of strategic initiatives like the
Coordinate on counterterrorism and cybersecurity India-Myanmar-Thailand Highway and port
while addressing policy divergences regarding Iran developments to align with regional connectivity
and China. objectives.

Address Geopolitical Challenges Monitor Iran’s Strengthen Naval Modernisation Increase

regional activities and prepare for potential shifts investments in naval capabilities and conduct joint
in its foreign policy and the Israel-Hamas conflict. maritime patrols with ASEAN and Quad forces to
secure vital shipping lanes.
Adopt a Comprehensive Regional Policy Shift
from a bilateral to a cohesive regional approach, Foster Digital Infrastructure Development Lead
engaging with regional organisations and a regional initiative to develop secure 5G networks
enhancing India’s role in BRICS. and improve data governance across Southeast
Asia.
Invest in Regional Expertise Establish divisions
in think tanks to study West Asia and provide Support Renewable Energy and Climate
policy-relevant insights. Adaptation Provide technical and financial
assistance for renewable energy projects in ASEAN
Leverage India’s Strengths Utilise the Three Ds countries and organise an Indo-Pacific Climate
Framework (Demography, Diversity, Development Resilience Forum.
Diplomacy) to drive partnerships and initiatives.
Promote Cultural Exchanges Establish India-
Address Capacity Issues Invest in naval ASEAN cultural centres to deepen mutual
capabilities and enhance regulatory frameworks to understanding and enhance India’s soft power in
attract global investments. the region.

Prepare for Contingencies Develop strategies Encourage Innovation Partnerships Launch

to address potential disruptions in West Asia, a regional initiative to support innovation in AI,
ensuring regional stability through strengthened blockchain, and fintech by collaborating with
partnerships. ASEAN countries and nurturing digital startups.

Indo-Pacific Southeast Asia

Enhance Joint Military Exercises Expand Review AITIGA Prioritise a comprehensive

collaborative military drills with ASEAN and review of the ASEAN-India Trade in Goods

17
 State of the World: Emerging Trends and Way Forward

Agreement (AITIGA) to address trade imbalances international laws in the South China Sea, including
and improve market access through tariff reductions UNCLOS.
and removal of non-tariff barriers.
Address Myanmar Crisis Engage with ASEAN
Diversify Export Portfolio Diversify India’s to address the Myanmar crisis and ensure stability
export portfolio to include high-value products along the shared border, promoting regional peace
such as pharmaceuticals, processed food, and and safeguarding security interests.
engineering goods to strengthen economic ties with
ASEAN. Support ASEAN Centrality Actively support
ASEAN centrality and work within regional
Enhance Domestic Competitiveness Focus on frameworks to address shared challenges, ensuring
improving infrastructure, boosting productivity, India’s long-term strategic presence in the region.
and fostering skill development to enhance India’s
competitiveness.
East Asia
Expedite Infrastructure Projects Accelerate the
Japan
completion of key infrastructure projects like the
Trilateral Highway and the Kaladan Multi-Modal
Accelerate Defence Technology Co-Development
Transit Transport Corridor to enhance connectivity.
Co-develop defence technologies such as the
Unified Complex Radio Antenna (UNICORN) and
Engage in Regional Value Chains Actively
unmanned systems, while expanding cooperation
participate in ASEAN-centric regional value chains,
in ship maintenance and advanced robotics.
leveraging expertise in information technology and
renewable energy.
Establish Secure Supply Chain Frameworks
Create bilateral frameworks for secure supply
Strengthen Defence Cooperation Increase the
chains in critical technologies, including
frequency and complexity of joint military exercises
semiconductors, rare earths, and clean energy.
and expand defence technology collaborations
to enhance interoperability with Southeast Asian
Develop Partnerships in Emerging Technologies
nations.
Collaborate in emerging areas like quantum
Establish Logistics Support Agreements computing, artificial intelligence, and 5G/6G
Explore logistics support agreements with key technology.
ASEAN partners to facilitate naval operations and
strengthen maritime security. Enhance Maritime Security Collaboration
Improve collaboration on maritime security by
Uphold Freedom of Navigation Advocate sharing real-time information in the Indo-Pacific
for freedom of navigation and adherence to through initiatives like the Quad.

18
 State of the World: Emerging Trends and Way Forward

Co-Develop Satellite Technologies Build exchange programs, academic collaborations, and

on existing dialogues to co-develop satellite cultural initiatives, such as upgrading the Queen
technologies and enhance cyber resilience through Suriratna monument in Ayodhya.
joint initiatives addressing cyber threats.
Focus on Critical Technologies Enhance
Update Security Cooperation Framework cooperation in critical technologies like AI,
Revise the 2008 Joint Declaration on Security semiconductors, and green hydrogen, leveraging
Cooperation to address contemporary challenges the complementary strengths of both countries.
such as cyber threats, economic security, hybrid
warfare, and space security. Europe

South Korea Collaborative Initiatives in Clean Energy: India

should partner with Europe on solar, wind, and
Leverage Technological Expertise Utilise South hydrogen projects to enhance energy security and
Korea’s technological expertise and manufacturing competitiveness while addressing challenges like
capabilities alongside India’s growing economy to CBAM.
foster mutual economic growth.
Advancing Trade Relations and the India-
Upgrade CEPA Enhance the Comprehensive EU FTA: India must expedite the India-EU and
Economic Partnership Agreement with a target of UK-India FTAs to strengthen trade and secure
achieving $50 billion in trade by 2030. favourable terms, focusing on sustainability
sectors.
Expand Cooperative Initiatives Collaborate on
initiatives like ‘Make in India,’ ‘Skill India,’ ‘Smart Multilateral Approaches to Global Challenges:
Cities,’ and ‘Startup India,’ utilising South Korea’s India should collaborate with the EU on climate
Economic Development Cooperation Fund for change, human rights, and international security,
infrastructure projects. advocating for multilateral solutions.

Strengthen Military Cooperation Enhance Africa

military exchanges, joint training, and experience-
sharing to bolster regional security and stability. Enhanced Political and Diplomatic Engagement
Increase political and diplomatic outreach to
Collaborate on R&D Work together on research Africa, ensuring high-level visits from both Indian
and development in innovative technologies, and African leaders, particularly in the context of
including defence, robotics, and renewable energy. the 4th India-Africa Forum Summit.

Promote People-to-People Ties Strengthen Multilateral Cooperation Advocate for African

people-to-people connections through youth membership in groups like the G20, BRICS, and

19
 State of the World: Emerging Trends and Way Forward

the International Solar Alliance (ISA) to strengthen Space Sector Collaboration Establish partnerships
multilateral ties. between India’s ISRO and African agencies for
technology sharing and satellite capacity in the
Expansion of Defence Engagement Broaden space sector.
defence collaborations with increased funding
and lines of credit for African nations, prioritising Latin America
enhanced joint maritime exercises in West Africa.
Comprehensive Latin America Strategy Create
country desks for major Latin American economies
Cooperation in Food Security and Agriculture
with sector-specific plans and quarterly ministerial
Collaborate with African on food security and
dialogues.
agricultural development through initiatives
like ICRISAT and climate-resilient agricultural
Expanded Diplomatic Presence Establish new
infrastructure. consulates, deploy economic attachés, form
advisory boards with diaspora and business leaders,
Development of Digital Infrastructure Enhance and create cultural centres to strengthen ties.
digital infrastructure through projects like the Pan
African e-Network Project (PANeP) and foster Institutional Strengthening Staff the Latin
partnerships in the fintech sector. America desk with language-proficient officers,
provide specialised training, enhance intelligence
Strengthening Healthcare Ties Continue gathering, and engage with the private sector.
healthcare initiatives such as e-Arogya Bharti
and Vaccine Maitri, building on previous vaccine Critical Minerals Security Programme Establish
distributions to African countries. a $5 billion sovereign fund for mineral investments,
joint exploration ventures, and supply chain
Collaboration on Green Economy Initiatives security protocols.
Partner in areas like clean energy, electric vehicles,
Trade Enhancement Framework Create trade
smart cities, and green hydrogen to promote a
facilitation offices, digital platforms, and export
sustainable future.
promotion strategies with regional banks.

Partnership in Critical Minerals Secure a

Investment Protection Mechanisms Establish
steady supply of critical minerals by partnering investment protection agreements, dispute
with African mining companies and formalising resolution frameworks, and political risk insurance
agreements in resource-rich countries. systems.

Educational Initiatives Strengthen educational Research Collaboration Framework Create

ties by fulfilling the commitment to provide joint research funding, researcher exchanges, and
scholarships for 50,000 African students. innovation incubation centres.

20
 State of the World: Emerging Trends and Way Forward

Tech Workforce Development Establish such as AI-powered drones and thermal imaging
specialised visa centres, skill verification systems, systems, to prevent infiltration.
and language training facilities.
Strengthen Grassroots Initiatives Foster trust
Long-term Energy Partnerships Develop joint between state administration and local communities
exploration ventures, processing partnerships, and to effectively address local grievances.
transport infrastructure for energy security.

Engage Local Influencers Utilise local influencers

Renewable Energy Collaboration Launch joint
and social media campaigns to develop counter-
solar and wind projects, establish biofuel research
narratives against extremist ideologies.
centres, and develop green hydrogen initiatives.

Arctic Collaborate with Tech Companies Partner

with tech companies to improve monitoring and
Enhance Arctic Engagement Increase Arctic disruption of online radicalisation activities.
involvement to safeguard national interests and
strengthen ties with Western Arctic nations like the Implement Community Policing Encourage
US, Norway, and Canada. community policing and active engagement
to create a trustworthy network for valuable
Deepening India-Russia Arctic Cooperation
intelligence.
Bolster bilateral collaboration with Russia to
address energy security needs and access rare
Enhance International Cooperation Strengthen
earth and strategic minerals, providing Moscow
international ties, especially with Western
alternatives to China.
countries, and leverage the diaspora to counter pro-
Expanding Influence in the Arctic Council Khalistan groups.
Actively participate in Arctic Council Working
Groups and advocate for the resumption of the Promote Cultural Integration Develop initiatives
Council’s activities while pushing for an enhanced for cultural integration to challenge and reduce the
role for Observer States. influence of pro-Khalistan ideologies.

Reforming the Arctic Council Work towards Reinforce Laws and Regulations Strengthen
broader reform of the Arctic Council, including laws and regulations to effectively address various
seeking full membership to solidify India’s position dimensions of organised crime.
as a significant stakeholder in Arctic governance.
Launch Anti-Narcotics Campaign Initiate
Internal Security
a nationwide “anti-narcotics” campaign in
Invest in Surveillance Technologies Enhance educational institutions to raise awareness about
R&D for advanced surveillance technologies, drug abuse risks.

21
 State of the World: Emerging Trends and Way Forward

Climate change systems, establishing innovation hubs for next-

generation military technologies.
Implement Climate-Resilient Solutions
Accelerate climate adaptation efforts by prioritising Engage in Global Governance Actively
nature-based solutions like reforestation, mangrove participate in international technology governance
restoration, and wetland regeneration, while to shape global standards and expand Science &
investing in climate-resilient infrastructure and Technology counsellor roles in foreign missions.
early-warning systems.
Foster Global South Cooperation Collaborate on
Strengthen Data Collection on Extreme Weather joint R&D projects and talent development with
Impacts Establish a comprehensive public developing nations to enhance ties and position
database to accurately quantify losses from extreme India as a leader in inclusive innovation.
weather events, improving disaster management
and evaluation through credible, actionable data. Cyber Security

Technology and Innovation Strengthening Cybersecurity for Critical

National Infrastructure (CNI) Increase
R&D Investment Increase R&D expenditure
investments in Operational Technology (OT)
to 2-4% of GDP by enhancing funding for public
systems, adopting AI for real-time monitoring and
research institutions and incentivising private
Zero-Trust architectures to enhance security.
sector innovation.

Boosting Indigenous R&D and Innovation

Workforce Development Strengthen STEM
Promote ‘Make in India’ and the ‘AI Mission’
education and technical training, focusing on AI,
to support startups in developing cybersecurity
space, and semiconductors, while collaborating
technologies, including AI, Machine Learning,
with global universities for quality enhancement.
quantum, and blockchain solutions.
Business and Investment Climate Simplify
regulatory processes and expand the Production- Enhancing Legal Framework and Cyber
Linked Incentive (PLI) scheme to attract domestic Awareness Establish sector-specific cybersecurity
and foreign investments in emerging technologies. laws and launch a nationwide cyber-hygiene
campaign in schools, universities, and NGOs to
Strengthen International Collaborations reduce individual vulnerabilities.
Leverage strategic partnerships with the US, Japan,
and Israel to facilitate FDI, technology transfer, and Strengthening CERT-In and Proactive Cyber
joint ventures in high-tech industries. Defence Invest in expanding CERT-In’s technical
capabilities and workforce, and conduct routine
Defence Modernisation Invest in dedicated R&D penetration testing and cyber drills for critical
for hypersonic technology and advanced defence infrastructure operators.

22
 State of the World: Emerging Trends and Way Forward

Building a Resilient Cyber Ecosystem Prioritise majority nations by organising exhibitions of Lord
cybersecurity initiatives by adopting global best Buddha’s relics in key countries.
practices and enhancing indigenous capabilities to
protect digital infrastructure and citizens’ safety by Preserve Shared Heritage in Southeast Asia
2025. Invest in conserving Hindu and Buddhist temples
across Southeast Asia to deepen cultural ties.
Maritime
Strengthen Archaeological Preservation
Strengthen Maritime Infrastructure Accelerate
the modernisation of major ports to increase cargo Enhance funding for the Archaeological Survey of
handling capacity and reduce turnaround times. India for excavation, restoration, and technological
modernisation.
Support Shipbuilding Industry Extend financial
incentives under the Shipbuilding Financial Repatriate Cultural Property Advocate for
Assistance Policy to include emerging technologies the return of cultural treasures looted during the
like autonomous ships. colonial period, including those held by the British
Museum.
Promote Sustainable Blue Economy Invest in
R&D for marine biotechnology, offshore renewable Expand UNESCO World Heritage Sites Prioritise
energy, and deep-sea mining while implementing
increasing India’s UNESCO World Heritage Sites
regulations to prevent overfishing.
to reflect its rich cultural and geographical diversity.
Enhance Maritime Trade and Connectivity
Negotiate new trade agreements with key partners
Indian Army
to boost exports and imports while simplifying
Establish a Long-Term Defence Industrial Base
customs and regulatory procedures.
Implement a structured approach to build a strong,
Strengthen Maritime Security Increase the Indian independent defence industrial base aligned with
Navy and Coast Guard budget share to safeguard the Indian Army’s evolving requirements.
critical sea lanes and establish joint maritime
surveillance initiatives with friendly nations. Invest in Specialised Training and Human
Resources Prioritise investment in specialised
Enhance Cybersecurity Implement enhanced training and create dedicated human resource
cybersecurity measures to protect maritime cadres to enhance operational capabilities over
infrastructure from potential cyberattacks.
time.

Indian Civilisation, Heritage, Arts, and

Update Strategies and Doctrines Develop and
Culture
publicly share updated strategies and doctrines to
Counter China’s Strategic Use of Buddhism enhance deterrence and guide modernisation efforts
Proactively foster connections with Buddhist- against technologically advanced adversaries.

23
 State of the World: Emerging Trends and Way Forward

Evaluate the Agniveer Initiative Conduct a Enhance Undersea Domain Awareness (UDA)
thorough review of the Agniveer initiative and Prioritise robust UDA efforts by deploying
human resource policies to ensure sustainability seabed sensors, satellite surveillance, unmanned
and effectiveness in maintaining personnel quality underwater vehicles (UUVs), and anti-submarine
and numerical strength. warfare (ASW) assets.

Ensure Operational Readiness Maintain adequate Enhance Maritime Domain Awareness

staffing and operational capability along the LOC (MDA) Strengthen MDA capabilities and foster
and LAC to uphold territorial integrity in response international collaboration under the IFC-IOR
to emerging threats. for improved situational awareness and maritime
coverage.

Indian Navy
Develop Forward Operating Bases Upgrade
strategic bases in the Andaman and Nicobar
Enhance Budgetary Allocations Significantly
Islands and Lakshadweep to monitor Chinese
increase budgetary allocations for the Indian Navy
naval activities and respond rapidly to maritime
to match China’s naval capabilities, addressing the
contingencies.
current shortfall in funding.
Leverage Technology and Innovation Invest in
Strengthen Naval Capabilities Expand and technologies such as AI, machine learning, and big
modernise the Indian Navy’s fleet through data analytics to enhance maritime surveillance and
investments in indigenous shipbuilding and decision-making capabilities.
accelerated defence procurement.
Indian Air Force
Provide for Three Carrier Task Forces Establish
three Carrier Task Forces (CTFs) to maintain a The Department of Defence Production should
near-continuous presence in the Indian Ocean closely oversee HAL to ensure timely deliveries of
Region (IOR) for regional security. indigenously manufactured aircraft.

A committee should be formed to monitor the

Strengthen Strategic Partnerships Deepen ties
development work of ADA and DRDO on the
with key powers and IOR nations through the Quad
Tejas Mk II and AMCA, ensuring there are no
and bilateral agreements for base access, training,
delays.
and logistical support.
A decision on the Medium-Role Fighter Aircraft
Expedite P-75I Accelerate the implementation (MRFA) should be made as soon as possible.
of Project 75 India (P-75I) to enhance India’s
underwater defence capabilities with six advanced The possibility of acquiring second-hand airframes
submarines by 2030. of Mirage 2000 and MiG-29 should be explored.

24
 State of the World: Emerging Trends and Way Forward

There should be a renewed emphasis on AWACS Indigenous UAV and UCAV programmes should
and Air-to-Air Refuelling (AAR) projects. be expedited.

The space sector must be prioritised, and a Space There should be an increase in Maintenance,
Command should be established promptly. Repair, and Overhaul (MRO) work on IAF
aviation assets within India.
Industrial capacities created for indigenous systems
like missiles and radars should not remain idle due
Startups involved in manufacturing loitering drones
to a lack of orders; low-rate production should be
and other systems should receive orders promptly
initiated to keep production lines active, preventing
after trials to prevent foreign acquisition.
the need for restart in a crisis.

The indigenous aero engine programme should

be accelerated.

25
 State of the World: Emerging Trends and Way Forward

Major Powers AND Global Governance

United States of America 3.7 percent. The Biden-Harris administration

oversaw 12.6 percent economic growth and the
creation of 16 million jobs, with unemployment
Annual Review
at historic lows. Despite positive metrics, public
The US is undergoing a transformative phase, perception remained negative, driven by inflation
facing challenges from various global regions and and social media narratives. By October, job
internal divisions. Trump’s potential second term openings fell to their lowest since 2021, particularly
will be closely watched, as the country will need to in construction and manufacturing.
strike a balance between foreign policy priorities,
Healthcare Healthcare debates focused on abortion
economic concerns, and public opinion in the
rights and gender-affirming care. Trump’s second-
months ahead.
term agenda emphasised deregulation, market
US Domestic competition, and adjustments to the Affordable
Care Act rather than repeal, signalling a shift in
Presidential Election The 2024 presidential strategy.
election saw Donald Trump return as the Republican
candidate, while Joseph Biden withdrew from the Environment and Climate Change Federal
Democratic race due to health concerns. Vice- initiatives like the Inflation Reduction Act and
President Kamala Harris was nominated but bipartisan Infrastructure Law advanced clean
faced challenges in mounting a comprehensive energy adoption. California remained a leader
campaign. Key issues like the economy, climate in aggressive climate goals, often countering
change, immigration, and healthcare polarised federal rollbacks through partnerships and legal
public opinion. Ultimately, Trump won a historic challenges.
second term.
Immigration The Biden administration ended
Economy In Q3 2024, real GDP grew at an annual Trump-era policies like the Migrant Protection
rate of 2.8 percent, with consumer spending rising Protocols but faced challenges with record migrant

26
 State of the World: Emerging Trends and Way Forward

encounters. Legal immigration saw successes, with Prognosis for 2025

3.5 million new citizens and restored pre-pandemic
admissions. Border enforcement, however, Rollback of Environment and Climate Change
remained contentious, with Republican-led states Policies Trump’s administration is expected to
frequently opposing federal policies. prioritise expanding fossil fuel industries and
reducing environmental regulations to bolster
Gun Violence and Public Safety Gun control economic growth. If Trump withdraws from the
became a divisive issue. Harris advocated for Paris Agreement or the broader UNFCCC, it could
stronger measures alongside Second Amendment weaken US influence in global climate diplomacy,
support, while Trump prioritised defending allowing nations like China to assume leadership
gun rights, gaining strong NRA backing and roles.
emphasising protection after an assassination
attempt. Immigration Reforms Trump plans to pursue
aggressive immigration policies, including
Implications for India completing the border wall and launching large-
scale deportations of unauthorised migrants. These
Birthright citizenship As of the 2020 US census, efforts face significant logistical, financial, and
Indian Americans comprised over 4.8 million legal hurdles. Stricter enforcement and reduced
people, with two-thirds being immigrants and 34 legal immigration pathways are expected to define
percent US-born. Proposed changes to birthright his approach, despite potential legal challenges and
citizenship laws under Trump could significantly public opposition.
impact children born to Indian parents on green
cards or H-1B1 visas. Indians represent the second- Healthcare Reforms Trump’s healthcare
largest group applying for green cards, many agenda will focus on deregulation and tackling
facing lengthy backlogs. In 2019, the Migration pharmaceutical costs, including measures like
Policy Institute reported that 5.5 million children insulin price caps. Intraparty divisions between
lived with at least one undocumented immigrant traditional conservatives and populists could shape
parent, making up over 7 percent of the US child a policy mix blending pro-business and populist
population. approaches, introducing complexity to federal
healthcare policymaking.
Amending birthright citizenship raises concerns
among Indian Americans, particularly for children Challenging Birthright Citizenship Trump aims
who may lose automatic citizenship and face to issue an executive order denying automatic
naturalisation hurdles. Some estimates suggest such citizenship to children of undocumented
changes could adversely affect 1–2 million Indian immigrants. His administration also seeks to
Americans, particularly those in immigration address “birth tourism” and parental responsibility
limbo. for children’s immigration status, though specific

27
 State of the World: Emerging Trends and Way Forward

policy details remain unclear and are expected Chinese EVs, they reflected increasing economic
post-inauguration. friction. China’s retaliatory measures, including
bans on rare mineral exports, threatened global
Job Creation Trump plans to encourage domestic supply chain disruptions.
operations of American companies, focusing on job
creation in the service sector. Collaboration with Technology War Concerns over China’s advances
private sector leaders like Elon Musk and Vivek in autonomous weapons and AI drove US efforts
Ramaswamy could drive workforce retraining and to restrict access to advanced semiconductors.
educational reforms to prepare for future economic Following earlier export restrictions, the US
needs. imposed additional curbs in December 2024,
targeting chipmaking equipment and software.
Addressing National Debt To curb the growing China’s countermeasures, such as mineral export
national debt, Trump is likely to propose measures bans, underscored the deepening technological rift.
such as tax increases, tariffs, and raising the
Russia-Ukraine War US military aid to Ukraine
retirement age. Failure to address the debt could
totalled over $61.4 billion since the 2022 invasion,
strain funding for key sectors like infrastructure
with $31.7 billion from defence stockpiles under the
and defence, impacting future economic stability.
Presidential Drawdown Authority. Key escalations
included the delivery of ATACMS missiles, which
US Foreign Policy in 2024
Ukraine used to strike Russian targets, prompting
Geopolitical and Economic Landscape in 2024 President Putin to lower Russia’s nuclear response
2024 was marked by geopolitical tensions and threshold, heightening tensions.
conflicts, including the Russia-Ukraine war and
Hamas-Israel War After Hamas’ attack on Israel
the Israel-Hamas war, alongside intensifying US-
in October 2023, the US provided a record $17.9
China trade and technology disputes. These crises
billion in military aid and allocated $4.86 billion
strained global security and economies, with the
for regional military operations. Despite advancing
US playing a central role as a major military aid
ceasefire and hostage-release negotiations, US
provider and economic actor.
efforts were rebuffed by both Hamas and Israel,
prolonging the conflict and regional instability.
Annual Review
Implications for India
US-China
The key highlights of India-US relations in 2024
Trade War The US-China trade war escalated, are as follows:
with President Biden imposing steep tariffs on
Chinese products like EVs, lithium batteries, and Bilateral Engagement
semiconductors. By mid-year, tariffs on several
goods rose to 25 percent-100 percent. Although Economy/Trade The 14th Ministerial-level meeting
these measures were largely symbolic in blocking of the India-US Trade Policy Forum (TPF) was held

28
 State of the World: Emerging Trends and Way Forward

in New Delhi on January 12, 2024. Discussions for research projects in biomanufacturing and
included trade facilitation, intellectual property, bioeconomy marked another milestone in
agricultural market access, affordable medical collaborative innovation.
devices, and digital infrastructure. Efforts aimed
at enhancing trade resilience through customs best Diaspora The 11th Consular Dialogue in February
practices were also emphasised. 2024 addressed extradition, student mobility,
migration, and consular services. With 4.4 million
Defence The India-US Defence Acceleration Indian Americans and over 351,000 Indian students
Ecosystem (INDUS X) continued fostering in the US, these dialogues reinforced strong people-
collaboration among defence industries. The 3rd to-people ties.
INDUS-X Summit in September 2024 focused on
co-production of advanced military capabilities, Multilateral Engagements
resilient supply chains, and interoperability for a
free and open Indo-Pacific. A new Memorandum of Fourth Quad Leaders’ Summit Held in
Understanding between the US and Indian defence Wilmington, US, on September 21, 2024, the
innovation units and the launch of an INDUS-X Quad Summit saw leaders from India, Australia,
webpage marked further progress. Japan, and the US reaffirm their commitment
to a free and open Indo-Pacific. Initiatives
Critical and Emerging Technology (iCET) included strengthening maritime security, health
The 2nd iCET Summit in July 2024, chaired by cooperation, and regional logistics, showcasing
the two National Security Advisors, advanced India’s growing role in Indo-Pacific security.
collaborations in AI, quantum technologies,
telecom, biotech, and semiconductors. The meeting Prognosis for 2025
prioritised co-production, co-development, and
R&D in strategic tech sectors. Trade Wars

Culture The first-ever Cultural Property Canada and Mexico On November 25, 2024,
Agreement between India and the US was signed Trump announced plans for a 25 percent tariff on
in July 2024 to combat the illicit trafficking of all imports from Canada and Mexico if they fail
antiquities. India joined 29 other US bilateral to address irregular migration and drug trafficking.
cultural property agreement partners, reinforcing Mexican officials have promised retaliatory
cultural preservation efforts. tariffs, while Canadian Prime Minister Justin
Trudeau warned of severe economic impacts on
Health The inaugural US-India Cancer Moonshot both nations. The US heavily relies on Canadian
Dialogue in August 2024 strengthened biomedical exports, including crude oil, agriculture, and steel,
research cooperation to address global health which would become costlier under the proposed
challenges. Earlier in February, a joint call tariffs.

29
 State of the World: Emerging Trends and Way Forward

The European Union (EU) During his campaign, framework for future support. His administration
Trump criticised the EU, highlighting a $312 billion might push for peace by reducing military aid and
trade deficit. In December 2024, he threatened tariffs proposing compromises like Ukrainian neutrality
unless the EU increases purchases of American oil or territorial concessions. Trump’s Vice President,
and gas. The EU, the US’s second-largest trading JD Vance, advocates for an immediate end to US
partner, may retaliate strongly. Projections suggest assistance and a peace plan favouring Russian
that such a trade war could shrink the EU’s GDP interest.
by 0.5 percent, with Germany, its largest economy,
facing a 3.2 percent contraction. Israel-Hamas War Trump has urged Israeli
Prime Minister Netanyahu to conclude the war
China Trump plans to impose a 60 percent tariff before his 2025 inauguration. While supportive
on Chinese goods, further exacerbating China’s of Israel’s actions in Gaza, Trump’s terms for
economic challenges, including its real estate crisis. peace and his vision for the region remain unclear.
On the technology front, Trump is expected to His administration may embolden annexationist
tighten restrictions on China’s access to advanced factions in Israel, as evidenced by the likely
semiconductor technology. A US-China trade war appointment of figures like Mike Huckabee as
would have widespread economic ramifications, ambassador.
potentially starting in early 2025.
India-US Relations Bipartisan consensus in
BRICS Nations Trump has threatened 100 percent Washington views India as a critical strategic
tariffs on BRICS nations if they attempt to replace partner. However, trade could become contentious
the US dollar in global trade. Although internal under Trump. During his first term, he imposed
disagreements have delayed progress on a BRICS tariffs on Indian steel and aluminium, leading to
currency, Trump’s stance might be a negotiation Indian retaliatory measures on US goods. Recent
tactic rather than a definitive plan. negotiations under Biden resolved many of these
disputes. However, Trump’s plan for a blanket
Global Economic Impact The Kiel Institute for
10 percent tariff on imports might rekindle
the World Economy predicts that a 60 percent US
tensions, with unclear implications for specific
tariff on Chinese goods and a 10 percent surcharge
export categories.
on non-FTA partners would shrink global trade by
2.5 percent in the first year, doubling if retaliation
Policy Recommendations
occurs. Chinese exports could drop by 10 percent,
while US exports may decline by 38 percent.
India Should Cautiously Welcome a More
Isolationist US A more isolationist and anti-
Geopolitical Conflicts
interventionist US under Donald Trump could
Russia-Ukraine War Trump has criticised Biden’s benefit India, but caution is necessary. As the US
extensive aid to Ukraine and suggested a loan-based withdraws from multilateral commitments, China

30
 State of the World: Emerging Trends and Way Forward

may exploit this vacuum, presenting itself as a India should leverage the iCET for Critical
global leader in multilateralism. Through initiatives Technologies The US-India Initiative on Critical
like the Belt and Road Initiative (BRI), BRICS, and Emerging Technology (iCET), launched in
Shanghai Cooperation Organisation (SCO), and January 2023, has advanced bilateral cooperation
the Asian Infrastructure Investment Bank (AIIB), in areas like semiconductors, AI, quantum
China is enhancing its influence, particularly technologies, biotechnology, and clean energy.
in the Global South. Additionally, China might India should capitalise on iCET to secure critical
strengthen ties with the EU, offering collaboration technologies for defence and space sectors. With
in the absence of US reliability. Trump likely to support iCET due to its benefits for
US businesses, India should deepen this partnership
India Should Negotiate Exemptions from Trump and explore similar initiatives, such as the India-
Tariffs Trump’s proposed 10-20 percent universal UK Technology and Security Initiative (TSI) and
tariff on imports could significantly impact trilateral dialogues with nations like South Korea.
Indian exports, including textiles, chemicals,
pharmaceuticals, and engineering goods. India China
should actively negotiate for exemptions while
being prepared to impose retaliatory tariffs on Annual Review
selective US imports. Maintaining strong trade
negotiations will be essential to mitigate the Political In 2024, China marked its 75th anniversary
adverse effects of these tariffs. with a focus on structural transformation,
technological innovation, and sustainable
India Must Diversify Critical Mineral Sources development. The Third Plenary Session of the 20th
India’s heavy reliance on imports of critical CPC Central Committee outlined plans to establish
minerals, including from China, poses risks to its a “high-level socialist market economy” by 2035,
economic and national security. The ongoing global signalling a shift to a mixed economy where private
contest over technology and resources, as seen in enterprises play a vital role in innovation, GDP,
the US-China technology conflict, highlights the and employment. Reforms included Hukou policy
vulnerabilities in supply chains. India must focus updates to improve mobility and social benefits for
20 percent of the population and local government
on diversifying its critical mineral sources by:
budget reforms to enhance financial oversight.
• Developing domestic resources.
China’s anti-corruption campaign intensified,
• Acquiring overseas mining assets.
reporting over 4,000 disciplinary cases, targeting
• Enhancing multilateral cooperation. officials in sectors like finance, energy, and
• Exploring new frontiers. education. High-profile investigations, including
one into Admiral Miao Hua, highlighted the
Building resilient and diverse supply chains is vital focus on institutional integrity and governance
to ensure India’s critical mineral security. enhancement.

31
 State of the World: Emerging Trends and Way Forward

Foreign Affairs China’s diplomatic engagement bomber and drone combat swarms.
emphasised peaceful coexistence and strengthened
global partnerships. Key events included the Defence ties strengthened through joint drills like
Beijing FOCAC Summit and the 70th Anniversary Joint Sea-2024 with Russia and regional exercises
of the Five Principles of Peaceful Coexistence. with ASEAN nations. Despite U.S. tensions, China
President Xi Jinping’s visits to Europe, Central resumed high-level military communication,
Asia, and Latin America expanded cooperation in aiming to reduce misunderstandings. The PLAN
trade, technology, and climate issues. The Global hospital ship “Peace Ark” participated in Mission
Development Initiative attracted 82 countries, Harmony-2024, underscoring China’s role in
and the Global Security Initiative secured 119 global peacekeeping and humanitarian efforts.
participants.
China also accelerated its nuclear arsenal expansion,
China deepened its ties with Russia, holding three increasing warheads from 410 in 2023 to 500 in
high-level meetings between Xi and President Putin. 2024. Integrated training models and drills, such as
Cooperation extended to multilateral platforms Joint Sword-2024B, emphasised joint operations
like BRICS and the Shanghai Cooperation and territorial integrity, with a focus on Taiwan.
Organisation (SCO). Relations with Europe
strengthened through enhanced partnerships with Economic China’s GDP growth moderated to
France, Germany, and other nations, emphasising 4.8% in 2024, hindered by weak domestic demand
free trade and multilateralism. Regionally, China and property sector struggles. The government
advanced ties with ASEAN and India, focusing on implemented monetary easing and fiscal support,
stability and economic collaboration. but low consumer confidence limited their impact.
Efforts to drive high-quality growth included
In its relationship with the U.S., China emphasised
fostering innovation, industrial upgrading, and
stability despite tensions over Taiwan. Strategic
productivity improvements.
communication continued, with collaboration on
climate change and counter-narcotics. President
Externally, China faced rising trade investigations
Xi reaffirmed China’s sovereignty concerns while
in industries like steel and chemicals. The
promoting stable, mutually beneficial relations.
government pursued negotiations and retaliatory
measures while encouraging overseas investments.
Military China continued modernising its military
Companies adapted strategies to mitigate U.S.-
in 2024, restructuring the People’s Liberation
China tensions, with regions like Mexico gaining
Army (PLA) and establishing the Information
appeal.
Support Force (ISF), Aerospace Force (ASF),
and Cyberspace Force (CSF) as distinct branches.
The re-election of U.S. President Donald Trump
Advanced capabilities were showcased at the
increased trade uncertainty, prompting China
Zhuhai Air Show, including the H-20 stealth
to focus on self-reliance, boosting imports, and

32
 State of the World: Emerging Trends and Way Forward

internationalising the yuan. Fiscal measures partnerships aligned with its long-term economic
included increased quotas for local special bonds and security objectives.
and a “zero tolerance” policy on new hidden debts
to enhance financial stability. Another notable development was the 23rd meeting
of Special Representatives on the China-India
Implications for India Boundary Question held in Beijing. China’s
Wang Yi and India’s National Security Adviser,
The 21 October 2024 agreement on disengagement Shri Ajit Doval, reached a six-point consensus to
and patrolling between India and China has resolve the border dispute. They acknowledged
sparked cautious optimism. For India, a pragmatic progress in addressing border issues and reaffirmed
approach is essential to address the persistent their commitment to maintaining peace and
trade imbalance, which reached $85 billion in stability in the region. Both sides agreed that
2023. While reducing dependence on Chinese border management should align with broader
imports in critical sectors such as pharmaceuticals, bilateral relations, ensuring these disputes do not
electronics, and renewable energy is imperative, overshadow overall ties.
complete decoupling is unrealistic due to China’s
pivotal role in global supply chains. India must Prime Minister Modi and President Xi Jinping
strategically engage with China in areas like met during the 16th BRICS Summit in Russia,
energy transition technologies and global value emphasising their shared commitment to
chains while simultaneously prioritising domestic addressing global challenges. Both leaders stressed
manufacturing, particularly in semiconductor the importance of strengthening communication,
production, to reduce reliance on Chinese building mutual trust, and advancing developmental
imports. goals.

India also needs to enhance its strategic capacity Prognosis for 2025
in key sectors to remain globally competitive.
This includes fostering domestic champions in With Donald Trump returning to the White House,
defence, space, and electronics through targeted US-China competition is expected to intensify,
policy support and incentives. Investments in particularly as transatlantic tensions grow. China is
semiconductor manufacturing and local solar likely to leverage these divisions, seeking to align
equipment production are critical steps toward with Europe in building a coalition to counter US
reducing dependence on China. Concurrently, pressures.
India should deepen ties with global powers such
as the US, Japan, and the EU to diversify its supply China’s economic outlook for 2025 remains
chains and mitigate vulnerabilities. However, challenging, with low growth projections and
India’s strategic autonomy must remain a priority, concerns over deflation. Despite these difficulties,
balancing engagement with China against significant stimulus measures or major market

33
 State of the World: Emerging Trends and Way Forward

reforms are unlikely, as the government prioritises However, this surplus has exacerbated trade
stability, security, and resilience over fostering imbalances with emerging economies, as China
consumer-driven growth. The focus remains on exports more globally than it imports. US trade
managing domestic crises and external pressures, war tactics and tariffs are anticipated to further
particularly from the US. Any policy changes redirect trade flows without diminishing China’s
are expected to be incremental unless driven by manufacturing dominance. These imbalances
external shocks, such as heightened US tariffs or are becoming a global concern, with increasing
social unrest. exports routed through third countries to bypass
tariffs, complicating global trade dynamics.
In the global race for artificial intelligence
(AI), China is intensifying efforts to enhance Policy Recommendations
its technological capabilities, particularly in
The earlier strategy of minimising differences is no
semiconductors and AI software. Significant
longer effective. Instead, a more refined approach
investments are being made to boost computing
is required—one that enables peaceful coexistence
power, with a target of achieving 300 exaflops by
of differences while fostering cooperation on
2025. However, these efforts face challenges from
shared interests. This should include mechanisms
US restrictions on access to advanced technology,
for resolving the border dispute, addressing
straining China’s economy with increased energy
trade imbalances, and mitigating environmental
demands and limited access to critical tech
concerns, such as the impact of the Yarlung
components.
Tsangpo dam on India.

In 2025, social welfare, cohesion, and public

Economic collaboration is vital for long-term
security are expected to take precedence as China
stability. Despite existing trade imbalances,
addresses rising inequality and social unrest.
China’s role in India’s development remains
Reforms will focus on improving healthcare,
significant. Enhanced cooperation in areas like
education, and support for migrant workers,
green technology, digital transformation, and
alongside introducing new tax policies to fund
clean energy, coupled with joint investments and
welfare programs. Simultaneously, the government
technology transfers, could yield mutual benefits.
is likely to tighten societal control through expanded
surveillance, predictive policing, and political Active participation in multilateral frameworks
education, aiming to prevent unrest and maintain like BRICS and efforts to reform global institutions
stability. The Communist Party is expected to such as the UN are essential to adapt to the evolving
deepen its grassroots presence to resolve conflicts global order.
and reinforce social stability.
India needs a comprehensive long-term strategy
China’s trade surplus is projected to reach a to address the challenges posed by China. This
record high in 2025, driven by robust exports. includes maintaining credible deterrence and

34
 State of the World: Emerging Trends and Way Forward

enhancing military readiness, particularly in air support from allies to stabilise its economy.
defence and long-range strike capabilities. Key Trump’s re-election as US president has added
priorities include bolstering the defence ecosystem, uncertainty to the conflict’s outcome. While Trump
fostering technological innovation, and increasing has expressed a desire to end the war, the outgoing
defence spending. India should also evaluate Biden administration has complicated matters
the effectiveness of alliances like Quad and by authorising advanced military aid to Ukraine.
AUKUS while remaining alert to China’s regional In response, Russia has escalated its actions,
influence. Strengthening a joint military command including missile tests and lowering its nuclear
structure is critical for achieving better operational usage threshold, creating an unpredictable and
coordination. volatile situation.

Internal Security Challenges: Terrorist Attacks

Russia in Moscow In 2024, Moscow faced a series of
terrorist attacks, including a devastating bombing
Annual Review
on June 15, which exposed vulnerabilities in urban
security. The Russian government responded with
In 2024, Russia, under Putin’s leadership,
heightened security measures and investigations,
encountered significant external and internal
emphasising counterterrorism and community
challenges. Despite facing intense economic
engagement to restore public confidence. These
and geopolitical pressures, the country exhibited
incidents underscored the persistent threat of
resilience in navigating these obstacles. extremism and the need for robust national security
measures.
Putin’s Re-election In March 2024, Vladimir
Putin secured his fifth presidential term with an BRICS Kazan Summit: Strengthening
unprecedented 88 percent of the vote, continuing International Relations The BRICS Summit in
his dominance in Russian politics. However, Kazan provided Russia a platform to showcase its
criticisms surrounding the transparency of the international relevance despite Western sanctions.
electoral process and the suppression of opposition With participation from over 22 heads of state, the
candidates cast doubt on the legitimacy of his summit underscored BRICS as a counterbalance
victory. Following his inauguration in May to Western hegemony. Discussions focused on
2024, Putin’s leadership faces scrutiny over its economic cooperation, reducing dependency
implications for domestic policies and international on the US dollar, and exploring alternative trade
relations, particularly with Western nations. mechanisms. The establishment of a “BRICS
Partner Countries” category also highlighted the
Continued Conflict in Ukraine Russia’s military grouping’s growing influence. These outcomes
operations in Ukraine in 2024 have strained its align with Russia’s goals of fostering a multipolar
resources and escalated global concerns. Amid world order and diversifying its economic
intensified Western sanctions, Russia has sought partnerships.

35
 State of the World: Emerging Trends and Way Forward

Putin’s Regional Visits: Consolidating Ties In cooperation continues to be pivotal, with India
2024, Putin prioritised strengthening relations procuring advanced military equipment from
with neighbouring countries, including Azerbaijan, Russia. Energy partnerships have deepened
Mongolia, and Central Asian nations. through joint oil and gas projects, addressing
India’s increasing energy demands. Bilateral trade
• Azerbaijan: Discussions cantered on energy reached a record $66 billion in 2024, marking a
cooperation, particularly oil and gas exports, fivefold increase in five years, with a 9 percent rise
to navigate fluctuating global energy markets. in the year’s first eight months. Both nations are on
track to achieve a $100 billion trade target by 2030,
• Mongolia: Efforts focused on enhancing supported by efforts to diversify trade and increase
trade and investment, leveraging Mongolia’s investments.
strategic position between Russia and China.
Cultural and Technological Collaboration
• Central Asia: Countries like Kazakhstan Cultural exchanges, educational partnerships, and
and Uzbekistan remain critical for regional tourism have strengthened people-to-people ties,
security and trade. Putin’s visits aimed to fostering mutual understanding. Additionally,
reinforce Russia’s influence in these nations India and Russia have ventured into emerging
amid Western sanctions. technologies and cybersecurity, emphasising their
shared focus on innovation.
These diplomatic efforts signify Russia’s strategy
to maintain its regional dominance and economic Strategic Challenges However, the relationship
stability, countering the challenges posed by faces challenges. Russia’s closer ties with China
shifting global alliances. pose strategic concerns for India, while India’s
growing alignment with the West, especially the
India-Russia Relations in 2024: A Strategic US, adds complexity. Balancing these relationships
Partnership Amid Global Shifts India and Russia will remain critical for India’s foreign policy in
have maintained a strong partnership in 2024 2024 and beyond.
despite global power shifts and rising challenges.
This relationship holds strategic significance for Despite these challenges, the India-Russia
India as a counterbalance and source of diplomatic partnership continues to thrive, adapting to the
support in a geopolitical climate shaped by China’s changing global order.
growing influence and renewed tensions between
global powers. Prognosis for 2025

Economic Cooperation India and Russia’s Russia’s future hinges on its ability to balance
economic ties remain robust, with collaborations competing interests, address challenges, and adapt
across defence, energy, and technology. Defence to global changes. Key considerations include:

36
 State of the World: Emerging Trends and Way Forward

• Ending the Ukraine Conflict: Resolving the Joint Ventures Collaborate in science, IT, green
war would alleviate economic and diplomatic energy, and pharmaceuticals.
pressures.
Defence Cooperation Strengthen joint exercises,
• Reducing Western Reliance: Establishing
defence production, and technology transfers.
alternative financial ties is vital for Russia’s
long-term resilience.
Cybersecurity Develop joint research and
• Growing Dependency on China: Challenges technologies in cybersecurity.
are likely to deepen Russia’s reliance on
China. Energy Collaboration Diversify energy sources,
including Russian LNG and nuclear energy.
• India-Russia Relations: India’s deepening
engagement with the West and Russia’s
Rare Earth Minerals Jointly develop critical
balancing act between India and China will
minerals for advanced technologies.
shape future ties.

• Global Standing: Russia’s participation People-to-People Ties Promote student exchanges,

in international institutions and fostering scholarships, and research collaborations.
a multipolar world order will influence its
global position. Think Tank Outreach Expand dialogue at Track
1.5 and Track 2 levels.
• Prospects for Stability: In the medium term
(2024–2025), Russia will face ongoing issues
in Ukraine and economic pressures. Long- Multilateral Governance
term stability (2025–2030) will depend on
diversifying its economy and maintaining Annual Review
balanced relations.
2024: Challenges and Imperatives for
Policy Recommendations
Global Governance
Diversify Trade Expand trade beyond defence and
The year underscored the critical need for
energy.
effective global governance amid multipolarity,
Infrastructure Investment India can invest geopolitical fragmentation, and transnational
in Russian infrastructure projects, including challenges. Debates in the United Nations
transportation and industrial parks. General Assembly (UNGA) and Security
Council (UNSC) highlighted the complexities
Arctic and Connectivity Projects Expedite of international relations. Economic disruptions
investments and initiatives in the Arctic and persisted, driven by climate change, conflicts,
connectivity projects. cyber risks, and the rise of Artificial Intelligence

37
 State of the World: Emerging Trends and Way Forward

(AI). The World Trade Organisation (WTO) and on e-commerce and data sovereignty. Contentious
the International Monetary Fund (IMF) contended issues like agricultural subsidies and fisheries
with global economic uncertainties, while the management persisted, with developing nations
United Nations Human Rights Council (UNHRC) seeking concessions. Director-General Ngozi
addressed pressing crises. Discussions on nuclear Okonjo-Iweala’s call for unity underscored the
disarmament gained urgency amid escalating WTO’s fragile state. The institution’s future faced
conflicts and advancements in military technology. additional pressure with the second term of Donald
Trump, who had previously threatened to withdraw
UNGA` The 79th UNGA session, themed from the WTO.
“Leaving no one behind: Acting together for the
advancement of peace, sustainable development, IMF On its 80th anniversary, the IMF addressed
and human dignity,” revealed growing global inflation, debt, and crises triggered by the Russia-
divides. Dominated by the Russia-Ukraine Ukraine war. A landmark decision to increase
conflict, resolutions calling for de-escalation Special Drawing Rights (SDR) allocations
failed to achieve consensus due to polarisation. provided relief to low-income countries. Efforts to
The Global South’s demand for equitable climate reform debt restructuring frameworks for nations
finance took centre stage, emphasising reparative like Sri Lanka and Zambia marked progress but
justice and sustainable development. India’s highlighted limitations in countering China’s debt
G20 presidency amplified calls for reforming diplomacy. The IMF’s role in stabilising global
multilateral institutions, reflecting demands for a markets remained central amid ongoing challenges.
more inclusive UN system.
UNHRC The UNHRC’s agenda reflected the
UNSC The UNSC faced criticism for its inability growing complexity of global human rights
to address crises in Gaza, Ukraine, and Sudan, issues, focusing on alleged war crimes in Gaza,
while the veto power of permanent members Ukraine, and Ethiopia. The Universal Periodic
fuelled frustration among non-members. Despite Review process emphasised state accountability,
structural reform debates and informal discussions particularly regarding press freedom and displaced
about adding members like India and Brazil, no populations. Several African countries joined the
formal resolutions emerged. The UNSC authorised Council, but Saudi Arabia’s bid was rejected due
critical peacekeeping missions in West Africa, to its human rights record, including oppression of
Mali, and the Sahel, where transnational terrorism civil society and women human rights defenders.
threatened stability.
Nuclear and Global Disarmament Global nuclear
WTO` The WTO’s 13 ministerial conference
th
disarmament remained a UN priority as tensions in
addressed supply chain disruptions and trade East and South Asia escalated. The Treaty on the
barriers. While the forecast for global trade growth Prohibition of nuclear weapons (TPNW) gained
in 2024 was revised to 2.7 percent, incremental ratifications, but nuclear-armed states resisted its
progress was made on digital trade norms, focusing provisions. The Non-Proliferation Treaty (NPT)

38
 State of the World: Emerging Trends and Way Forward

framework was hindered by disagreements among energy goals, including achieving 500GW capacity
major powers, while North Korea’s nuclear by 2030. Additionally, India’s peacekeeping
programme and Iran’s ambitions remained pressing contributions in Africa bolstered its image as an
concerns. Advancements in hypersonic and AI- emerging global leader.
powered weapons raised calls for international
regulation of emerging technologies. In the economic sphere, the IMF’s new debt
restructuring framework and expanded SDR
Multilateral Institutions BRICS expanded its allocations strengthened India’s position in global
influence by admitting Egypt, Ethiopia, Iran, and financial diplomacy. WTO discussions on supply
the UAE, enhancing its role in countering Western- chain disruptions further highlighted India’s
led institutions and promoting Global South potential as an alternative manufacturing hub,
cooperation. Key initiatives included strengthening complementing initiatives like Make in India and
the New Development Bank and advocating Atmanirbhar Bharat.
for equitable governance. ASEAN bolstered its
regional security and economic role through the India maintained a balanced stance at the
RCEP, while the ASEAN-India Summit focused UNHRC, navigating its non-alignment policy
on connectivity and resilience. The Shanghai amid investigations into conflicts in Gaza and
Cooperation Organisation (SCO) deepened Ukraine. The lack of consensus among major
cooperation on counterterrorism, energy security, powers under the NPT increased India’s leverage
and stability, with India balancing collaboration to promote a pragmatic approach to nuclear
between China and Russia. disarmament. Escalating tensions in East and
South Asia underscored India’s need to deepen
Implications for India strategic partnerships with the US, EU, and QUAD
members.
The global events of 2024 significantly shaped
India’s foreign policy, economic strategies, and India’s leadership in BRICS, SCO, ASEAN,
security priorities. India’s proactive engagement BIMSTEC, and the G20 showcased its commitment
in multilateral institutions reinforced its role as a to reforming global governance and enhancing its
key player in global governance and amplified its regional and global influence. By strengthening
advocacy for structural reforms, particularly for a regional connectivity and reinforcing its Act East
permanent UNSC seat. As part of the G20 troika policy, India cemented its stature as a prominent
since 2022, India emerged as a prominent voice for actor in both the Global South and the broader
the Global South. international system.

India’s leadership in the International Solar Alliance Prognosis for 2025

(ISA) and its emphasis on equitable climate action
aligned with UNGA debates on climate finance. The year 2025 is set to bring continued shifts in
These efforts complemented India’s renewable global governance, with India playing a crucial

39
 State of the World: Emerging Trends and Way Forward

role. Its focus on multilateral reforms, economic indigenous capabilities while supporting global
growth, regional stability, and technological self- frameworks. Through its leadership in multilateral
reliance will guide its international engagements. forums and strategic initiatives, India is poised to
shape global governance in 2025.
At the UNGA, India is likely to lead calls for
equitable reforms, especially as Global South Policy Recommendations
nations push for better representation. Climate
change and sustainable development will remain The governance landscape in 2024 showcased
key themes, with India advocating for reparative both the resilience and challenges of multilateral
climate finance and technology transfer. India’s institutions. While incremental progress was
bid for a UNSC permanent seat is expected to achieved, divisions often hindered meaningful
gain traction, supported by Global South nations action, underscoring the need for strengthened
frustrated by the Council’s inability to resolve multilateral engagements, including UNSC
conflicts. Regionally, India will focus on stability reforms and equitable climate finance mechanisms.
in South and West Asia, promoting peaceful
resolutions while leveraging its growing strategic As the Asia century rises, India must bolster
influence. collaboration within BRICS and other South-South
forums to counterbalance Western economies and
The WTO is expected to face critical negotiations on promote alternative financial mechanisms. With the
digital trade, intellectual property, and agricultural WTO’s current challenges, India should prioritise
subsidies. With global conflicts impacting energy strategic Free Trade Agreements (FTAs) with the
and food security, India could champion the EU, UK, and Indo-Pacific nations to boost exports,
interests of developing nations. Amid concerns over attract investments, and expand market access.
a potential U.S. withdrawal from the WTO under Promoting innovative financing tools like green
Trump’s protectionist policies, India may emerge bonds will also ensure sustainable development.
as a stabilising force in diversifying trade networks
and addressing global supply chain challenges. India should adopt a balanced approach to nuclear
disarmament by engaging in global forums and
In the IMF, India’s collaboration with BRICS nations strengthening regional stability in the Indo-Pacific
could drive alternative financial mechanisms, through partnerships with QUAD, ASEAN, and
helping to address global debt restructuring and BIMSTEC to counter China’s assertiveness.
financial instability. A developmental focus on human rights that
emphasises socio-economic progress and climate
The UNHRC is likely to prioritise human rights adaptation is equally essential.
in ongoing conflicts, while nuclear disarmament
and military technology regulations will remain Expanding soft power diplomacy through initiatives
contentious. India is expected to enhance like International Yoga Day, cultural exchanges,

40
 State of the World: Emerging Trends and Way Forward

and educational collaborations can further enhance Amid challenges facing multilateral institutions
India’s global influence. and global governance, there is a pressing need
to strengthen engagement and implement reforms
As geopolitical and transnational challenges to improve inclusivity and accountability. As the
intensify, reimagining global governance to Asian century unfolds, India should assume a
enhance inclusivity, equity, and accountability is leadership role in the Global South and enhance
more urgent than ever. India’s proactive diplomacy regional cooperation to position itself as a global
and balanced approach position it as a pivotal actor power.
in navigating a fragmented global order.

41
 State of the World: Emerging Trends and Way Forward

Neighbourhood

Afghanistan Regional Diplomatic Relations In 2024,

Afghanistan’s ties with neighbouring countries,
Annual Review especially China and Central Asia, have improved,
with new trade and infrastructure projects.
In 2024, India’s neighbourhood policy encountered However, relations with Iran and Pakistan are
obstacles including unresolved border disputes, strained over issues like refugees and water
regional rivalries, and geopolitical tensions. disputes. India continues humanitarian engagement
While efforts towards economic cooperation and without formal recognition.
connectivity continued, security concerns hindered
India’s regional diplomacy and efforts to achieve Regional Diplomacy and Trade The Taliban has
stability. made significant strides in regional diplomacy,
particularly with Central Asia. Key projects
Afghanistan’s Diplomatic Struggles and include the Trans-Afghanistan Railway and
Engagement Since the Taliban’s return to power energy initiatives, which have increased trade and
in 2021, Afghanistan has grappled with balancing cooperation with countries like Uzbekistan and
isolationism and diplomatic engagement. While the Kazakhstan.
regime has pursued selective engagement, focusing
on bilateral cooperation, internal issues like India’s Strategic Engagement India has
women’s rights and the formation of an inclusive strategically engaged with the Taliban, balancing
government have complicated these efforts. security concerns with diplomatic efforts. Notably,
India participated in a Regional Cooperation
Taliban’s Persistence in Power By August 2024, Initiative and appointed a Taliban consul in
the Taliban marked its third year in power with Mumbai, focusing on protecting its interests in
a symbolic military parade. Despite predictions Afghanistan.
of collapse, the regime has maintained control,
although it remains unrecognised internationally Humanitarian Crisis in Afghanistan Afghanistan
and lacks formal political opposition. faces a severe humanitarian crisis, with over

42
 State of the World: Emerging Trends and Way Forward

23 million people in urgent need of aid. The Implications for India

Taliban’s inability to provide basic services has
worsened conditions, exacerbated by economic India’s Strategic Engagement with the Taliban
collapse, displacement, and climate-related The Taliban’s return to power in Afghanistan has
disasters. significant implications for India’s security and
regional influence. While refraining from formal
UN Efforts to Address Humanitarian Needs The recognition, India has engaged with the regime
UN has hosted meetings to address Afghanistan’s through humanitarian aid, diplomacy, and regional
humanitarian crisis, with mixed results. While the initiatives. India’s participation in the Taliban’s
Taliban participated in some discussions, their
Regional Cooperation Initiatives aims to maintain
demands for formal recognition and exclusion of
influence in Afghanistan, countering the growing
civil society members hindered progress.
presence of China, Russia, and Pakistan. India
has also appointed a consular representative to
Afghanistan’s Fragile Economic Recovery
safeguard its Afghan diaspora and protect its
Afghanistan’s economy has seen modest growth
interests.
since the Taliban took power, but it remains
fragile. The recovery is slow, driven by private
Humanitarian Crisis and Diplomatic Challenges
consumption, and significant structural issues
The humanitarian crisis in Afghanistan is a major
persist. Key priorities include boosting women’s
challenge for India’s foreign policy. With millions
economic participation and enhancing domestic
in dire conditions, India may face pressure from
resource mobilisation.
potential refugee flows, complicating relations with
Trade Imbalances and Economic Vulnerabilities neighbouring countries. Additionally, the Taliban’s
Afghanistan’s trade deficit has widened due to a policies on women’s rights and inclusivity draw
surge in imports, driven by demand for essential international criticism, and India must navigate
goods and the recovery of domestic industrial these issues carefully to avoid being linked to the
activity. This growing imbalance highlights the regime’s repressive practices.
country’s dependency on external goods, posing
risks to long-term stability. Economic and Security Concerns Afghanistan’s
instability, trade imbalances, and reliance on
Rising Economic Vulnerabilities and Inequalities foreign aid pose risks to India’s long-term regional
Afghanistan’s economic challenges, exacerbated strategy. India must support Afghanistan’s recovery
by the ongoing humanitarian crisis, have increased while avoiding actions that could heighten regional
vulnerabilities. The UN’s 2023 assessment shows tensions, particularly with rivals like Pakistan.
widespread hardship, especially among female- Ensuring long-term stability in Afghanistan
headed households and rural communities, with is crucial for India’s regional influence and
education and basic services severely affected. security.

43
 State of the World: Emerging Trends and Way Forward

Prognosis for 2025 situation in 2025 remains uncertain, with ongoing

challenges in governance, economic recovery, and
In 2025, the Taliban regime is expected to humanitarian stability.
continue its balancing act between isolation
and selective international engagement. While
Policy Recommendations
its diplomatic efforts, particularly with Central
Asian nations and China, have increased, global
Expanding Humanitarian Aid to Afghanistan To
recognition remains out of reach. Internal issues,
address Afghanistan’s severe humanitarian crisis,
particularly regarding women’s rights and the lack
international actors must prioritise expanding
of an inclusive government, will likely hinder
aid for food, medical supplies, clean water, and
full recognition, limiting international support.
essential infrastructure. Long-term solutions should
However, development projects such as the Trans-
focus on rebuilding healthcare and education
Afghanistan Railway and infrastructure agreements
systems, especially for women and children, with a
with Central Asia could provide some economic
particular emphasis on girls’ education.
relief, though challenges like fiscal instability,
trade deficits, and reliance on foreign aid will
persist. Pressuring the Taliban for Inclusive Governance
Sustained international pressure is needed to
The humanitarian crisis in Afghanistan is set encourage the Taliban to form an inclusive
to remain dire, with millions enduring severe government. This should involve engaging civil
conditions. Despite international aid, the Taliban’s society groups and ensuring the representation of
failure to deliver essential services or address all ethnic and political factions, including women.
deep economic vulnerabilities will continue to Economic aid should be conditional on reforms
exacerbate the suffering. While trade agreements that promote transparency and women’s workforce
and infrastructure projects may offer temporary participation.
relief, long-term growth will depend on addressing
structural issues like human capital development, Regional Cooperation and Advocacy for
gender inequality, and access to education. Women’s Rights Regional cooperation,
particularly with India, is essential to combat
Regionally, tensions with Iran and Pakistan, terrorism and maintain stability in Afghanistan.
especially over refugees and water resources, are The international community should also advocate
likely to escalate, complicating Afghanistan’s for women’s rights, integrating gender equality
foreign relations. India’s cautious engagement into all forms of assistance. While non-recognition
with the Taliban will likely continue, focusing on remains, formal recognition of the Taliban could
maintaining diplomatic channels and protecting be considered if they meet key criteria, such as
its interests, including humanitarian aid and inclusive governance, human rights protections,
regional cooperation. In summary, Afghanistan’s and efforts towards peacebuilding.

44
 State of the World: Emerging Trends and Way Forward

Bangladesh However, the transition period has been fraught

with challenges, including reports of violence
against religious minorities and political vendettas
Annual Review
targeting Awami League members. Legal cases
against Hasina and her party leaders have raised
Political Turmoil and Sheikh Hasina’s Ouster
concerns about political retribution.
The year was marked by significant political
upheaval in Bangladesh. Sheikh Hasina, the
Rising Communal Tensions and Security
longest-serving Prime Minister, secured her fourth
Concerns The political transition has also sparked
consecutive term after a contentious general
fears of growing communal tensions. Incidents of
election. Allegations of voter suppression, fraud,
violence against minorities, particularly Hindus,
and political repression deepened divisions
have intensified, with over 2,200 cases reported
between her Awami League (AL) and opposition
by December. Additionally, the resurgence of
parties, raising concerns about the country’s
extremist groups and calls for an Islamic caliphate
democratic future. By mid-2024, dissatisfaction
underscore the security void left in the wake of
over economic struggles, rising unemployment,
Hasina’s removal.
and inflation culminated in nationwide protests. A
controversial court ruling reinstating civil service
Economic Challenges Bangladesh’s economy
job quotas further fuelled unrest, leading to mass
faced significant hurdles in 2024, compounded by
demonstrations demanding Hasina’s resignation.
political instability. The country secured a $4.7
The protests, initially student-led, expanded to a billion IMF loan to stabilise foreign reserves, which
nationwide movement, supported by opposition had been dwindling. Real GDP growth moderated
parties and civil society groups. Clashes with to 5.2 percent in FY24, with projections of further
security forces resulted in casualties, and the deceleration in FY25 due to subdued investment
military eventually brokered a deal to form an and industrial activity. Inflation climbed to 10.87
interim government. On August 5, Hasina was percent by October, while foreign exchange
ousted, marking the end of her two-decade rule. reserves showed a modest recovery, reaching $25.5
billion.
Interim Government and Dr. Yunus’ Role The
interim government, led by Nobel laureate Dr. Shifts in Foreign Policy Under the interim
Muhammad Yunus, assumed power on August administration, Bangladesh’s foreign policy has
8, tasked with restoring stability and guiding undergone notable shifts. Relations with the
the country toward free and fair elections. This United States have improved, with Yunus meeting
administration pledged reforms, including judicial President Biden in September, marking a significant
independence, anti-corruption measures, and milestone in US-Bangladesh ties. Cooperation
the establishment of an independent electoral with China, Bangladesh’s largest trading partner,
commission. has also been strengthened.

45
 State of the World: Emerging Trends and Way Forward

However, relations with India have cooled, as Foreign Secretary, divergent positions persist.
Dhaka appears to be aligning more closely with Additionally, the potential extradition of Sheikh
Pakistan. Recent discussions between Yunus and Hasina could become a contentious issue.
Pakistan’s Prime Minister emphasised reviving
SAARC and exploring strategic partnerships, India now faces the dual challenge of losing a
signalling a potential shift in regional dynamics. trusted ally in Hasina while needing to adapt to a
new interim government asserting its independence.
Uncertain Path Forward Despite pledges for Navigating this evolving landscape will require
reform, the lack of a unified political vision and a strategic adjustments to maintain stability and
clear timeline for elections has created uncertainty. rebuild ties.
The interim government faces mounting pressure
to address public grievances, ensure minority Prognosis for 2025
protection, and manage the resurgence of extremist
activities. How Bangladesh navigates this volatile The year 2025 marks a critical phase for Bangladesh
period will significantly impact its democratic as it grapples with the aftermath of Sheikh Hasina’s
trajectory and regional stability. dramatic overthrow. The interim government, led
by Muhammad Yunus, faces immense challenges
Implications for India in steering the nation through political instability
and economic uncertainty.
The removal of Sheikh Hasina’s government
has disrupted the decade-long balance in India- Political and Social Challenges The interim
Bangladesh relations, creating a challenging administration has pledged reforms and free
new dynamic. The political transition on August elections but faces scepticism over its capacity to
5, coupled with events like the arrest of former enact meaningful change. Deep-seated political
ISKCON leader Chinmoy Roy and attacks on polarisation and vendettas against the Awami
diplomatic properties, has strained bilateral ties. League complicate efforts to foster national
Anti-India rhetoric from interim administration unity. Meanwhile, ethnic and religious violence,
figures and incidents of violence against particularly targeting Hindu minorities, threatens
Bangladeshi Hindus and temples have further to further destabilise the social fabric. Rising
tested the societal and diplomatic relationship extremism and religious violence add to the
between the two nations. security risks, testing the government’s ability to
maintain law and order and uphold Bangladesh’s
Unresolved issues, such as border killings, secular identity.
the Teesta water-sharing dispute, and trade
imbalances, continue to fuel anti-India sentiments Security Concerns The power vacuum left
in Bangladesh. Despite efforts to address these by Hasina’s removal has heightened security
challenges, including a recent visit by India’s risks, including the rise of extremist sentiments

46
 State of the World: Emerging Trends and Way Forward

and potential terrorist activities. The interim should bolster economic cooperation through trade,
government must prioritise security measures to investment, and infrastructure support. Prioritising
prevent escalation and ensure national stability. issues like trade imbalances and the Teesta water-
sharing dispute will solidify bilateral ties and
Economic Outlook Economically, 2025 presents promote mutual economic benefits.
a cautious outlook for Bangladesh, with growth
expected to decelerate further. High inflation, a Address Security and Religious Tensions India
substantial fiscal deficit, and political instability must advocate for the safety of religious and ethnic
continue to undermine investor confidence and minorities in Bangladesh, particularly amidst rising
long-term economic planning. Economic reforms violence. Leveraging regional and international
and foreign aid will be vital to stabilising finances platforms, India can foster social harmony and
and ensuring sustainable development. ensure minority rights are protected.

The Path Ahead As Bangladesh navigates this

Adapt to Bangladesh’s Evolving Foreign Policy
transitional period, political instability, economic
With Bangladesh’s foreign policy tilting towards
challenges, and social unrest are likely to dominate
Pakistan, India should focus on maintaining robust
the landscape. While initial efforts by the interim
ties with Dhaka. Diplomatic initiatives to rebuild
government may stabilise the country, achieving
trust and cooperation will be vital to counterbalance
lasting reforms remains uncertain. The international
any drift in relations.
community, including India, will closely monitor
Bangladesh’s progress, with the key question being
Promote Regional Cooperation Supporting the
whether it can transition to a stable, democratic
revival of regional organisations like SAARC
future or remain caught in cycles of turbulence and
can provide India a platform to enhance dialogue,
stagnation.
counter extremism, and resolve shared issues such
as border management and trade. This reinforces
Policy Recommendations
India’s role as a regional leader.
Engage Diplomatically with the Interim
Government India should proactively engage Monitor Extremist Threats and Border
with Muhammad Yunus’s interim government, Security India must closely monitor extremist
acknowledging the fluid political environment. activities arising from Bangladesh’s instability.
Constructive dialogues across the political Strengthening border security and addressing
spectrum can help India support democratic cross-border terrorism are critical to safeguarding
reforms and stability, ensuring its influence during India’s national security.
Bangladesh’s political transition.
Address Anti-India Sentiment To counter rising
Strengthen Economic and Trade Relations anti-India rhetoric, India should employ diplomatic
Amid Bangladesh’s economic challenges, India outreach, economic partnerships, and soft-power

47
 State of the World: Emerging Trends and Way Forward

initiatives. Strengthening cultural and people- in industrial output, leading to an elevated current
to-people ties will maintain public goodwill and account deficit. Addressing youth unemployment
stabilise long-term relations. and fostering private sector growth will be key
priorities for the new administration.
Manage the Extradition Issue India should handle
the sensitive issue of Sheikh Hasina’s potential Civil Service Reforms The Royal Civil Service
extradition with caution. Proactive diplomacy will Commission (RCSC) faced rising attrition rates
be key to navigating this challenge while preserving among civil servants, primarily due to voluntary
balanced relations with the interim government. resignations linked to a rigid work environment. In
response, the RCSC is modernising its approach to
By implementing these measures, India can cultivate a supportive work culture. Plans include
safeguard its strategic interests, strengthen regional implementing flexible work models, enhancing
stability, and support Bangladesh’s transition cognitive skills, and prioritising leadership
towards a democratic and secure future. development to foster a culture of collaboration
and innovation.
Bhutan
Foreign Policy Dynamics Bhutan’s foreign
Annual Review policy aims to balance strategic imperatives with
its commitment to sovereignty and sustainable
Political Landscape and Governance Bhutan, development. Relations with India remain central,
known for its emphasis on Gross National Happiness with PM Tobgay visiting India four times in
(GNH), transitioned to a constitutional monarchy 2024 and inaugurating the first Integrated Check
in 2008. Despite some challenges, the kingdom has Post along the India-Bhutan border. Ongoing
maintained political stability. In 2024, the People’s cooperation on hydropower projects reflects
Democratic Party (PDP), led by Tshering Tobgay, Bhutan’s expertise in clean energy. However, trade
dominated the general elections, securing over deficits and limited export diversification are key
60 percent of the National Assembly seats. Their concerns in bilateral discussions.
campaign focused on addressing economic issues
such as poverty and disparity, while the emergence Simultaneously, Bhutan engaged with China
of the Bhutan Tendrel Party indicated a shift to address unresolved border disputes with the
towards alternative political voices. 14th Expert Group Meeting on the China-Bhutan
Boundary issues being conducted in August 2024.
Economic Challenges The new government faces While progress in formal negotiations reflected
significant economic challenges, including rising Bhutan’s commitment to peaceful resolution, the
unemployment and a need to diversify an economy complex geopolitical dynamics between India and
heavily reliant on hydropower exports. The China posed challenges. Bhutan sought to maintain
economy decelerated in 2023 due to a contraction neutrality, balancing its reliance on India for

48
 State of the World: Emerging Trends and Way Forward

security with its interest in developing diplomatic percent of Bhutan’s external debt denominated
and economic ties with China. in Indian rupees. Additionally, India remains the
largest source of foreign direct investment (FDI)
Climate Diplomacy and Global Engagement in Bhutan.
Bhutan actively enhances its climate diplomacy,
advocating for global environmental sustainability Political Stability and Governance The 2024
as a carbon-negative country. The kingdom’s general elections, resulting in the People’s
impending graduation from least-developed Democratic Party (PDP) taking power, signal
country (LDC) status in 2023 influences its political stability in Bhutan. This continuity is
international outreach, focusing on partnerships beneficial for India, as it helps maintain bilateral
with multilateral organisations for economic agreements and reduces the risk of political unrest
stability post-graduation. in the region. However, PDP’s focus on addressing
economic inequalities may impact Bhutan’s
Additionally, Bhutan seeks to diversify its economic engagement with India on regional initiatives.
portfolio by exploring regional partnerships beyond
South Asia, emphasising sustainable tourism and Hydropower and Economic Support Hydropower
cultural exchange, and deepening ties with ASEAN is a cornerstone of Bhutan’s economy and its
countries. Despite its limited diplomatic footprint, bilateral ties with India. Given Bhutan’s limited
Bhutan’s strategic positioning and environmental economic diversification and rising unemployment,
credentials bolster its role as a proactive participant India’s support in these areas will be crucial.
in global affairs. Bhutan’s dwindling foreign exchange reserves
highlight the need for robust trade facilitation
Implications for India and financial assistance, which India can provide
through soft loans and grants.
Bilateral Relations Overview India and Bhutan
enjoy a strong bilateral relationship founded on Strategic Considerations Bhutan’s engagement
mutual trust and understanding, formalised with with China on border disputes poses strategic
the establishment of diplomatic relations in 1968 implications for India. While maintaining
and underpinned by the Treaty of Friendship and neutrality, progress in Sino-Bhutanese negotiations
Cooperation, renewed in 2007. could indirectly affect India, particularly around
the strategically sensitive Doklam area. To ensure
Economic Interdependence In 2024, Bhutan’s regional stability, India should deepen security
domestic and foreign policy developments have cooperation with Bhutan, including joint military
significant implications for India, which is Bhutan’s training and enhanced border surveillance.
largest development partner and primary trade
ally. India accounts for 86 percent of Bhutan’s Navigating Foreign Policy Bhutan’s balancing
exports and 73 percent of its imports, with 68 act of relying on India for security while exploring

49
 State of the World: Emerging Trends and Way Forward

economic ties with China necessitates a nuanced ongoing initiatives and exploring new investment
approach from India. Strengthening Bhutan’s opportunities. Supporting Bhutan’s energy export
trust in India’s commitment to its sovereignty and strategy will benefit its economy and deepen
development is essential for counterbalancing interdependence. Additionally, encouraging
Chinese influence. private sector investments in sectors like tourism,
agriculture, and technology will foster job creation
Regional Integration and Climate Diplomacy and reduce Bhutan’s economic vulnerabilities. With
Bhutan’s graduation from least-developed Bhutan’s graduation from the Least Developed
country status and efforts to diversify partnerships Countries (LDC) list, India should extend financial
align with India’s Act East Policy. Supporting aid, soft loans, and trade concessions to ensure
Bhutan’s regional integration can enhance Bhutan’s economic resilience.
economic cooperation. Additionally, Bhutan’s
active participation in climate diplomacy offers Strengthening Security and Strategic
collaboration opportunities for India, reinforcing Engagement India should strengthen Bhutan’s
shared environmental goals. trust in India’s security commitments through
high-level diplomatic engagements and transparent
Prognosis for 2025 dialogue. This will counter any influence from
China’s overtures. India can also leverage
Bhutan will look to intensify regional partnerships, multilateral platforms like BIMSTEC to improve
particularly with ASEAN nations, emphasising Bhutan’s access to the Bay of Bengal and India’s
cultural exchange, sustainable tourism, and consumer market.
trade. With limited diplomatic representation,
Bhutan will leverage multilateral platforms to Enhancing Development Partnership India
amplify its voice, balancing domestic needs with should collaborate with Bhutan on skill-
global responsibilities. In 2025, Bhutan’s foreign development programmes tailored to its workforce
policy will reflect strategic pragmatism, ensuring needs, addressing the rising youth unemployment.
resilience amid shifting regional dynamics. Educational exchange programmes, internships,
and professional training initiatives should be
Policy Recommendations prioritised. Additionally, India can assist in
Bhutan’s infrastructure projects, particularly in
Strengthening Economic Collaboration India’s building cities like GMC, to improve internal and
enduring partnership with Bhutan remains cross-border connectivity.
central to India’s Neighbourhood First strategy.
To enhance this relationship, there is a need Leveraging Climate and Renewable Energy
to bolster economic collaboration. Bhutan’s Bhutan’s carbon-negative status aligns with India’s
reliance on hydropower, along with India’s role renewable energy and sustainable development
in co-developing projects, calls for expediting goals. India’s expertise in solar energy and Bhutan’s

50
 State of the World: Emerging Trends and Way Forward

hydropower resources present opportunities for The Maldives’ economy remains heavily dependent
synergistic development, benefiting both nations. on tourism and tuna exports. While tourist arrivals
surged past 2 million for the first time, reduced per
Navigating Evolving Challenges India must capita tourist spending limited economic gains.
proactively engage with Bhutan’s evolving On the export front, Maldives Customs Services
political, economic, and foreign policy landscape, reported a 58 percent decline in exports in June
leveraging mutual interests to strengthen bilateral 2024 compared to the same period in 2023.
ties and navigate emerging challenges. A balanced
and strategic approach will ensure continued Transparency and Governance Domestically,
partnership and stability in the region. political debates centred on governance
transparency and allegations of corruption,
particularly in health and social programmes.
Maldives These issues remain critical to public discourse.

Annual Review Foreign Policy Amid internal challenges, the

Maldives leveraged its strategic location to
strengthen international ties. President Muizzu’s
Political Developments In 2024, the Maldives
October visit to India resulted in agreements to
experienced significant political and foreign policy
facilitate local currency transactions, bolster trade,
developments against a backdrop of domestic
and enhance financial stability, underscoring
challenges. President Dr. Mohammed Muizzu
robust bilateral ties. Earlier in January, President
consolidated power during the fourth parliamentary
Muizzu visited China, focusing on tourism and
elections, with his People’s National Congress
infrastructure investment, maintaining a balanced
(PNC) achieving a landslide victory in April. This
stance in India-China geopolitical contests.
dominance marked a turning point in the country’s
Relations with West Asian nations and Türkiye
governance.
also deepened, with defence ties highlighted by the
Maldives’ purchase of Bayraktar TB2 drones for
Economic Distress Despite political gains, the
patrolling purposes.
Maldives faced severe economic challenges. The
total debt-to-GDP ratio surged to 114.6 percent in Implications for India
2024, up from 97.7 percent in 2023, reflecting rising
financial constraints. Inflationary pressures and Overview of India-Maldives Relations India
public dissatisfaction over government spending and the Maldives share deep-rooted historical ties
compounded these concerns. Real GDP growth across ethnic, linguistic, cultural, religious, and
dropped from 8.7 percent in 2023 to 5.5 percent in commercial spheres. These connections, cultivated
2024. Official reserve assets also hit an eight-year over centuries, have formed a multifaceted
low, standing at $ 371 million in September 2024, relationship. India has long held a preeminent
a 19 percent decline from August. position in the Maldives, with cooperation spanning

51
 State of the World: Emerging Trends and Way Forward

trade, security, and regional stability. By 2023, location, balancing relations between India and
India emerged as the largest trade partner to the China while diversifying partnerships with West
Maldives, with total trade nearing $550 million. As Asia and Türkiye. India must anticipate increased
of July 2024, India was the second-largest exporter involvement from global powers as the Maldives
to the Maldives, with exports nearing $50 million, expands its bilateral ties beyond the regional
reflecting a 10 percent increase compared to the sphere.
previous year.
Prognosis for 2025
Recent Challenges in Bilateral Relations The
strong bilateral relations faced headwinds when
Fiscal Challenges and Economic Adjustments
President Muizzu assumed office, following his
Maldives, facing ongoing fiscal constraints in
extensive ‘India-out’ campaign. This campaign
2024, aims to stabilise its economy in 2025. Rising
questioned the presence of Indian military
expenditures, high imports, falling exports, and
personnel providing humanitarian aid, leading to
dwindling non-tax revenue have raised investor
a dip in diplomatic ties. However, relations were
concerns about potential debt defaults. Experts
soon restored through a diplomatic solution: Indian
caution that without foreign assistance, the
military personnel were replaced with 76 Indian
economic outlook may worsen. To avoid financial
technical and civilian staff to maintain aviation
trenches from the World Bank, the Maldives may
platforms. This resolution, followed by high-level
seek support from regional neighbours.
visits, reinforced the bilateral partnership based on
mutual interests and sensitivities.
The government plans tighter spending
Economic Concerns and Tourism Dynamics management, focusing on economic growth and
Maldives faces economic distress, marked by fiscal social welfare. Restoring debt sustainability is
challenges and vulnerability in the geopolitical the top priority. The latest budget incorporates
space. Restoration of ties with India is speculated new revenue measures, such as increased tourism
to be influenced by the Maldives’ hesitation to and airport taxes, and initiatives to stabilise
approach IMF assistance. Tourism, a key economic the national dollar supply. Efforts to diversify
driver, saw a decline in Indian tourist arrivals, revenue sources beyond tourism are underway,
impacting revenue. Despite overall tourist growth, though tourism remains the primary driver of the
reduced spending per tourist has limited economic economy. Policies will likely promote high-value,
benefits. Efforts like roadshows by the Maldives eco-friendly tourism and expand digital marketing.
Association of Travel Agents and Tour Operators Support for SMEs in the tourism supply chain aims
(MATATO) in India aim to revive Indian tourist to foster a more inclusive economic structure.
footfall and bolster revenues.
Rising tourist footfall will increase imports of
Geopolitical Considerations The Maldives capital goods, food, and fuel, further widening
continues to leverage its strategic geographic the current account deficit. Major fiscal and

52
 State of the World: Emerging Trends and Way Forward

policy adjustments will focus on restoring debt Policy Recommendations

sustainability and ensuring macroeconomic
stability to prevent economic shocks. Investments Maintain Recovery in Relations India-Maldives
in renewable energy projects, such as solar and wind relations are rebounding after a brief setback, with
power, and initiatives like the “Blue Economy” India poised to aid the Maldives during its economic
framework will integrate sustainable fisheries, crisis by diversifying revenue sources, building
marine biodiversity protection, and community institutional capacity, and fostering development-
livelihoods. led cooperation. Vigilance is essential to prevent
other regional powers from exploiting Maldives’
Domestic Politics and Governance President economic vulnerabilities.
Muizzu is expected to consolidate his control,
supported by the sixth amendment to the
Maritime Cooperation and Security India
constitution. Reforms may include expanding
should enhance maritime cooperation through joint
e-governance platforms, though domestic political
surveillance, counterterrorism, and anti-piracy
polarisation could hinder policy implementation.
operations. Leveraging the strategic importance of
the Indian Ocean Region (IOR), India can deepen
Foreign Policy and Regional Engagement In
security ties to address shared threats like illegal
2025, Maldives will strengthen ties with South
fishing and trafficking. Bilateral agreements on
Asian neighbours, particularly India, focusing on
disaster preparedness and climate resilience will
maritime security, trade, and disaster management.
reinforce regional stability and counter Chinese
Financial distress will likely drive Maldives to seek
influence under the Belt and Road Initiative (BRI).
further economic and technical support. Globally,
Maldives will continue championing climate
Socio-Economic Partnerships India must
advocacy, leveraging its vulnerability to rising sea
prioritise socio-economic initiatives to build
levels to push for stronger commitments to net-
goodwill, including investments in sustainable
zero targets and financial assistance for climate
development, renewable energy, and eco-tourism.
adaptation. Active participation in international
Offering concessional loans and technical expertise
forums like the UNFCCC is anticipated.
for climate adaptation and fostering cultural
Strategic Priorities Maldives’ reliance on external exchanges, scholarships, and skill-building
factors, including global tourism trends and programmes for Maldivian youth will strengthen
climate funding, will heavily influence domestic ties and reduce external influence.
and foreign policies. Navigating geopolitical
tensions, particularly between India and China, Multilateral Engagement India can utilise forums
and addressing climate risks will demand strategic like SAARC and IORA to engage the Maldives on
policymaking. By aligning domestic initiatives shared priorities, including climate resilience and
with international partnerships, the Maldives can the blue economy. Collaborative projects within
build resilience and ensure sustainable growth. these frameworks and exploring a Bilateral Free

53
 State of the World: Emerging Trends and Way Forward

Trade Agreement for seafood imports will reinforce Regional and Strategic Implications The Arakan
India’s regional leadership. Army’s (AA) advances in Rakhine State, including
the capture of BGP-5 outpost and control of the
Address Maldivian Concerns While practicing Bangladesh border, underscore changing power
the ‘Neighbourhood First’ policy, India must dynamics. Similarly, other ethnic groups, like
remain attentive to Maldivian concerns and MNDAA, have seized regional commands,
sensitivities. Ahead of the 60th anniversary of impacting regional security and India’s strategic
diplomatic relations in 2025, India should reaffirm interests.
its commitment to mutual growth, regional security,
and the Vision for a Comprehensive Economic and Humanitarian and Economic Toll The conflict has
Maritime Security Partnership. claimed over 5,350 lives and displaced 3.3 million
people, plunging half the population into poverty.
Children are disproportionately affected, with 6
Myanmar million facing worsening conditions. Myanmar’s
economy is in crisis, with a 1 percent GDP
Annual Review
contraction projected for 2025, disruptions to trade,
and soaring food insecurity exacerbated by natural
Risk of Becoming a Forgotten Crisis The
disasters like Typhoon Yagi. Informal migration
Myanmar conflict grows increasingly complicated,
has increased, creating new vulnerabilities for
raising concerns of becoming a “forgotten crisis,”
citizens.
warned Julie Bishop, UN Special Envoy for
Myanmar. The successes of the Three Brotherhood Limited International Support International
Alliance (3BHA) since Operation 1027 have assistance has been slow. The US BURMA Act
revealed vulnerabilities in the military, including aimed at supporting resistance groups has seen
territorial losses, low morale, and recruitment sluggish implementation. Although sanctions and
challenges. Attempts to regain key intersections diplomatic efforts with allies and ASEAN aim to
have faced stiff resistance from ethnic groups. pressure the military, they have yielded limited
progress.
Shifting Power Dynamics The military’s 2024
extension of the state of emergency beyond China’s Strategic Balancing China’s influence
constitutional limits has drawn scepticism about in Myanmar remains significant. It engages both
transparency in its promise of “free and fair the junta and resistance, pursuing its strategic
elections.” Meanwhile, the coordinated efforts of interests through projects like the China-Myanmar
PDFs, LDFs, and EAOs have shifted battlefield Economic Corridor. However, escalating violence,
dynamics. Resistance groups have captured 80 such as the October attack on China’s consulate, has
towns, 200 military bases, and key commands, forced China to reassess its position, highlighting
such as Lashio, signalling significant setbacks for public resentment against its perceived support for
the Myanmar military. the junta.

54
 State of the World: Emerging Trends and Way Forward

ASEAN’s Struggles Divisions within ASEAN challenges such as arms and drug smuggling and
hinder its ability to address the crisis effectively. illegal cross-border movement. Early in the year,
Efforts such as the “Phnom Penh Peace Process” the government suspended the Free Movement
and December 2024 regional consultations in Regime (FMR) along the India-Myanmar border.
Thailand have failed to achieve consensus. Short By December 2024, the Ministry of Home Affairs
envoy tenures and political limitations further introduced a “border pass” system, regulated by
reduce ASEAN’s impact. the Assam Rifles, to allow individuals within 10
kilometres of the border to cross into Myanmar for
Implications for India up to seven days.

A Cautious Balancing Act India’s Myanmar policy Prognosis for 2025

reflects a cautious approach aimed at balancing its
security and economic interests, advancing its Act Continued Stalemate Myanmar is poised to
East Policy, and countering Myanmar’s growing endure another year of protracted conflict, with no
ties with China. This dual engagement is evident clear resolution in sight. While the military regime
in India’s External Affairs Minister, S. Jaishankar, faces mounting losses on the battlefield, it remains
meeting Myanmar’s Deputy Prime Minister and entrenched in central regions, retaining control
Foreign Minister, Than Shwe, in New Delhi— over key resources, making its complete ouster
the first high-level dialogue since the 2021 coup. unlikely. Meanwhile, the NUG and Ethnic Armed
Jaishankar emphasised the need for security for Organisations (EAOs) are making gains but lack
Indian projects, such as the Kaladan Multimodal the capacity for a decisive victory. Their struggles
Transport Project, while urging Myanmar to return to establish a unified front and stable governance
to democratic governance. further complicate the situation.

Engagement with Opposition Forces Alongside The risk of Myanmar fracturing into de facto
its engagement with Myanmar’s military regime, autonomous regions controlled by various armed
India has initiated limited dialogue with opposition groups remains significant. The military’s planned
forces, including the National Unity Government elections are unlikely to be free or fair and are
(NUG) and some ethnic armed groups near its expected to lack recognition from the international
borders. The rising influence of ethnic armed community.
groups and the weakening of Myanmar’s military
pose challenges to regional stability and India’s Regional and International Influence The
strategic interests, making this dual engagement a international community’s influence in Myanmar
pragmatic move to safeguard its position. remains minimal, while China continues to wield
significant sway. India and other regional powers
Addressing Border Security India has taken will also contribute to shaping events, albeit
steps to enhance border security amidst ongoing with limited leverage. With Malaysia assuming

55
 State of the World: Emerging Trends and Way Forward

ASEAN’s chairmanship, there is cautious optimism as a framework for resolving the crisis. However,
for renewed dialogue between conflicting sides. it also recognises the importance of a Myanmar-
However, a continuation of the current conflict led resolution, with ASEAN and neighbouring
without a clear victor appears the most likely countries acting as facilitators. Balancing these
scenario. approaches can help India remain a constructive
partner in the peace process.
Challenges to Peace and Stability Ceasefire
violations underscore the difficulty of achieving Focus on Local Development and Resilience
lasting peace, signalling an extended period India should redirect its development assistance
of instability. The ongoing conflict is likely to to empower local communities in Myanmar and
exacerbate the humanitarian crisis, prolonging the build their resilience. Such efforts can create a
suffering of the Myanmar people. stronger foundation for peace and stability while
safeguarding India’s national interests.
Policy Recommendations for India
By implementing these recommendations, India can
Broader Engagement with Stakeholders India adopt a more constructive and balanced approach
should expand its engagement to include the NUG, to addressing the Myanmar crisis, contributing to
key EAOs, and local communities, particularly in regional stability and security.
border regions. Leveraging the connections between
Northeast Indian states and their counterparts in
Myanmar can foster mutual understanding and Nepal
enhance regional cooperation. India should actively
encourage and support efforts toward an inclusive Annual Review
political solution, promoting dialogue between the
military, the NUG, and EAOs. Political Developments Nepal faced ongoing
political instability in 2024 but made strides
Reassessing Border Management India should toward stability with the formation of a coalition
revisit the necessity of extensive border fencing. government between the Nepali Congress (NC) and
While regulating border crossings is a step in the the Communist Party of Nepal (Unified Marxist-
right direction, alternative measures like temporary Leninist) [CPN (UML)]. On July 15, K.P. Sharma
fencing and advanced surveillance technologies Oli was sworn in as Prime Minister for his fourth
could balance security needs without alienating term, aiming to stabilise governance and address
border communities. political fragmentation.

Supporting ASEAN-Led Initiatives and Earlier in the year, a coalition between NC and
Myanmar-Led Solutions India has consistently the Communist Party of Nepal–Maoist Centre
supported the ASEAN-led Five-Point Consensus (CPN-MC) collapsed, prompting a leadership shift

56
 State of the World: Emerging Trends and Way Forward

to Pushpa Kamal Dahal of CPN-MC. However, trade, water resources, and security, were strained
internal divisions persisted, leading to frequent by border disputes and India’s scepticism toward
votes of confidence in Parliament. By July, the Chinese-funded projects. Nevertheless, initiatives
NC and CPN-UML had secured key ministries, like the Integrated Check Post and regional
signalling efforts to improve governance and cooperation through SAARC and BIMSTEC
political stability. remained focal points for fostering ties with India.

Economic Performance Nepal’s economy showed Simultaneously, Nepal expanded engagement with
moderate recovery in 2024, with GDP growth rising China, leveraging the Belt and Road Initiative
to 3.9 percent from 2 percent in 2023. Growth was (BRI) for infrastructure development. However,
driven by tourism, hydropower, and the services concerns over debt sustainability, highlighted by
sector. Inflation decreased from 7.7 percent in 2023 the Chinese-funded Pokhara airport, led Nepal to
to 5.4 percent, aided by lower fuel and housing seek more balanced financing arrangements. A new
costs. The country recorded surpluses in its current BRI framework signed in December 2024 included
account and balance of payments, supported by grants and loans, reflecting a pragmatic approach
record remittances of $10 billion, accounting for to foreign investment.
over 20 percent of GDP.
Implications for India
A significant milestone was achieved as Nepal
began exporting electricity to Bangladesh via Nepal’s political and economic progress in 2024
an Indian grid, marking its transition to a net holds strategic significance for India. As Nepal
electricity exporter. Fitch Ratings assigned Nepal stabilises under a new coalition government,
a “BB Minus” credit rating, reflecting low debt India must monitor its foreign policy trajectory,
distress, with public debt at 42.7 percent of GDP— especially the balance between India and China.
well below regional averages. Nepal’s participation in China’s Belt and Road
Initiative (BRI) raises concerns about excessive
Despite these gains, low private-sector credit reliance on Chinese funding in infrastructure and
demand and cautious industrial investment trade.
highlighted challenges. Excess liquidity in
banks and high exposure to real estate added India’s support remains crucial in sectors like
to economic concerns, necessitating policies to trade, water resources, and security, where Nepal
stimulate productive investments and manage non- relies heavily on its southern neighbour. The export
performing loans. of Nepali electricity to Bangladesh through India’s
grid underscores the potential for enhanced energy
Foreign Policy Balancing Nepal’s foreign policy cooperation. Strengthening ties in this area can
continued to navigate the competing interests of benefit both nations while reinforcing regional
India and China. Relations with India, essential for connectivity.

57
 State of the World: Emerging Trends and Way Forward

However, Nepal’s growing engagement with opportunities for economic gains but also the risk
China could escalate tensions on strategic issues. of entanglement in geopolitical rivalries. Nepal
To safeguard its interests, India must focus on must reassess its non-alignment policy, adopting
bolstering bilateral relations through collaboration a pragmatic approach to protect its national and
in vital sectors and proactive diplomacy. This strategic interests.
approach will help maintain Nepal’s political
and economic stability in alignment with India’s By fostering stable governance, refining economic
regional objectives, preventing a strategic tilt strategies, and pursuing balanced diplomacy, Nepal
toward China. By fostering mutually beneficial can navigate 2025’s complexities and secure long-
partnerships, India can support Nepal’s sustainable term stability and growth.
development while ensuring regional stability and
balance. Policy Recommendations

Prognosis for 2025 Bilateral Relations Overview In light of Nepal’s

recent political and economic developments,
Nepal begins 2025 with a new coalition government India should adopt a comprehensive approach to
between the Nepali Congress (NC) and the strengthen bilateral ties.
Communist Party of Nepal (UML), offering a
rare chance for political stability. This partnership Economic and Energy Cooperation India
provides an opportunity to implement long-term should prioritise enhancing economic and energy
policies in governance, the economy, and foreign cooperation by investing in cross-border power
relations. grids, hydropower projects, and renewable
energy initiatives. These efforts would facilitate
Economic Challenges and Opportunities The greater electricity trade among Nepal, India, and
coalition’s stability enables focus on addressing Bangladesh, benefiting all parties involved.
economic challenges. Nepal must refine its strategy
for sustainable growth, prioritising domestic Trade Relations To sustain robust trade
utilisation of its hydropower potential before relations, India should reduce non-tariff barriers
expanding exports. Chinese investments in energy and encourage Indian investments in Nepal’s
could boost growth and reduce import reliance, hydropower, agriculture, and tourism sectors.
but maintaining strong ties with India, Nepal’s key Expanding economic engagement can create win-
economic partner, remains essential for stability win scenarios for both nations.
and prosperity.
Political Stability and Governance Supporting
Balancing Foreign Relations Nepal faces political stability in Nepal is crucial. India must
the delicate task of balancing its relationships engage with the new coalition government
with China and India. Recent successes with by offering assistance in governance reforms,
China’s Belt and Road Initiative (BRI) highlight capacity-building, and anti-corruption measures.

58
 State of the World: Emerging Trends and Way Forward

This support can help foster a stable political to address the issues arising from Pakistan’s
environment conducive to mutual growth. instability.

Security and Border Management India should Political Turmoil and Election Aftermath
deepen its collaboration with Nepal on security Pakistan’s political landscape remained volatile
matters, including border management, illegal in early 2024 following February 8 elections.
immigration, counterterrorism, anti-smuggling, and Despite disruptions such as internet shutdowns
intelligence sharing. Furthermore, India can assist and lower voter turnout compared to 2018, youth
Nepal in modernising its military infrastructure, engagement stood out, with 44 percent of voters
reducing reliance on other external powers like aged 18–35. While 167 political parties contested,
China. The recent border demarcation dispute no party secured a majority, resulting in prolonged
should be resolved through bilateral dialogues, coalition negotiations. The Pakistan Muslim
joint surveys, and diplomatic channels. League-Nawaz (PML-N), Pakistan People’s Party
(PPP), and smaller regional parties struggled to
Navigating Nepal’s Foreign Policy India should
form a coalition, while independent candidates
support Nepal in navigating its relationships with
aligned with Pakistan Tehreek-e-Insaf (PTI) sought
both India and China. By offering alternatives
alliances. Amidst this gridlock, the worsening
to Chinese financing while respecting Nepal’s
economic crisis heightened the need for a stable
sovereignty, India can strengthen its ties and
government to secure international financial
mitigate potential risks of debt traps or undue
support.
external influence.

The Pakistan Army played a pivotal role in shaping

Cultural Ties and Regional Integration
the government, backing Shehbaz Sharif. Sharif’s
Strengthening cultural ties through educational
coalition government remained heavily reliant
exchanges, cultural programmes, and tourism
on military support, lacking a robust political
initiatives can deepen the India-Nepal bond.
mandate.
Additionally, India should promote Nepal’s active
participation in regional forums like SAARC and
Legislative and Constitutional Controversies
BIMSTEC to enhance its role in regional economic
Post-election, tensions escalated as the PML-N-
and security cooperation.
led coalition proposed legal changes intensifying
government-opposition conflicts. A key
Pakistan controversy was the amendment to the Pakistan
Army Act, extending the army chief’s tenure and
Annual Review
removing the retirement age for four-star generals.
Pakistan’s political and economic instability Critics argued this consolidated military power,
presents a significant challenge to regional security. undermining civilian oversight and threatening
India should pursue a comprehensive approach democratic institutions.

59
 State of the World: Emerging Trends and Way Forward

Additionally, judicial reforms sparked debate. The Escalating Internal Security Challenges
26th Constitutional Amendment empowered the Pakistan’s internal security situation has worsened,
Judicial Commission of Pakistan (JCP) to form with militant violence claiming 757 lives in the
seven-member constitutional benches, raising first eight months of 2024. The Tehreek-e-Taliban
concerns over delays and judicial independence. Pakistan (TTP) and the Baloch Liberation Army
The expansion of the Supreme Court from 17 (BLA) remain significant threats, particularly
to 34 judges, alongside increased numbers in in Khyber Pakhtunkhwa and Balochistan. The
the Islamabad High Court, faced criticism for BLA’s expansion into previously stable areas
potential judicial “packing” aimed at advancing and its suspected alliance with the TTP, possibly
the government’s agenda, risking further erosion equipped with advanced American weaponry from
of judicial integrity and democratic checks and Afghanistan, have intensified the crisis.
balances.
Local communities, facing disrupted lives and
Economic Challenges Pakistan’s economic limited trust in military operations, demand the
situation remains precarious, with the 2024-2025 expulsion of both militants and the military. Cross-
budget reaching Rs. 18.877 trillion—a 30 percent border terrorism and unresolved concerns over
increase from the previous year. Finance Minister
TTP hideouts in Afghanistan further complicate
Muhammad Aurangzeb’s measures aim to address
the government’s response. Counter-terrorism
the fiscal deficit and balance of payments but
cooperation with the US may become crucial, as
include sharp tax increases: 48 percent for direct
both countries view TTP and ISKP as regional
taxes and 35 percent for indirect taxes. The defence
threats.
sector dominates the budget, highlighting the
military’s financial influence.
Impact on China-Pakistan Relations Attacks
on Chinese nationals, especially in Balochistan,
Critics argue the increased tax burden
have strained Pakistan’s ties with China. Beijing’s
disproportionately impacts the salaried middle class
concerns over safety have stalled key infrastructure
while neglecting Pakistan’s large undocumented
projects, including the $6.8 billion ML-1 railway.
economy. This approach has fuelled concerns about
The future of the China-Pakistan Economic
insufficient economic relief and declining public
Corridor (CPEC) is at risk, jeopardising Pakistan’s
trust in the government’s fiscal management.
economic prospects if security issues remain
Pakistan’s dependence on IMF support adds to its unaddressed.
challenges. With rising unemployment, inflation,
and national debt, the government faces pressure to Implications for India
implement reforms or renegotiate IMF agreements.
These decisions risk further economic stagnation, Pakistan’s political and economic instability in
leaving the country vulnerable to external pressures 2024 poses substantial challenges for India. The
and public dissatisfaction. fragmented ruling coalition, growing military

60
 State of the World: Emerging Trends and Way Forward

dominance, and internal divisions create a volatile amendments could erode civilian oversight and
neighbour, potentially destabilising the region. judicial independence, deepening institutional
These governance issues could alter Pakistan’s fragility.
foreign policy, complicating relations with India
on sensitive matters like Kashmir and cross-border On the economic front, reliance on IMF support and
terrorism. mounting debt will exacerbate financial instability.
Austerity measures, though necessary, may heighten
Pakistan’s deepening economic crisis, marked by public dissatisfaction by disproportionately
IMF dependency and rising debt, risks internal burdening the middle class. Persistent economic
unrest, further exacerbating security concerns for stagnation, rising unemployment, and inflation
India. The insurgency in border regions, particularly could intensify social unrest, adding to Pakistan’s
from groups like the Tehreek-e-Taliban Pakistan internal challenges.
(TTP) and Baloch insurgents, increases threats to
Indian interests and regional stability. Security concerns will likely escalate, with
insurgencies in Balochistan and Khyber
Compounding these challenges is Pakistan’s Pakhtunkhwa, driven by groups like the Tehreek-
strained relationship with China. Security threats e-Taliban Pakistan (TTP) and Baloch Liberation
to Chinese nationals and delays in infrastructure Army (BLA), posing severe threats. Cross-border
projects, including the China-Pakistan Economic terrorism and militant alliances will further
Corridor (CPEC), could disrupt regional dynamics. complicate Pakistan’s fragile security landscape,
Shifts in Pakistan-China ties may carry significant especially amid tensions with Afghanistan.
economic and strategic implications for India.
Pakistan’s strained relationship with China could
Amid these uncertainties, India must strengthen also persist, affecting critical infrastructure projects
its security apparatus, remain diplomatically such as the China-Pakistan Economic Corridor
proactive, and prepare for potential changes in (CPEC). Successfully navigating these intertwined
Pakistan’s political and economic trajectory. domestic and external challenges will be vital for
Pakistan’s stability in 2025.
Prognosis for 2025
Policy Recommendations
Pakistan is poised to face ongoing political and
economic volatility in 2025, with significant India must adopt a multifaceted approach to address
implications for domestic stability and regional the challenges posed by Pakistan’s instability.
security. Fragmented coalitions and the military’s
expanding influence are likely to perpetuate Strengthening Border Security For India,
political paralysis, undermining democratic enhancing surveillance and intelligence-sharing
processes and governance. Further constitutional with Afghanistan and neighbouring countries

61
 State of the World: Emerging Trends and Way Forward

is crucial to counter insurgencies like the TTP recovery, and rebuilding public trust. A significant
and the Baloch Liberation Army (BLA). This shift occurred with Anura Kumara Dissanayake’s
will help mitigate cross-border terrorism risks election as President, marking a departure from
effectively. traditional power structures. Dissanayake, leader
of the left-wing Janatha Vimukthi Peramuna (JVP)
Bolstering Counter-Terrorism Diplomacy and the National People’s Power (NPP) coalition,
Deepening ties with key Western powers, gained support from youth, rural populations, and
particularly the United States, will be essential for urban middle classes disillusioned by past political
robust counter-terrorism cooperation, focusing on instability.
curbing regional militant activities.
NPP’s Victory and Its Challenges In the November
Monitoring Political Dynamics India must 2024 parliamentary elections, Dissanayake’s NPP
closely track Pakistan’s shifting political landscape, achieved a historic victory, signalling a demand
particularly military influence, judicial changes, for structural change, transparency, and an end
and coalition stability, to anticipate and manage to corruption. This win marked a repudiation of
potential regional spillovers. the traditional political elite. However, governing
amidst an ongoing economic crisis, high debt
Preparing for Economic Fallout Strengthening levels, and a fragmented political environment
border infrastructure and fostering local economic presents significant challenges for the NPP as
resilience will help manage risks such as refugee it seeks to implement reforms while navigating
influx or economic instability stemming from resistance from traditional elites.
Pakistan’s financial struggles.
Economic Recovery and IMF Support On
Countering China’s Influence Vigilance over the economic front, Sri Lanka reached a pivotal
the CPEC and collaborative efforts with regional milestone in 2024 with the release of the third
partners are necessary to balance China’s strategic tranche of funding from the International
footprint and safeguard India’s interests. Monetary Fund (IMF), part of an extended bailout
programme aimed at stabilising the economy. This
tranche brings Sri Lanka’s total IMF financial
Sri Lanka support under the 2023-2026 programme to
about $1.3 billion. The World Bank reported a 5
Annual Review percent growth in the Sri Lankan economy in the
first quarter of 2024, with inflation remaining low.
Political Shifts and Leadership Changes Sri Despite challenges, including an 18.3 percent
Lanka has been navigating a challenging political increase in the merchandise trade deficit, the
landscape in 2024, following the 2022 economic country benefitted from higher tourism receipts,
crisis. The leadership is focusing on reforms, remittances, and development partner support.

62
 State of the World: Emerging Trends and Way Forward

Implications for India that could destabilise the region, particularly in

terms of maritime security and access to the Indian
Sri Lanka’s Political and Economic Landscape Ocean. Sri Lanka’s cooperation in regional security
As Sri Lanka’s new president, Anura Kumara frameworks, such as BIMSTEC and IORA, will be
Dissanayake, navigates a complex political and vital for India’s strategic interests.
economic environment, his approach to India will
be pivotal for both nations. India is an essential Challenges in Indo-Sri Lankan Relations
economic partner for Sri Lanka, particularly in Despite opportunities to strengthen bilateral ties,
sectors like agriculture, energy, digital projects, challenges remain. Issues such as the fishermen
and infrastructure. Dissanayake’s commitment to dispute, Tamil minority rights, and Sri Lanka’s
foreign debt—especially its dealings with China—
strengthening Sri Lanka’s economic self-reliance
will influence the relationship. During his visit,
will likely foster deeper ties with India, building on
Prime Minister Modi urged Dissanayake to address
existing trade agreements. This was reflected in his
Tamil aspirations through constitutional reforms
first visit to India as president in December 2024,
and provincial elections. Dissanayake’s upcoming
where he acknowledged India’s crucial role in Sri
visit to China will also be a significant factor in
Lanka’s post-crisis recovery.
balancing Sri Lanka’s foreign policy.

Strengthening Economic Ties with India During

Future Prospects for Bilateral Cooperation
his visit, Dissanayake and Indian officials discussed
Under Dissanayake’s leadership, Sri Lanka has
expanding cooperation, including diversifying
an opportunity to reset its foreign policy. India
Sri Lanka’s energy sources and supporting
should position itself as a reliable partner, focusing
renewable energy investments. India’s proximity
on strengthening economic ties, regional security,
and economic influence make it a key player in Sri
and addressing ethnic reconciliation. By fostering
Lanka’s recovery. However, the extent of India’s deeper cultural and people-to-people links, both
involvement will depend on how Dissanayake nations can build a durable partnership. The
manages domestic political pressures and ensures success of Dissanayake’s presidency will depend
mutual benefit in the partnership. on his ability to balance relationships with both
China and India, ensuring Sri Lanka’s long-term
Balancing Foreign Relations and Regional peace and prosperity.
Security Dissanayake’s foreign policy may seek a
balance between India and China, both crucial to Prognosis for 2025
Sri Lanka’s economic recovery. While continuing
engagement with China is likely, Sri Lanka’s ties Political Landscape As Sri Lanka enters 2025
with India will be pivotal in maintaining regional under President Anura Kumara Dissanayake, the
stability and security. India is focused on preventing nation stands at a critical juncture in its economic
any foreign influence recovery and political evolution. The NPP’s 2024

63
 State of the World: Emerging Trends and Way Forward

victory offers opportunities but presents challenges Policy Recommendations

in consolidating governance amidst a fragmented
political landscape. The administration’s success Diversify and Expand Economic Engagement
hinges on implementing anti-corruption reforms, India should build on existing trade agreements
enhancing transparency, and maintaining public with Sri Lanka, focusing on sectors like energy and
trust, especially among youth and rural voters. infrastructure. Promoting investment in these areas
would aid Sri Lanka’s recovery and provide India
Economic Recovery Sri Lanka’s economy is on with strategic economic leverage.
a recovery path, supported by the IMF’s extended
bailout programme and strategic measures. Support Sri Lanka’s Economic Recovery India
Growth is anticipated, with inflation under should continue offering financial and technical
control and positive contributions from tourism support, particularly through concessional loans
and remittances. However, addressing high debt and clean energy partnerships. Collaborating on
levels and the lingering effects of the 2022 crisis renewable energy projects will help Sri Lanka
remains imperative. Structural reforms will be key achieve long-term self-reliance.
to sustaining progress.
Bolster Security Ties and Regional Frameworks
Foreign Policy Dissanayake’s foreign policy India should strengthen ties with Sri Lanka in
will focus on balancing Sri Lanka’s strategic regional security frameworks such as IORA,
position between China and India. Strengthening Colombo Security Conclave, and BIMSTEC,
economic and diplomatic ties with both nations enhancing maritime security and regional stability.
while managing their competing interests will be a
significant challenge. Navigating this balance will Collaborate on Maritime Security Given Sri
be critical to Sri Lanka’s regional standing. Lanka’s strategic location, India must ensure
alignment on maritime security, focusing on
Ethnic Reconciliation Addressing ethnic combating piracy, trafficking, and other threats that
reconciliation and advancing constitutional reforms could destabilise the region.
for greater autonomy and provincial elections
will be crucial for achieving lasting peace. The Address Strategic Concerns with China India
international community, including India, will should monitor Sri Lanka’s growing ties with China,
closely monitor progress on these fronts. particularly regarding Chinese investments in
critical infrastructure. Transparency in agreements
Outlook for 2025 Sri Lanka faces a mix of and joint ventures ensuring mutual benefits will
challenges and opportunities. The year ahead will safeguard India’s maritime interests.
test Dissanayake’s leadership as the country seeks
to balance domestic reforms, economic recovery, Support Tamil Ethnic Reconciliation India should
and strategic foreign policy decisions. advocate for full implementation of Sri Lanka’s

64
 State of the World: Emerging Trends and Way Forward

Constitution, especially the 13th Amendment, Leverage Diaspora Communities India can
to grant provincial autonomy, addressing Tamil engage with the Indian-origin diaspora in Sri
aspirations and fostering ethnic peace. Lanka to deepen cultural and trade relations, acting
as a bridge between the two countries.
Support a Balanced Foreign Policy India should
encourage Sri Lanka to maintain a balanced foreign Be Attuned to Political Shifts in Sri Lanka India
policy, avoiding over-reliance on any one country, should closely monitor political developments
and prioritising regional cooperation and neutrality. under President Dissanayake and adapt its support
to align with the aspirations of the Sri Lankan
people, while maintaining strategic autonomy.
Engage in Constructive Dialogue on Debt and
External Relations India should offer diplomatic
Balance Diplomacy on Security Concerns India
support in Sri Lanka’s debt management
should diplomatically address security concerns,
and encourage a pragmatic approach to debt
such as foreign surveillance vessels, and maintain
restructuring, ensuring economic stability and
high-level dialogues with Sri Lanka to ensure
reducing dependency on one creditor.
transparency in security arrangements.

Foster Cultural and Educational Exchanges Maintain High-Level Diplomatic Engagement

India should promote people-to-people exchanges Regular visits by senior Indian officials to Sri
and educational initiatives to strengthen bilateral Lanka will strengthen bilateral relations, ensuring
ties, contributing to long-term peace and mutual alignment on regional security, economic
understanding. development, and foreign policy.

65
 State of the World: Emerging Trends and Way Forward

Regional

Central Asia eco-friendly practices to reduce reliance on fossil

fuels. Key developments include Uzbekistan’s
partnership with Rosatom for nuclear power
Annual Review
and Kazakhstan’s push for carbon neutrality
by 2060. These efforts reflect a commitment to
Central Asia has continued to emerge as a region
balancing economic growth with environmental
of significant transformation and rising influence,
responsibility.
moving beyond its historical image as a mere
battleground for geopolitical rivalries. The region
has shown greater adaptability to global shifts and Regional Cooperation and Integration Regional
challenges than ever before. collaboration advanced through initiatives like
the Central Asia–2040 Concept and proposals for
Growing Regional Agency Central Asia is a Single Regional Market. Economic ties have
asserting its global agency, moving beyond its deepened, with intra-regional trade exceeding
traditional image as Russia’s periphery or a $11 billion, alongside significant infrastructure
sphere of Chinese influence. In 2024, the region and energy projects. However, unresolved issues
leveraged multi-vector diplomacy and proactive like border disputes and the absence of a treaty
engagement to mitigate reliance on traditional on friendship and cooperation highlight lingering
powers while deepening ties with diverse global challenges.
partners. Strategic investments in innovation,
infrastructure, and trade connectivity underpinned Geopolitical Dynamics and External Players
sustained economic growth, positioning the region Central Asia navigates a complex interplay of
as a critical hub in global networks. influence from Russia, China, the West, and
Turkey. While Russia and China maintain strong
Transition to a Green Economy Central Asian economic and strategic ties, the region increasingly
nations are transitioning towards sustainability, diversifies partnerships, exploring ties with the
focusing on renewable energy, nuclear power, and EU, US, and Turkey. This diversification reflects

66
 State of the World: Emerging Trends and Way Forward

a strategy to balance major power dynamics and customs, and infrastructure challenges is crucial
secure broader opportunities. to unlocking the potential of these corridors and
enhancing regional trade.
Implications for India
Prognosis for 2025
Initial Progress and Recent Decline India’s
engagement with Central Asia gained momentum Central Asian nations will pursue diversified foreign
following Prime Minister Modi’s 2015 visit to relations by expanding diplomatic and economic
five Central Asian nations, marked by enhanced ties with a broader range of global partners.
diplomatic ties and participation in regional
organisations. However, this upward trajectory Engagement with the Global South will intensify,
has stalled. Key summits, such as the biannual emphasising partnerships with Africa, the Middle
leaders’ meeting initiated in 2022 and the foreign East, and Latin America to enhance economic
ministers’ dialogue, have not taken place. This cooperation, cultural exchange, and political
decline indicates a lack of sustained focus on alignment.
India’s Eurasian policy.
Relations with Russia and China will remain
Limited Trade Potential Trade between India pivotal, with efforts to maintain robust economic
and Central Asia remains far below potential. and political ties while minimising over-reliance
Between April and October 2024, India’s exports on these dominant powers.
to the region totalled $532.66 million, while
imports amounted to just $201.74 million. Despite Greater regional integration will be prioritised
significant opportunities for growth, trade is through trade agreements, shared infrastructure
constrained by persistent connectivity challenges. projects, and unified policies on security,
environment, and diplomacy.
Underutilised Connectivity Corridors
Connectivity barriers, particularly the incomplete Collaborative regional development will leverage
development of the Chabahar Port and the North- each nation’s strengths, such as Kazakhstan’s
South Transport Corridor, are major obstacles. natural resources, Uzbekistan’s industrial base,
These routes, vital for improving trade efficiency and Turkmenistan’s energy sector.
and reducing transit times, remain underutilised
due to infrastructure gaps, logistical hurdles, and Uzbekistan and Kazakhstan will navigate emerging
misinformation about sanctions on Iran. competition for regional leadership, balancing
rivalry with cooperative initiatives.
Addressing Connectivity and Trade Challenges
To regain momentum in its Central Asia engagement, Strengthened trade agreements and economic
India must prioritise the operationalisation of partnerships with neighbouring countries will
these connectivity projects. Overcoming banking, underpin regional economic growth and stability.

67
 State of the World: Emerging Trends and Way Forward

Enhancing regional security measures will explore exporting defence equipment to Central
address threats like terrorism and organised crime, Asia, as these countries have recently increased
contributing to long-term stability. their defence budgets and are seeking to purchase
arms from other countries such as China and
Environmental cooperation will serve as a Turkey.
diplomatic tool, fostering regional unity and
bolstering collective influence in global climate Strengthening Soft Power in Central Asia To
negotiations. further strengthen ties, India should work on
enhancing its soft power in the region by increasing
Policy recommendations educational scholarships, promoting cultural
exchanges, and supporting tourism initiatives to
Reassess India’s Policy Toward Central Asia foster people-to-people connections.
India must reassess its approach to Central Asia
and take decisive action based on the changing West Asia
dynamics. There is a pressing need to resume
delayed dialogues at the levels of foreign ministers Annual Review
and heads of state to foster stronger relations.
The West Asian region in 2024 was marked by
Diversify Trade and Strengthening Economic significant turbulence stemming from entrenched
Relations To enhance bilateral trade, India should conflicts, evolving power dynamics, and broader
look to diversify its export and import portfolio global geopolitical influences. Early signs of
to ensure a balanced trade relationship. Central détente were visible through Iran’s rapprochement
Asia presents a wealth of opportunities for Indian with Gulf States, Bashar al-Assad’s reintegration
businesses, particularly in the manufacturing into the Arab fold, and Israel’s normalisation
sector, and should be a key area for investment. efforts. However, these positive developments were
overshadowed by heightened conflicts following
Expedite Chabahar Port Development The Hamas’s attack on Israel.
progress of Chabahar Port should be accelerated
to improve connectivity between India and Central Israel-Palestine Conflict Intensifies Under
Asia, and Central Asian nations should be actively Prime Minister Netanyahu, Israel’s hardline stance
encouraged to take part in this initiative. against Palestinian self-determination and a two-
state solution sustained the longstanding Israel-
Enhance Defence Cooperation Defence Palestine conflict. The Palestinian Authority,
cooperation between India and Central Asia facing declining credibility, failed to counter
currently remains underdeveloped, and India can Hamas effectively. In response to the October 7,
play a role by offering defence training to these 2023, attack by Hamas, Israel launched a military
nations. Additionally, India has the opportunity to campaign aimed at rescuing hostages, reoccupying

68
 State of the World: Emerging Trends and Way Forward

Gaza, and expanding settlements in the West Bank Global Power Interventions Major global powers
and East Jerusalem. This conflict caused extensive vied for influence in West Asia.
human and infrastructural devastation, attracted
global condemnation, and weakened Israel’s • United States: The Biden administration
international standing. Domestically, Israel faced maintained robust support for Israel, launched
mounting challenges, including judicial reform strikes against Iranian-backed groups, and
disputes, economic slowdowns, reduced foreign fostered coalitions to secure navigation
investment, workforce shortages, and security routes. Efforts were also made to bolster
concerns. Israel-Arab normalisation and preserve U.S.
influence.
Northern Border Tensions Israel also
experienced limited conflict with Hezbollah • China: By mediating Saudi-Iran relations,
along its northern border. Hezbollah’s small-scale China reduced sectarian tensions and
operations displaced 70,000 Israelis but adhered advanced its economic initiatives, including
to established engagement rules. Israel responded the Abraham Accords and I2U2 partnership,
with airstrikes and ground operations, eventually to promote regional integration.
degrading Hezbollah’s capabilities. A ceasefire
on November 26 marked Hezbollah’s military Economic and Strategic Adjustments Gulf States
defeat, though uncertainties about Israel’s northern faced challenges from falling oil prices and OPEC+
security remained. production cuts, accelerating diversification efforts
toward knowledge-based economies. Despite the
Houthis and Regional Instability The Houthis Gaza conflict, the UAE and Bahrain maintained
leveraged Yemen’s strategic location to disrupt ties with Israel, while Saudi Arabia signalled
Red Sea trade and target Israel with missiles, openness to normalisation, contingent on U.S.
increasing regional instability while reducing security assurances.
Yemen’s frontline conflicts. Meanwhile, Iranian-
backed groups in Iraq ceased attacking U.S. bases Spillover Effects and Regional Instability
by early 2024, signalling a tactical recalibration. Instability strained neighbouring states like Egypt,
Jordan, and Lebanon, exacerbating fragile socio-
Syria’s Evolving Conflict Syria remained a focal economic conditions and raising fears of conflict
point of U.S.-Israel and pro-Iranian engagement. spillover. The interplay between conflict and
The Assad regime weakened significantly due to cooperation highlighted the region’s complex and
limited Russian support and degraded Hezbollah volatile dynamics, shaping its trajectory into 2025.
capabilities. In November, Hayat Tahrir al-Sham
toppled Assad, marking a significant power shift. Implications for India
Israel escalated airstrikes on Hezbollah and Iranian
targets, redefining its strategic rules amid Iran’s West Asia’s volatility carries significant
advancing nuclear programme. implications for India, a country deeply connected

69
 State of the World: Emerging Trends and Way Forward

to the region through economic, strategic, and Strategic Partnerships The instability in West
cultural ties. The Gaza war and the escalating Asia emphasises the importance of India’s strategic
risk of a broader regional conflict present serious engagements. Strengthening security cooperation
challenges to India’s foreign policy objectives. with Gulf States and utilising mechanisms like the
India’s engagement with West Asia has intensified, India-UAE-France trilateral forum can help India
driven by priorities such as energy security, trade, contribute to regional stability while safeguarding
and connectivity initiatives like the International its interests.
North-South Transport Corridor (INSTC) and
the India-West Asia-Europe Economic Corridor Countering Extremism The resurgence of Sunni
(IMEC). The Comprehensive Economic jihadist groups like ISIS-K and the power vacuum in
Partnership Agreement (CEPA) with the UAE Syria pose direct threats to India’s national security.
highlights India’s growing integration into the With growing signs of radicalisation in South Asia,
regional supply chain, particularly in sectors like particularly in Pakistan and Bangladesh, India
pharmaceuticals and technology. must remain vigilant against the potential spillover
of extremist ideologies and activities.
Energy Security West Asia accounts for over 60
percent of India’s oil imports, making it critical
India’s ability to navigate these challenges will
to India’s energy needs. Prolonged hostilities,
be critical to sustaining its regional influence and
especially the potential for an Israel-Iran conflict,
protecting its strategic interests amidst West Asia’s
risk disrupting oil and gas supplies, leading to
continuing volatility.
price volatility and threatening India’s economic
stability and growth ambitions.
Prognosis for 2025
Diaspora Concerns India’s expatriate population
in the Gulf, exceeding eight million, faces Israel’s Strategy Israel’s strategy involves
heightened risks from regional instability. creating conditions for evacuating Gaza’s civilian
Escalating conflicts could lead to displacement, population to the Sinai Peninsula, establishing
job losses, and repatriation, severely impacting military control, and expanding settlements
remittance flows that are vital to India’s economy. while preventing Palestinian return. Ultra-
nationalist factions support this to reshape Gaza’s
Geopolitical Balancing India’s delicate balancing demographics and preserve Israeli dominance.
act between strong ties with Israel and maintaining However, this policy faces resistance due to
goodwill with Arab and Muslim-majority nations is potential destabilisation in Egypt’s Sinai Peninsula
increasingly strained. The Gaza war has intensified and international condemnation.
global criticism of Israel, complicating India’s
neutral stance and risking alienation of key Gulf Egyptian Position Already grappling with
Cooperation Council (GCC) partners or triggering economic crises and regional challenges, Egypt
domestic political repercussions. is wary of hosting Palestinian refugees. While

70
 State of the World: Emerging Trends and Way Forward

economic incentives like aid or debt relief refugee issues and regional ambitions.
might influence its stance, Cairo seeks to avoid
exacerbating domestic instability. Egypt’s role Turkiye’s Role Turkiye’s enhanced influence in
remains critical in any ceasefire or post-war Syria enables it to broker power among Syrian
agreements with Israel. factions and pursue its strategic goals, including
countering Kurdish forces. However, tensions
Competing Visions for Regional Order with Israel and competition with Gulf states could
escalate.
• Hamas: Aims to weaken Israel through a
multi-front war and disrupt normalisation The interplay of these forces will shape West
efforts. Asia’s future, testing the diplomatic and military
strategies of regional and global actors.
• Iran-Hezbollah: Seeks to erode Israel’s
strength and U.S. presence via attritional Policy Recommendations
warfare.
India’s strategic engagement with West Asia,
• U.S.: Supports Israel while pushing for
a region of critical economic and geopolitical
regional stability through normalisation deals
importance, requires a balanced and proactive
and security arrangements.
approach. Amid regional instability and global
• Israel: Focuses on degrading adversaries, power shifts, India must focus on securing its
reoccupying Gaza, and establishing territorial interests while fostering peace and stability. The
buffer zones in Syria. following recommendations provide a structured
framework for India’s West Asia policy in 2025:
Iran’s Dilemmas Facing setbacks like Hezbollah’s
weakening, Assad’s fall, and Israeli strikes, Strengthen Economic Engagement
Iran’s strategic focus shifts towards rebuilding
its deterrence and alliances. Domestically, public Pursue Strategic Trade Agreements
discontent and potential leadership transitions may
create additional challenges. • Accelerate negotiations for the India-Gulf
Cooperation Council (GCC) Free Trade
Syria post-Assad The HTS-led transitional Agreement (FTA), addressing key issues like
government is navigating fractured opposition tariffs on petroleum products and regulatory
factions and announcing reforms. Challenges compliance. Building on the Comprehensive
include managing sectarian divisions, avoiding Economic Partnership Agreement (CEPA)
a power vacuum, and securing international signed with the UAE in 2022, India should
legitimacy. Russia faces a strategic setback, while appoint a dedicated negotiator to finalise the
Turkey emerges as a dominant player, balancing FTA.

71
 State of the World: Emerging Trends and Way Forward

• Expand the India-Middle East-Europe Attract Investments from GCC Countries

Economic Corridor (IMEC) to include
Egypt, enhancing connectivity and trade • Showcase high-return infrastructure projects
opportunities. and implement investor-friendly policies.
Collaborate with the private sector in Saudi
Leverage Regional Connectivity Arabia and the UAE to attract investments.
Initiatives
Enhance Labour Mobility and Tourism

• Prioritise operationalisation of projects like

• Develop policies to streamline labour mobility
the International North-South Transport
and ensure the welfare of Indian workers in
Corridor (INSTC), IMEC, and Chabahar
GCC countries, who contribute over $125
Port. Seek strategic support and negotiate
billion annually to India’s economy.
sanctions waivers for Iran to facilitate these
initiatives. • Expand aviation connectivity and tourism to
capitalise on India’s growing middle class
• Integrate Palestinian territories into IMEC to and outbound tourism potential.
enhance political legitimacy and contribute
to reconstruction and development efforts. Develop a Regional Security Framework

Diversify Economic Partnerships Counterterrorism and Maritime Security

• Encourage investments in non-oil sectors • Deepen intelligence-sharing and

such as infrastructure, education, healthcare, counterterrorism cooperation with partners
and digital public infrastructure. like the UAE, Oman, and Israel. Conduct
joint military exercises and naval missions
to enhance maritime security in critical
• Facilitate joint ventures in research and
waterways, including the Red Sea and the
development (R&D) in biotechnology,
Strait of Hormuz.
artificial intelligence, and pharmaceuticals,
particularly with UAE and Saudi Arabia.
Address Internal Regional Divides
Establish joint manufacturing hubs
combining India’s capabilities with GCC • Build a multi-aligned regional security
nations’ logistical strengths. framework, leveraging diplomatic
engagements and soft power to address
• Develop logistical services and cold-chain limitations in India’s military capacity.
networks for efficient pharmaceutical
distribution, leveraging India’s production • Engage with Iran pragmatically, balancing
strengths. its inclusion in regional dialogues with

72
 State of the World: Emerging Trends and Way Forward

concerns over its support for militant groups. in infrastructure, telecommunications, and
Streamline policymaking by placing Iran energy sectors.
under the Gulf division in the Ministry of
External Affairs. Align with the United States Strategically

Contribute to Israel-Palestine Peace Efforts • Coordinate with the US on counterterrorism,

cybersecurity, and maritime security, while
• Advocate for a two-state solution, supporting addressing divergences over policies toward
the Palestinian National Authority (PNA) Iran and China.
while condemning terrorism. India’s balanced
approach can contribute to long-term peace. • Monitor the impact of US presidential
election outcomes on West Asia and adjust
• Use platforms like I2U2 and IMEC to promote India’s policies accordingly.
reconstruction and economic development in
Gaza and the West Bank. Address Geopolitical Challenges

Enhance Strategic Partnerships with Key

Respond to Iran’s Regional Activities
Players
• Monitor Iran’s support for groups like
Build Long-Term Relations with UAE and
Hezbollah and its nuclear ambitions. Advocate
Saudi Arabia
for a return to the Joint Comprehensive Plan
of Action (JCPOA) to stabilise tensions.
• Strengthen defence cooperation and
technology collaboration in energy transition,
• Prepare for potential leadership transitions in
cybersecurity, and space exploration.
Iran that could lead to internal instability or
shifts in foreign policy.
• Collaborate on renewable energy projects,
focusing on hydrogen and clean energy
Navigate the Israel-Hamas Conflict
technologies to support global transition
goals.
• Develop contingency plans for various
outcomes of the conflict. Support
Manage China’s Influence
international ceasefire efforts and long-
• Position IMEC and INSTC as alternatives term peace initiatives while maintaining a
to China’s Belt and Road Initiative (BRI) to balanced stance.
counterbalance its growing influence.
• Leverage India’s historical ties with both
• Enhance economic and security partnerships Israel and Arab states to strengthen its
with GCC nations to limit China’s dominance mediator role.

73
 State of the World: Emerging Trends and Way Forward

Adopt a Comprehensive Regional Policy • Enhance regulatory and policy frameworks

to attract global investments and harmonise
Shift from Bilateral to Regional Approach trade standards.

• Formulate a cohesive regional policy to Prepare for Contingencies

replace the ad-hoc bilateral approach,
engaging with regional organisations and • Develop comprehensive strategies to address
promoting platforms like I2U2. disruptions in the West Asia, including
energy market volatility, escalated conflicts,
• Enhance India’s role in BRICS by addressing
and shifts in US foreign policy. Strengthening
economic issues and fostering partnerships
regional partnerships can mitigate risks and
with Africa and West Asia.
ensure stability.

Invest in Regional Expertise

India’s engagement with West Asia in 2025 must
balance economic ambitions, strategic interests,
• Establish dedicated divisions in think tanks
and academic institutions to study West Asia and geopolitical realities. By adopting a multi-
and provide policy-relevant insights. dimensional approach encompassing economic
partnerships, regional stability, and strategic
Leverage India’s Strengths autonomy, India can solidify its role as a responsible
and influential player. These recommendations aim
Utilise the Three Ds Framework to ensure India’s interests are safeguarded while
fostering peace and prosperity in West Asia.
• Demography: Harness India’s youthful

Indo-Pacific
population to drive start-ups and partnerships
in education, logistics, and finance.

Annual Review
• Diversity: Promote India’s manufacturing
base and creative economy for co-creation in
Strengthened Security Cooperation Among
arts, design, and cultural enterprises.
Quad Advanced naval exercises in March and
August focused on interoperability, maritime
• Development Diplomacy: Focus on energy,
water, food security, and health through domain awareness, and anti-submarine warfare.
initiatives like IMEC and I2U2.
Initiative launched to combat illegal, unreported,
Address Capacity Issues and unregulated (IUU) fishing using satellite
tracking and information sharing.
• Invest in naval capabilities and infrastructure
to safeguard India’s interests in critical Progress in AUKUS Partnership Australia’s
waterways. acquisition of nuclear-powered submarines remains

74
 State of the World: Emerging Trends and Way Forward

on schedule for the late 2030s. Collaboration EU’s Global Gateway Initiative Announced 16
expanded to include artificial intelligence, flagship infrastructure and digital connectivity
cybersecurity, and quantum technologies. projects in May as an alternative to China’s Belt
and Road Initiative.
US-Philippines Defence Cooperation Completion
of four new military sites under the Enhanced Indo-Pacific Economic Framework for
Defence Cooperation Agreement (EDCA) by July Prosperity (IPEF) Signed the Agreement Relating
2024. to a Fair Economy in June, effective from October
12, 2024.
Increased joint patrols in the South China Sea to
counter rising tensions with China. Investments in Regional Infrastructure and
Clean Energy IPEF Clean Economy Investor
NATO’s Growing Engagement in Asia-Pacific
Forum identified $23 billion in clean energy
Strengthened ties with partners including Australia,
projects with participation from 22 US firms.
Japan, New Zealand, and South Korea.
Private equity firms KKR and Global Infrastructure
September proposal for a joint task force to address
Partners launched a $25 billion infrastructure
cybersecurity threats and hybrid warfare.
investment initiative in June, targeting energy,
transportation, and digital infrastructure projects.
Enhanced Maritime Law Enforcement by
Regional Players Japan, South Korea, and Taiwan
initiated joint training, equipment transfers, and Prognosis for 2025
technical assistance in Southeast Asia to bolster
Enhanced Maritime Security Cooperation
coast guard capabilities and combat illegal
The Quad nations—Japan, the US, Australia, and
activities.
India—will hold their first joint coast guard training
Escalation of China’s Military Activities exercises in January, emphasising maritime
Intensified drills and patrols in the Taiwan Strait and security to address China’s expanding presence.
South China Sea, coupled with the militarisation of
artificial islands. In March, a separate joint exercise involving Japan,
the US, and the Philippines will be conducted,
Tensions peaked in April and October, drawing featuring Quad personnel aboard US Coast
strong responses from regional and global actors. Guard patrol ships. These activities align with a
regional framework established by Quad leaders in
Economic Initiatives and Collaborations September 2024.

Indo-Pacific Business Forum (IPBF) Hosted by Progress in Satellite Surveillance Initiative The
the US and the Philippines in May 2024, focusing Quad’s proposed satellite initiative is expected
on innovation and investment. to take shape in 2025, strengthening regional

75
 State of the World: Emerging Trends and Way Forward

capabilities in surveillance, communication, and defence partnerships and expanded security

disaster management. cooperation within the Quad framework.

Persistent US-China Rivalry China’s continued A notable milestone was the 2+2 foreign and defence
military activities in the South China Sea and its ministers’ meeting between India and Japan,
growing regional presence will remain contentious. held in August 2024 in Delhi, which highlighted
deepening defence ties and laid the foundation for
The US-China rivalry is set to intensify, with both closer collaboration within the Quad.
nations seeking to expand their influence through
military posturing, economic strategies, and Similarly, Prime Minister Narendra Modi’s visit
diplomatic engagements. to the United States in September 2024 further
solidified India’s defence relations with the
Addressing Non-Traditional Security US, with discussions focusing on joint defence
Challenges Climate change and cybersecurity initiatives, regional security issues, and countering
will feature prominently on the regional agenda. China’s growing influence in the Indo-Pacific.

Disaster relief and response efforts will be Policy Recommendations

prioritised, reflecting the region’s vulnerability to
natural disasters. Enhance Joint Military Exercises Expand
collaborative military drills with ASEAN, Quad
India, Japan, and Australia will continue leading nations, and Southeast Asian countries, focusing
initiatives to address these non-traditional security on maritime security, counterterrorism, and
concerns, fostering greater regional collaboration. humanitarian assistance operations. Establish
an India-ASEAN cybersecurity framework to
Implications for India facilitate intelligence sharing and address regional
cyber threats.
India’s role in maritime security within the Quad
has become increasingly significant, marked by Accelerate Key Infrastructure Projects Prioritise
coordinated naval exercises and efforts to strengthen the completion of strategic initiatives like the
maritime domain awareness. Additionally, the 2024 India-Myanmar-Thailand Highway and port
Quad Leaders’ Summit proposed a collaborative developments, ensuring alignment with regional
initiative to develop a Quad satellite, built through connectivity objectives.
a partnership between the US and India, to enhance
space-based surveillance and support regional Strengthen Naval Modernisation Increase
disaster management. investments in naval accretions and conduct joint
maritime patrols with ASEAN and Quad forces to
India’s strategic position in the Indo-Pacific was secure vital shipping lanes and address threats such
further reinforced in 2024 through strengthened as piracy.

76
 State of the World: Emerging Trends and Way Forward

Foster Digital Infrastructure Development Lead U.S.-China rivalry. These nations sought to
a regional initiative to develop secure 5G networks, preserve their sovereignty while maintaining
improve data governance, and build capacity in balanced foreign relations.
digital technologies across Southeast Asia.
Economic performance in the region varied
Support Renewable Energy and Climate significantly. Vietnam achieved an impressive
Adaptation Provide technical and financial growth rate of 7.4 percent, its third-highest in five
assistance to ASEAN countries for renewable years, driven by strong exports and investment
energy projects and climate adaptation measures. inflows. Singapore also saw robust growth, with
Organise an Indo-Pacific Climate Resilience Forum a 5.4 percent increase, marking its best quarterly
to share best practices, promote collaboration, and performance since 2022. Thailand experienced a
encourage joint environmental initiatives. similar uptick in growth, supported by a recovery in
tourism. However, growth moderated in Indonesia,
Promote Cultural Exchanges Establish India- Malaysia, and the Philippines due to factors like
ASEAN cultural centres to deepen mutual weakened household consumption and declining
understanding and enhance India’s soft power exports. Indonesia’s growth slowed to 4.95 percent,
influence in the region. Malaysia’s to 5.3 percent, and the Philippines’ to
5.2 percent, signalling uneven economic recovery.
Encourage Innovation Partnerships Launch
a regional initiative to support innovation in AI, Despite these challenges, Southeast Asia remains a
blockchain, and fintech by fostering collaboration hub for foreign investment, infrastructure projects,
with ASEAN countries and nurturing startups in and burgeoning sectors such as technology
digital economies. and renewable energy. The region’s economic
trajectory continues to be influenced by global
Southeast Asia trends, including the U.S. presidential election and
its potential impact on trade policies. A protectionist
Annual Review U.S. administration could pose significant risks to
Southeast Asian exports, particularly in textiles,
The year 2024 was marked by notable political and electronics, and agriculture. Additionally, the
economic developments across Southeast Asia. region’s heavy reliance on global supply chains
National elections in Indonesia, Cambodia, and remains vulnerable to disruptions stemming from
Thailand resulted in regime changes and policy geopolitical tensions.
shifts. While specific priorities differed, common
goals included fostering political stability, ensuring Regional security also came under focus as
social order, and promoting economic recovery in China’s assertive actions in the South China Sea
the post-pandemic era. Another shared focus was intensified. The Philippines adopted a strong
navigating the increasingly complex geopolitical stance, modernising its military and enhancing its
environment, especially in light of the escalating maritime laws to safeguard its territorial integrity.

77
 State of the World: Emerging Trends and Way Forward

Vietnam pursued a dual strategy of engaging regional security and promoting freedom of
China economically while diversifying its trade navigation in accordance with international law.
and security partnerships with the U.S. and other
regional powers. Joint military exercises and India’s economic partnerships also expanded.
maritime security collaborations underscored the Agreements with Malaysia to link payment systems,
region’s efforts to maintain stability amidst these collaborations with Vietnam on semiconductor
tensions. production, and discussions on enhancing trade
under the ASEAN-India Free Trade Agreement
Implications for India (AITIGA) reflected India’s drive to strengthen
its economic footprint. Furthermore, cultural
India’s strategic and economic interests in and educational exchanges, such as those with
Southeast Asia gained renewed momentum in Laos and Cambodia, showcased India’s holistic
2024. At the 21st ASEAN-India Summit in Laos, approach to building long-term relationships in
the decade-long success of India’s Act East the region. These developments align with India’s
Policy was celebrated, with ASEAN-India trade Indo-Pacific vision and its efforts to counterbalance
surpassing $130 billion. The summit reaffirmed the
China’s growing influence.
Comprehensive Strategic Partnership, emphasising
connectivity and resilience. India’s Prime Minister
Prognosis for 2025
Narendra Modi unveiled a 10-point plan to deepen
cooperation in areas such as digital trade, supply
Southeast Asia’s economic and political landscape
chain resilience, and cultural exchange. The
in 2025 is likely to be shaped by several key trends.
declaration of 2025 as the ASEAN-India Year of
Economically, the region is expected to sustain
Tourism further underscored the importance of
moderate growth, driven by recovering tourism,
fostering people-to-people ties.
robust FDI inflows, and the ongoing diversification
of supply chains under the “China+1” strategy.
India’s engagements with individual Southeast
Countries like Vietnam and the Philippines
Asian nations also intensified. During high-level
visits, India strengthened its defence ties with are poised to benefit as global companies shift
Brunei, Singapore, and the Philippines, while production to the region. However, uncertainties in
expanding cooperation in sectors like digital U.S. trade policy and the potential for heightened
technology and space research. Notably, India’s U.S.-China tensions could disrupt trade flows and
provision of BRAHMOS missiles to the Philippines investment patterns.
marked a significant boost in bilateral defence
collaboration, demonstrating India’s growing role Geopolitically, the South China Sea will remain a
as a security provider in the region. Similarly, flashpoint, with continued Chinese assertiveness
India’s active participation in maritime dialogues, challenging regional stability. Southeast Asian
such as the India-Philippines Maritime Dialogue, nations will likely enhance their defence capabilities
highlighted its commitment to safeguarding and strengthen alliances to counter these threats.

78
 State of the World: Emerging Trends and Way Forward

The Philippines and Vietnam are expected to lead participate in ASEAN-centric regional value
efforts in maritime security, supported by the chains, leveraging its expertise in sectors like
U.S. and other like-minded partners. Meanwhile, information technology and renewable energy.
ASEAN’s centrality will be tested as member states
navigate these complex dynamics while striving On the geopolitical front, India must strengthen
for collective security and economic progress. its defence cooperation with Southeast Asian
nations. Increasing the frequency and complexity
For India, 2025 presents opportunities to deepen of joint military exercises and expanding
its ties with Southeast Asia. By leveraging its defence technology collaborations will enhance
strengths in technology, pharmaceuticals, and interoperability and build mutual trust. India could
defence manufacturing, India can position itself as also explore logistics support agreements with key
a key partner in the region’s economic and security ASEAN partners to facilitate its naval operations
frameworks. Additionally, India’s proactive and strengthen maritime security.
engagement in regional dialogues and its support
for ASEAN-led mechanisms will be critical in
Furthermore, India should continue to uphold the
promoting stability and fostering inclusive growth.
principles of freedom of navigation and overflight
in the South China Sea, advocating for adherence
Policy Recommendations
to international laws such as UNCLOS. Engaging
with ASEAN to address the Myanmar crisis
To enhance its partnerships with ASEAN, India
remains critical. India’s efforts to ensure stability
should prioritise a comprehensive review of the
along its 1,643 km shared border with Myanmar
AITIGA to address trade imbalances and improve
will not only promote regional peace but also
market access. This could involve reciprocal tariff
safeguard its own security interests. Finally, India
reductions, the removal of non-tariff barriers, and
must actively support ASEAN centrality and work
simplified rules of origin. Diversifying India’s
within existing regional frameworks to address
export portfolio to include high-value products like
shared challenges, ensuring its long-term strategic
pharmaceuticals, processed food, and engineering
presence in the region.
goods would further strengthen its economic ties
with ASEAN. Domestically, India must focus
on enhancing its competitiveness by improving East Asia
infrastructure, boosting productivity, and fostering
skill development.
Japan
Expediting the completion of key infrastructure
projects, such as the Trilateral Highway and the Annual Review
Kaladan Multi-Modal Transit Transport Corridor,
will be crucial in enhancing physical and digital In 2024, Japan encountered both domestic and
connectivity. Additionally, India should actively international challenges, starting with a January 1

79
 State of the World: Emerging Trends and Way Forward

earthquake in the Noto Peninsula. Prime Minister Seoul dynamic. With elections approaching,
Kishida announced in August that he would not seek Prime Minister Ishiba’s minority government will
a second term, and the October election resulted struggle to pass a contentious tax hike aimed at
in Japan’s first minority government since 1994. funding defence spending, while also managing
Kishida’s administration struggled with issues fiscal policies to address the growing national debt.
like defence spending and economic difficulties. Political support for the government may fluctuate
Japan hosted the Japan-Ukraine Conference for as it deals with these difficult issues.
Reconstruction in February, demonstrating long-
term support for Ukraine, and allocated 5 billion Economically, Japan will focus on technological
yen in Official Security Assistance (OSA) to six innovation, with a strong emphasis on the
countries, including Vietnam and Indonesia. semiconductor industry to secure supply chains and
enhance its leadership in AI and robotics. Labor
Relations with China worsened, highlighted by shortages, worsened by the aging population, will
airspace violations and provocative military actions, drive efforts to increase workforce participation,
though a November summit led to agreements on especially among women and seniors, and leverage
fisheries and Fukushima’s treated water. In April, automation to improve productivity. Amid these
challenges, delays in fully implementing defence
Japan and the US declared themselves “global
policies due to tax hikes may create uncertainty
partners,” with 70 new agreements covering
about Japan’s defence readiness.
defence and technology. Japan and the EU formed
a historic security partnership in November to
Implications for India
address rising regional tensions. The US-Japan-
Philippines trilateral defence group was established,
Japan’s emphasis on semiconductors, advanced
and Japan faced challenges in US relations after
manufacturing, and supply chain resilience offers
Donald Trump’s return.
India substantial opportunities to enhance their
technological and economic partnership.
Japan’s diplomacy with South Korea flourished,
with important summits until President Yoon’s Both nations share security concerns in the Indo-
December impeachment. In the technology sector, Pacific, with Japan’s defence strategies aligning
Japan launched a $4.8 billion semiconductor well with India’s regional goals. However, potential
investment in May. political shifts in Japan may necessitate proactive
efforts to sustain progress in areas like technology
Prognosis for 2025 and defence.

In 2025, Japan is likely to face complex geopolitical In 2024, India-Japan relations deepened across
and domestic challenges. As US-China tensions defence, economic, technological, and diplomatic
rise, Japan will need to carefully navigate its areas. A key moment was the India-Japan 2+2
position, particularly in stabilising relations with Ministerial Dialogue in February, where both
South Korea, potentially reshaping the Tokyo- countries discussed enhancing defence ties,

80
 State of the World: Emerging Trends and Way Forward

including joint military exercises, cybersecurity, Establish bilateral frameworks for secure
and counterterrorism. The Dharma Guardian 2024 supply chains in critical technologies such as
exercise focused on improving interoperability and semiconductors, rare earths, and clean energy.
counterterrorism capabilities. Develop partnerships in emerging areas like
quantum computing, artificial intelligence, and
On the economic front, collaboration expanded, 5G/6G technology.
particularly in infrastructure and technology.
A notable development was the June 2024 Enhance collaboration on maritime security,
agreement between Japan’s METI and India’s including sharing real-time information on the
MeitY, which underscored cooperation in AI, Indo-Pacific domain through initiatives like the
robotics, and quantum computing. However, the Quad.
Mumbai-Ahmedabad bullet train project faced
significant obstacles, including rising costs and Build upon existing dialogues to co-develop
delays stemming from land acquisition protests. satellite technologies and bolster cyber resilience.
Compounding these issues were delays in the Launch joint initiatives to address cyber threats
delivery of Shinkansen trains from Japan and and promote secure digital infrastructure.
logistical challenges related to tunnel and bridge
construction. These setbacks could potentially Update the 2008 Joint Declaration on Security
strain diplomatic relations between the two Cooperation to include contemporary challenges
countries. like cyber threats, economic security, hybrid
warfare, and space security.
Diplomatically, Prime Ministers Modi and Kishida
reaffirmed their strategic partnership at a July
summit, emphasising cybersecurity, maritime South Korea
security, and defence technology. They also
committed to strengthening the Quad framework. Annual Review
Both countries reinforced their dedication to a free,
open Indo-Pacific at the ASEAN-Japan Summit In 2024, South Korea experienced notable
in October and pledged to deepen collaboration political, technological, and foreign policy
within multilateral frameworks like the Quad. developments. Domestically, political unrest
followed President Yoon Suk Yeol’s attempted
Policy Recommendations martial law declaration in December, leading to
protests and his impeachment on December 14.
Accelerate co-development of defence President Han Duck-Soo temporarily took office.
technologies like the Unified Complex Radio On the technology front, South Korea advanced in
Antenna (UNICORN) and unmanned systems, AI, biotechnology, and semiconductors, with Yoon
while expanding cooperation in ship maintenance fostering a pro-investment climate. The government
and advanced robotics. also allocated a $4.8 billion Official Development

81
 State of the World: Emerging Trends and Way Forward

Assistance (ODA) budget for humanitarian and aiming to restore public trust and strengthen
infrastructure projects. democratic institutions. This phase is expected to
lay the groundwork for more effective governance
In foreign policy, South Korea strengthened and policy execution.
its alliances, with the US-Republic of Korea
Foreign and Defence Ministerial Meeting in Economically, South Korea is projecting a 1.8
January reaffirming mutual defence commitments. percent growth rate for 2025, down from 2.1
South Korea deepened military ties with NATO, percent in the previous year, reflecting challenges
increasing arms sales to Europe and participating like global trade volatility and domestic political
in joint drills. It also conducted joint exercises with turmoil. To address these issues, the government
the US and Japan, such as “Keen Sword,” focusing plans to mobilise 18 trillion KRW through expanded
on North Korean threats. fund projects, increased public sector investments,
and enhanced private sector financing.
A major diplomatic breakthrough occurred at
the August Camp David summit, where South In technology, South Korea is prioritising
Korea, Japan, and the US agreed to enhance advancements in AI, cybersecurity, data analytics,
trilateral defence cooperation, including real-time blockchain, and cloud computing, backed by an
intelligence sharing and joint military exercises. R&D budget of 24.8 trillion KRW to solidify its
This marked a significant improvement in South position as a leader in these fields.
Korea-Japan relations.
On the foreign policy front, South Korea is
Meanwhile, North Korea’s growing cooperation
strengthening security ties with regional partners.
with Russia raised regional security concerns. A
Notably, Japanese Foreign Minister Takeshi Iwaya
September meeting between Kim Jong-un and
visited Seoul in January 2025 to discuss enhancing
Vladimir Putin discussed military collaboration,
trilateral security cooperation with the United
including missile and satellite technology
States, particularly in response to China’s growing
exchanges. In response, South Korea bolstered
regional influence.
its defence efforts and strengthened trilateral
cooperation with the US and Japan.
Implications for India
Prognosis for 2025
South Korea’s advancements in AI,
In 2025, South Korea is expected to undergo semiconductors, and biotechnology, supported by
political stabilisation, technological progress, a robust R&D budget, align with India’s priorities
and a shift in foreign policy. Following President for technological innovation. This creates potential
Yoon Suk Yeol’s impeachment in December 2024, for joint ventures, technology transfer, and research
Acting President Choi Sang-mok will guide the partnerships. The strengthening of trilateral
couwhat cane ntry through a transitional period, security ties among South Korea, Japan, and the

82
 State of the World: Emerging Trends and Way Forward

US offers India an opportunity to collaborate on Upgrade the Comprehensive Economic Partnership

regional security issues. Agreement (CEPA) with a goal of achieving a $50
billion trade target by 2030.
In 2024, India and South Korea made significant
progress in strengthening their bilateral relations, Expand cooperation on initiatives like ‘Make in
particularly in trade, defence, and technology. India,’ ‘Skill India,’ ‘Smart Cities,’ and ‘Startup
A key milestone was External Affairs Minister India,’ while utilising South Korea’s Economic
Dr. S. Jaishankar’s visit to Seoul in March 2024,
Development Cooperation Fund for infrastructure
where he co-chaired the 10th India–South Korea
projects.
Joint Commission Meeting with South Korean
Foreign Minister Cho Tae-yul. This was the first
Strengthen military exchanges, joint training, and
such meeting in nearly six years and focused on
experience-sharing to enhance regional security
enhancing cooperation in trade, technology, and
and stability.
people-to-people exchanges.

In March 2024, the three countries held their Collaborate on research and development in
inaugural trilateral technology dialogue, exploring innovative technologies, including defence,
collaboration in semiconductors, biotechnology, robotics, and renewable energy.
space, AI, and quantum technology. Later, in
November 2024, the India-Korea Business Strengthen people-to-people ties through youth
Partnership Forum in New Delhi brought together exchange programs, academic collaborations, and
about 500 participants to discuss trade and new cultural initiatives such as upgrading the Queen
collaboration areas. Suriratna monument in Ayodhya.

Also in November 2024, at the ASEAN Defence Focus on enhancing cooperation in critical
Ministers’ Meeting in Laos, India’s Defence technologies like AI, semiconductors, and green
Minister Rajnath Singh and South Korean Defence hydrogen, leveraging the complementary strengths
Minister Kim Yong Hyun met to strengthen of both countries.
defence ties. These events underscored the growing
partnership between India and South Korea,
focusing on mutual benefits in trade, technology,
Europe
and defence in the Indo-Pacific region.
Annual Review
Policy Recommendations
Amid significant geopolitical and geoeconomic
Leverage South Korea’s technological expertise changes, India and Europe must deepen their
and manufacturing prowess alongside India’s cooperation on trade and adopt comprehensive
growing economy to foster mutual economic strategies to address global challenges, thereby
growth. contributing to a sustainable world order.

83
 State of the World: Emerging Trends and Way Forward

European Union strong focus on the European Green Deal to

achieve climate neutrality by 2050. The phased
Geopolitical Realignment and NATO Solidarity implementation of the Carbon Border Adjustment
The ongoing conflict in Ukraine has significantly Mechanism (CBAM) aimed to curb carbon
shaped the EU’s policies, reinforcing its alignment leakage and incentivise global adoption of cleaner
with NATO and the United States while seeking technologies. At COP29, the EU played a pivotal
greater strategic autonomy. Europe views itself role, advocating for stronger global commitments
as particularly vulnerable, “caught between two and enhancing climate resilience initiatives.
wars,” as the two-year-long conflict in Ukraine
persists. Humanitarian support for Ukraine has Strategic Engagement in the Indo-Pacific
remained steadfast, with financial aid surpassing The EU expanded its Indo-Pacific strategy to
€100 billion since 2022 and increased arms foster stability, prosperity, and adherence to the
deliveries underscoring Europe’s commitment. rules-based international order. Key measures
included bolstering partnerships, leveraging the
Dependence on U.S. Leadership Over the Global Gateway Initiative to counter China’s
last decade, Europe has seen a decline in its Belt and Road Initiative, and enhancing military
military, economic, and technological capacities collaboration. Talks on the India-EU Free Trade
relative to the United States. A lack of strategic Agreement accelerated in 2024, with progress
coherence and political unity has further amplified marked by the September negotiations, signalling
Washington’s role as Europe’s security guarantor. closer economic and strategic ties with India.
However, this dependence could face challenges
with the anticipated second term of Donald Trump, Germany Germany has shown reluctance to take on
potentially reshaping transatlantic relations. a greater share of regional security responsibilities
or significantly reduce its energy reliance on
Economic Recovery Amid Challenges The EU Russia. Regarding the Gaza conflict, Germany
narrowly avoided a severe recession in 2024, with has been Israel’s largest European arms supplier,
a modest GDP growth rate of 1.1 percent across accounting for 30 percent of Israel’s arms imports
member states. Investments in renewable energy from 2019 to 2023. In the past year alone, German
and the green transition, especially in solar and arms exports to Israel surged tenfold, increasing
wind projects in southern Europe, supported this from €32.3 million ($35 million) to €326.5 million
growth. Despite a decline from 2023 peaks, inflation ($354 million), with most export licenses issued
remained elevated at 4-5 percent, prompting the after the war began.
European Central Bank to balance cautious interest
rate policies to sustain growth without triggering The collapse of Germany’s “traffic-light” coalition
economic overheating. government highlighted political fragmentation
driven by economic challenges and instability
Leadership in Climate Action Europe continued within the coalition. Now in its second year of
advancing its climate agenda in 2024, with a recession, Germany faces declining business

84
 State of the World: Emerging Trends and Way Forward

activity, a struggling car industry, and a drop in third model of leadership is emerging in Poland,
its Purchasing Managers’ Index (PMI) from 48.4 EU’s fifth largest economy. Given the size of the
in August to 47.2 in September—a seven-month country and its economic dynamism, the potential
low. Despite these setbacks, Germany remains for Poland to “punch above its weight” has been
committed to its green energy transition and there for quite some time now. Warsaw is launching
digital transformation, investing in technology and a major rearmament that will make Poland one
innovation to drive long-term growth. of Europe’s leading military powers. As Poland
spends more than 4 percent of its GDP on defence,
France experienced a year shaped by political its defence budget has increased by 75 percent
tensions and ongoing economic reforms. Amid over the previous year. Warsaw has also allocated
political uncertainties, the country emphasised the 0.7 percent of its GDP to Ukraine and has spent
need for a more autonomous geopolitical direction more than $24 billion on the one million Ukrainian
to address Europe’s security concerns. While refugees that the country has taken in. As the Polish
the French economy posted moderate growth, government signs deals with domestic companies
with GDP increasing by 1.2 percent in 2024, its to manufacture explosives in November 2024,
composite PMI fell sharply to an eight-month low Poland seems to have a clear and actionable vision
of 47.4 in September, down from 53.1 in August for future deterrence against Russia, exemplifying
and below the expected 50.6 threshold. Polish ambitions for a leadership role in the bloc.

France maintained its prominent global role on

Italy Italy’s political landscape underlined a focus
environmental and energy issues, prioritising
on fiscal stability and economic recovery, largely
nuclear energy as a cornerstone of its strategy. This
driven by manufacturing, exports, and EU-funded
focus also positioned France as a key player in the
infrastructure projects. Italy continued to balance
EU’s leadership on climate change, particularly
domestic reforms with maintaining EU alignment.
during the ongoing European energy crisis.
The government also prioritised immigration
reforms, tightening border controls while working
Spain Elections in Spain has resulted in a shift
on integration measures for refugees.
towards more centrist coalitions, countering the
far-right momentum seen in 2023. The government
United Kingdom The new Labour Government
has focussed on implementing economic reforms
in the United Kingdom sought to rebuild and
for 2 percent GDP growth, supported by EU
strengthen policy ties with the European Union.
recovery funds. Spain also advanced its climate
However, the country continued to face political
agenda, with ambitious renewable energy targets,
instability stemming from post-Brexit challenges
particularly in solar and wind power, to meet the
and sluggish economic growth. Efforts centred on
EU 2030 carbon reduction goals.
reducing national debt while addressing inflation
Poland Poland is emerging as a new power broker and a persistent cost-of-living crisis. In foreign
of the EU. With a failing Franco-German motor, a policy, the UK maintained its emphasis on global

85
 State of the World: Emerging Trends and Way Forward

leadership, prioritising strong alliances with the cooperative projects with European countries
United States and Commonwealth nations. looking for stable partners. In this context, the India-
EU FTA emerges as a pivotal aspect of bilateral
Hungary Hungary has positioned itself as an relations. Negotiations advanced significantly,
outlier within the EU, opposing sanctions on with both sides making concessions on market
Russia and maintaining its energy dependence on access and intellectual property rights, aiming to
Moscow. As a landlocked nation heavily reliant finalise the FTA by early 2025.
on Russian gas and oil, Hungary has consistently
resisted EU measures to support Ukraine against The resumption and acceleration of FTA
Russian military aggression. This stance runs negotiations indicated potential economic
counter to the Copenhagen Criteria, which benefits for India, including enhanced access to
require stable institutions, a functioning market European markets and trade diversification. The
economy, and adherence to EU obligations for agreement would also provide a boost to Prime
membership. Moreover, Budapest has obstructed Minister Narendra Modi’s initiative to promote
the disbursement of Kyiv-bound assistance under Atmanirbharta (self-reliance) in defence and
the European Peace Facility (EPF) for over a year, strengthen India’s position as a regional leader
causing growing frustration among other Member and a global economic power. The push for
States. defence indigenisation found a receptive partner
in European nations like France, which sought to
Implications for India deepen their roles in India’s defence manufacturing
landscape. However, the EU’s CBAM policy,
Europe’s alignment with NATO and the US on the intended to reduce carbon leakage, posed
Ukraine conflict reinforced transatlantic unity. For challenges and opportunities for Indian exporters.
India, this meant navigating its strategic autonomy Compliance with EU environmental standards
while maintaining balanced relations with both the would necessitate greener practices in Indian
EU and Russia. The differing European and US industries, but could also enhance competitiveness
positions on the Gaza conflict impacted India’s for sustainable products in European markets.
diplomacy, highlighting the complex terrain of
maintaining bilateral relations with both the EU In the sector of energy cooperation, the EU’s
and Israel while considering humanitarian aspects. emphasis on renewable energy complemented
Europe’s calls for peace and support for a two-state India’s ambitious target to achieve 500 GW of
solution resonated with India’s broader foreign renewable energy capacity by 2030. European
policy principles. investments in Indian solar and green hydrogen
projects exceeded €2 billion in 2024, enhancing
The EU’s reduced dependency on Russian energy India’s transition to cleaner energy sources.
sources spurred diversification efforts, creating However, at the recent COP29 Summit in Baku,
potential for India to engage in energy trade and India opposed EU’s plan of imposing unilateral

86
 State of the World: Emerging Trends and Way Forward

trade barriers in the form of CBAM on carbon- The agreement is poised to bolster Prime Minister
intensive goods. This results in shifting of Modi’s Atmanirbharta initiative in defence,
the financial burden of mitigation activities enhancing India’s regional and global economic
to developing nations, which has been openly stature. European nations, notably France, have
opposed by India. shown interest in participating in India’s defence
manufacturing efforts, complementing its push for
Implications for India defence indigenisation.

Reinforced Transatlantic Unity Europe’s Challenges and Opportunities in Climate and

alignment with NATO and the US on the Ukraine Energy The EU’s Carbon Border Adjustment
conflict has strengthened transatlantic unity. For Mechanism (CBAM), designed to curb carbon
India, this underscores the importance of balancing leakage, presents both hurdles and prospects for
its strategic autonomy while maintaining ties with Indian exporters. While compliance with EU
both the EU and Russia. Diverging European environmental standards will demand greener
and US positions on the Gaza conflict further practices, it could also enhance the competitiveness
complicated India’s diplomacy, requiring careful of sustainable Indian products in Europe.
navigation to sustain relations with the EU and
Israel while addressing humanitarian concerns. Advancing Renewable Energy Cooperation The
Europe’s advocacy for peace and a two-state EU’s emphasis on renewable energy aligns with
solution aligned with India’s broader foreign India’s ambitious target of 500 GW renewable
policy principles. energy capacity by 2030. European investments in
Indian solar and green hydrogen projects exceeded
Energy Diversification and Trade Opportunities €2 billion in 2024, accelerating India’s green
The EU’s move to reduce dependence on Russian transition. However, at COP29 in Baku, India
energy has opened avenues for diversification, opposed the EU’s unilateral CBAM measures,
presenting India with opportunities for energy citing concerns over shifting the financial burden
trade and collaborative projects. This context has of mitigation to developing nations, which remains
elevated the India-EU Free Trade Agreement (FTA) a contentious issue.
as a cornerstone of bilateral relations. Significant
progress in negotiations, including concessions on Prognosis for 2025
market access and intellectual property rights, aims
for FTA finalisation by early 2025. Balancing Transatlantic Ties and Strategic
Autonomy In 2025, the EU will strive to balance
Economic and Defence Collaboration The its transatlantic relationship with the US, especially
resumption of FTA talks signals potential economic during Donald Trump’s second term, while
advantages for India, such as expanded access to asserting greater strategic autonomy. Building a
European markets and diversified trade options. more balanced alliance requires Europe to enhance

87
 State of the World: Emerging Trends and Way Forward

its independent capacity to support Ukraine sustainable development.

through military, economic, security, and energy
assistance. Policy Recommendations

Upholding Normative Values in Global Crises Collaborative Initiatives in Clean Energy As

As a normative power rooted in democracy, rule of Europe prioritises renewable energy, India should
law, and human rights, the EU has an opportunity collaborate on clean energy projects such as solar,
to reaffirm its credibility by addressing the Gaza wind, and hydrogen production. This partnership
crisis through these principles. Greater regional will not only promote energy security but also
engagement, including partnerships with local help mitigate challenges like the EU’s Carbon
actors to convene a peace conference, is vital for Border Adjustment Mechanism (CBAM). By
fostering a sovereign Palestinian state that ensures investing in green technologies, India can enhance
dignity and security in the region. the competitiveness of its industries in European
markets.
Sustainability-Driven Economic Policies
The EU’s focus on sustainability in 2025 will Advancing Trade Relations and the India-EU
significantly influence global supply chains, FTA India must ensure the smooth conclusion
presenting challenges and opportunities for of negotiations for the India-EU Free Trade
Indian industries aligning with EU standards. The Agreement (FTA), minimising compliance barriers
extension of the EU’s Digital Services Act and for Indian exporters while securing favourable
related regulations will impact Indian IT firms, terms for both parties. The UK-India FTA should
emphasising the need for compliance with new also be revitalised and expedited in 2025, with a
data protection and privacy norms. Encouraging focus on strengthening bilateral trade relations and
public-private partnerships and investments in cooperation in defence and technology sectors.
green technologies can help Indian industries adapt Special attention should be given to sectors that
to stringent EU environmental regulations. align with the EU’s sustainability goals.

Strengthening India-EU Relations The EU is Multilateral Approaches to Global Challenges

expected to deepen its partnerships with global India should work with the EU on global
actors, including India. The anticipated conclusion challenges such as climate change, human rights,
of the India-EU FTA in 2025 could unlock and international security, reinforcing its role as a
significant trade potential, granting Indian goods responsible global actor. Together, India and the
and services greater access to European markets EU can advocate for multilateral solutions to these
while attracting European investments and expertise pressing issues, contributing to a more stable and
into Indian sectors. Clean energy collaborations sustainable world order.
could further enhance Green Partnerships between
India and various European nations, bolstering

88
 State of the World: Emerging Trends and Way Forward

Africa • Tunisia: Controversial President Kais Saied

secured a second term amid international
Annual Review criticism for his authoritarian measures.

Given the diverse nature of the India-Africa • Democratic Republic of Congo (DRC):
relationship, it is crucial to address the gaps in President Felix Tshisekedi’s re-election
India’s engagement with Africa. There is a need faced accusations of fraud and violence.
to explore new opportunities for collaboration in
• Conflict, Security, and Humanitarian
2025.
Challenges Africa faced significant security
Enhanced Diplomatic Engagement by India crises, including:
In 2024, India deepened its diplomatic ties with
• Sudan: Civil war displaced over 11
Africa through high-level visits by key leaders.
million people, creating one of the largest
Notable visits included External Affairs Minister
displacement crises globally.
S. Jaishankar’s meetings in Uganda, Nigeria, and
Mauritius, focusing on renewables, healthcare, and • Mali: Instability worsened after the expulsion
security. President Droupadi Murmu embarked of UN peacekeepers.
on a multi-nation African tour, strengthening ties
in trade, defence, and technology. Prime Minister • Somalia: The country struggled with Al-
Narendra Modi’s visit to Nigeria after 17 years Shabab insurgency and severe flooding.
underscored India’s commitment to addressing
global and regional challenges, especially amidst • Sahel Region and Others: Rampant
geopolitical tensions. violence, disease, and hunger led to
widespread humanitarian crises in Ethiopia,
Political Shifts Across Africa Elections across CAR, and beyond.
Africa highlighted significant political changes:
Economic Developments and Multilateral
• South Africa: The African National Congress Engagement Africa’s real GDP growth slowed
(ANC) lost its parliamentary majority for the to 3.1 percent in 2023 due to conflicts and global
first time since 1994, necessitating a coalition tensions but is projected to rebound to 3.7 percent
government. in 2024. Key developments included:

• Botswana: The ruling Botswana Democratic • G-20 Membership: The African Union (AU)
Party (BDP) was ousted by the Umbrella for gained a seat, amplifying Africa’s voice on
Democratic Change (UDC). global economic policies.

• Mauritius: The Opposition Coalition won • BRICS Expansion: Ethiopia and Egypt
a sweeping majority, replacing the Lepep joined, diversifying Africa’s economic
alliance. aspirations.

89
 State of the World: Emerging Trends and Way Forward

• Regional Changes: Burkina Faso, Mali, and India’s commitment to Africa, as emphasised by
Niger left ECOWAS, heightening instability, Prime Minister Modi in his 2018 address to the
while Somalia gained full membership in the Ugandan Parliament. Such visits often result in
East African Community (EAC), enhancing agreements across defence, energy, and agriculture
trade and investment opportunities. sectors. The signing of a memorandum of
understanding between India’s Chief of Defence
These developments underscore Africa’s resilience Staff and Algeria’s Chief of Staff signifies a
and its pivotal role in shaping global economic and milestone in defence collaboration, with long-term
political dynamics. potential in multiple sectors.

Implications for India Prognosis for 2025

Political Transitions Impact Economic Strengthening Diplomatic Engagement Africa

Partnerships Political stability in Africa directly remains a cornerstone of India’s foreign policy,
influences economic and security relations with with ongoing high-level visits by leaders from
India. For instance, Botswana’s smooth democratic both regions. These engagements are expected to
transition fosters opportunities for collaboration intensify in 2025, potentially culminating in the
in mining, food security, tourism, and renewable 4th India-Africa Forum Summit (IAFS), further
energy, strengthening bilateral ties. solidifying India’s role in Africa’s development
trajectory.
Security Challenges and Economic Disruption
The persistence of terrorism and instability in Addressing Security Challenges
regions like East Africa adversely affects Indian
trade and investment. Countries such as Kenya, • Maritime Security: The IOR, a hub of global
Ethiopia, and Tanzania, which are among Africa’s trade, is critical for regional stability. India
fastest-growing economies, face disruptions in has signed defence agreements with Kenya
their trade ties with India due to regional insecurity. and South Africa and plans to extend similar
collaborations with other African nations to
Shared Security Concerns in the Indian Ocean bolster peace and security.
Region (IOR) Both India and Africa contend with
security threats in the IOR, particularly piracy in • Countering Terrorism: With investments
the Gulf of Aden and off Somalia’s coast. These in West African oil reserves, combating the
challenges disrupt economic stability and regional resurgence of Islamist groups in Africa will
security, with far-reaching consequences for be a key priority for India, given the region’s
bilateral trade and maritime safety. strategic significance.

Diplomatic Engagement and Strategic Diversifying Cooperation India will likely expand
Agreements High-level diplomatic visits underline its engagement with Africa into emerging sectors

90
 State of the World: Emerging Trends and Way Forward

such as critical minerals, the green economy, and for African membership in groups like the G20,
clean energy to address global challenges. Africa’s BRICS, and the International Solar Alliance
abundant reserves of critical minerals—including (ISA) has been well-received and significantly
cobalt (48.1 percent), manganese (47.7 percent), enhances ties between the two regions.
and natural graphite (21.6 percent)—offer immense
potential for collaboration. India is expected to Expansion of Defence Engagement Defence
secure access to these resources, facilitating its collaborations should be broadened with increased
transition to green and clean technologies. funding and lines of credit for various African
nations. Enhanced joint maritime exercises
Countering China’s Influence India faces by the Indian Navy, particularly in regions like
the strategic challenge of countering China’s West Africa, should also be prioritised to address
deepening ties with Africa, driven by initiatives security concerns.
like the Belt and Road Initiative (BRI) and the
Forum on China-Africa Cooperation (FOCAC). Cooperation in Food Security and Agriculture
Positioning itself as a reliable and equitable India should work alongside African nations to
partner will be central to India’s efforts to balance bolster food security and agricultural development.
this influence and strengthen its partnership with Initiatives like the International Crops Research
African nations. Institute for the Semi-Arid Tropics (ICRISAT)
and climate-resilient agricultural infrastructure can
Policy Recommendations drive significant transformation in this sector.

Given the diverse nature of India-Africa relations Development of Digital Infrastructure

and the evolving global landscape, it is essential Enhancing digital infrastructure is another
to explore new avenues for collaboration while area for collaboration. Projects like the Pan
upholding values of mutual respect and solidarity. African e-Network Project (PANeP) can
ensure widespread internet connectivity, while
Enhanced Political and Diplomatic Engagement partnerships in the fintech sector can foster
To fortify bilateral ties, India must increase its innovation and development.
political and diplomatic outreach to Africa. The
high-level visits from Indian leaders in 2024 Strengthening Healthcare Ties India and Africa
should be matched by similar engagements from have a robust healthcare partnership, exemplified
African leaders, emphasising the importance of the by the distribution of one million vaccines to 17
4th India-Africa Forum Summit as a pivotal step African countries and an additional 15 million
in strengthening relations. vaccines under the COVAX initiative. Continued
initiatives, such as e-Arogya Bharti (e-VaB)
Multilateral Cooperation Continued focus on and Vaccine Maitri, will further solidify this
multilateral cooperation is vital. India’s advocacy relationship.

91
 State of the World: Emerging Trends and Way Forward

Collaboration on Green Economy Initiatives trade, environmental protection, and migration

Both India and Africa advocate for a green economy, management.
presenting opportunities for collaboration in areas
like clean energy, electric vehicles, smart cities, A notable trend was the rising influence of China,
and green hydrogen for a sustainable future. reflected in increased trade and investment

Partnership in Critical Minerals With Africa partnerships. However, this prompted debates
possessing the largest reserves of critical minerals, over dependency and sovereignty. Meanwhile, the
India should partner with African mining companies United States sought to counterbalance China’s
to secure a steady supply of these essential influence by deepening ties with key allies like
resources. Formal agreements in resource-rich Brazil and Mexico.
countries like DRC, Gabon, Zambia, and South
Africa would enhance this collaboration. Climate change remained a pressing concern, with
extreme weather events highlighting the need for
Educational Initiatives Following the resilience and adaptation strategies. Countries
commitment made during the third India-Africa prioritised renewable energy projects and
Forum Summit to provide scholarships for biodiversity conservation, often with international
50,000 African students, India should continue to support.
strengthen its educational ties with Africa.
Developments in some of the Latin American
Space Sector Collaboration India and Africa can countries are listed below.
also cooperate in the space sector, establishing
partnerships between India’s ISRO and African Brazil: A Year of Balancing Challenges Brazil,
agencies in technology sharing, satellite capacity, the largest economy in Latin America, experienced
and related areas. a year of mixed fortunes. Politically, President
Luiz Inácio Lula da Silva worked to consolidate a
Latin America progressive agenda amidst a polarised environment.
Social welfare programmes aimed at reducing
Annual Review inequality made progress, though Congressional
divisions hampered key reforms.
Regional Trends
Internationally, Brazil emphasised South-South
Across the region, Latin America faced shared cooperation as a BRICS member and secured
challenges, including economic inequality, increased commitments to the Amazon Fund for
climate change, and governance issues. Regional combating deforestation. Economically, moderate
organisations like CELAC and the Pacific Alliance growth of 2.5 percent was driven by commodity
worked to strengthen cooperation, particularly in exports and domestic consumption, though

92
 State of the World: Emerging Trends and Way Forward

inflation and high-interest rates posed challenges. On the global stage, Mexico played a pivotal
Infrastructure projects under the “Next Generation role in the United Nations and regional forums,
Brazil” programme aimed to boost foreign advocating for migration reforms and climate
investment. action. Relations with the United States remained
central, with cooperation on trade and border
In defence, Brazil focused on naval modernisation, security continuing despite occasional tensions
particularly its submarine programme, while over immigration policies.
enhancing border security and regional cooperation.
Economically, Mexico benefited from nearshoring
Argentina: Grappling with Economic Turmoil trends, with multinational companies relocating
Navigating an ongoing economic crisis, President supply chains closer to the U.S. market. GDP
Javier Milei’s administration implemented radical growth reached 3 percent, supported by strong
economic measures, including the dollarisation of industrial output and remittances. However,
the economy and significant reductions in public security challenges, particularly linked to organised
spending. While these steps aimed to stabilise crime, continued to undermine investor confidence.
inflation, they also sparked widespread protests and
social unrest due to their impact on public services. Colombia: Strides in Peace and Sustainability
Colombia’s 2024 was marked by efforts to
Argentina strengthened ties with the United States consolidate peace and drive sustainable dev-
and Europe, seeking financial support and trade elopment. President Gustavo Petro’s administration
opportunities. Additionally, its relationship with advanced negotiations with remaining armed
China deepened, marked by increased exports of groups, achieving significant ceasefire
agricultural products and Chinese investments in agreements. These efforts were complemented by
infrastructure. comprehensive rural development programmes
aimed at addressing the root causes of conflict.
Despite economic struggles, Argentina maintained
its commitment to the peaceful resolution of Internationally, Colombia strengthened its role as
territorial disputes, including its claims over the a leader in environmental diplomacy, spearheading
Falkland Islands. initiatives to protect the Amazon basin and mitigate
climate change. Partnerships with European
Mexico: Balancing Domestic and International countries and multilateral organisations provided
Priorities Mexico concentrated on domestic funding and technical expertise for these projects.
reforms while navigating complex international
relationships. The government expanded its Economic performance was steady, with growth at
flagship social programmes, targeting education 2.8 percent, driven by a rebound in oil exports and
and healthcare, and pursued controversial energy investments in renewable energy. The government’s
policies prioritising state-owned enterprises. focus on green transition attracted international

93
 State of the World: Emerging Trends and Way Forward

investors, though challenges remained in achieving historical challenges that India has worked to avoid
fiscal balance. through its monetary policies.

Chile: Navigating Political and Economic Climate and Environment Implications Brazil’s
Reforms In Chile, President Gabriel Boric faced efforts to combat Amazon deforestation have global
a critical year in advancing his progressive reform implications for climate change, an issue of critical
agenda. Constitutional reform efforts dominated the importance to India given its own vulnerability
political landscape, with the public voting on a new to climate impacts. Both countries are balancing
draft constitution aimed at addressing inequalities environmental protection with development needs.
and environmental protection. While contentious
debates emerged, the process underscored Chile’s Economic and Trade Implications India’s
commitment to democratic governance. push for domestic EV manufacturing and battery
production depends heavily on securing lithium
Economically, Chile benefited from stable copper supplies. The developments in the Lithium Triangle
prices and diversification efforts in lithium present both opportunities and challenges— while
production, a critical resource for global energy there’s potential for securing supplies, India
transition. Growth stood at 3 percent, supported faces competition from China, which has already
by foreign investments and trade agreements. established strong presence in Latin American
However, inflation and public discontent over lithium mining. Indian companies need to move
social spending cuts posed challenges. quickly to secure long-term supply agreements.

Chile’s international relations focused on regional Mexico’s growing role in “nearshoring” and supply
integration and climate leadership. The country’s chain diversification offers lessons for India’s own
participation in COP29 highlighted its ambitious manufacturing ambitions. Both countries compete
targets for carbon neutrality and renewable energy for manufacturing investment as global companies
expansion. seek alternatives to China-centric supply chains.

Implications for India Strategic and Diplomatic Implications Brazil’s

support in BRICS and for India’s UN Security
Political and Economic Shifts Argentina’s Council aspirations strengthens India’s position
dramatic economic reforms under President Javier in global governance. The BRICS expansion and
Milei’s leadership have garnered significant Brazil’s role helps counter China’s influence within
attention. His radical “shock therapy” approach, the group, potentially giving India more strategic
including peso devaluation and major spending space.
cuts, could offer interesting lessons for emerging
economies like India. The Argentine peso’s The nearshoring trend in Mexico provides insights
struggles and hyperinflation concerns mirror some for India’s manufacturing strategy. As companies

94
 State of the World: Emerging Trends and Way Forward

seek to diversify from China, India needs to Key Risks

address infrastructure and ease of doing business to
compete effectively for manufacturing investment. • Growing social unrest in Argentina due to
austerity measures.
Energy Security Implications Venezuela’s
return to oil markets could help India diversify • Potential spillover effects into neighbouring
its energy sources beyond the Middle East. This economies.
could strengthen India’s bargaining position with
traditional suppliers and potentially lead to better • Uncertain political stability in several
pricing for crude imports. countries.

Brazil’s renewable energy expertise, particularly Opportunities for India:

in biofuels, aligns with India’s green energy goals.
There’s potential for technology transfer and joint • Critical Minerals Access: Negotiations
research in sustainable energy solutions. for lithium mining rights and processing
facilities are likely to intensify. India needs
Geopolitical Implications The region’s growing to move quickly as competition increases.
economic ties with China mean India needs to step
up its diplomatic and economic engagement to • Energy Markets: With Venezuela likely
maintain influence. Latin America could become continuing its gradual return to global
another arena for India-China strategic competition. markets, India could secure more favourable
energy deals.
The success of Latin American countries in
balancing relations with both US and China • Agricultural Trade: Potential for increased
provides a template for India’s own multi-aligned food security cooperation, especially given
foreign policy approach. climate uncertainties.

Prognosis for 2025 Trade and Investment

Economic Outlook Argentina’s economic • The nearshoring trend will likely accelerate
experiment under Milei will likely reach a critical in Mexico and Central America.
phase in 2025. The success or failure of his
radical reforms will influence market confidence • Brazil’s economy is expected to maintain
in unconventional economic policies, potentially moderate growth.
affecting how international investors view similar
reform proposals in other emerging markets, • Regional integration efforts may strengthen
including India. through Pacific Alliance and Mercosur.

95
 State of the World: Emerging Trends and Way Forward

Strategic Considerations for India implement local media strategies to strengthen ties
in Latin America.
• Need for proactive economic diplomacy to
secure critical mineral supplies. Institutional Strengthening Staff the Latin
America desk with language-proficient officers,
• Opportunity to expand presence in regional provide specialised training, partner with think
value chains. tanks, enhance intelligence gathering, and consult
the private sector.
• Potential for increased defence and
technology cooperation.
Economic Initiatives - Implementation Strategy

• Growing importance of Latin America in

Critical Minerals Security Programme Establish
global climate negotiations.
a $5 billion sovereign fund for mineral investments,
joint exploration ventures with local miners,
Key Areas to Watch
develop processing facilities, technology transfer
programmes, and supply chain security protocols.
• Brazil’s implementation of environmental
policies.
Trade Enhancement Framework Establish trade
• Argentina’s economic stabilisation efforts. facilitation offices, digital platforms, warehousing,
export promotion strategies, and trade finance
• Regional response to global trade tensions. mechanisms with regional banks.

• Evolution of China’s influence in the region. Investment Protection Mechanisms Establish

investment protection agreements, dispute
Policy Recommendation resolution frameworks, regional arbitration centres,
political risk insurance, and investment monitoring
Diplomatic Priorities - Detailed Framework systems.

Comprehensive Latin America Strategy Technology and Knowledge Exchange

Create country desks for major Latin American
economies, sector-specific plans, and ministerial Research Collaboration Framework Establish
dialogues with quarterly engagement goals. joint research funding, researcher exchanges,
shared IP frameworks, joint testing facilities, and
Expanded Diplomatic Presence Establish new innovation incubation centres.
consulates in strategic locations, deploy economic
attachés, form advisory boards with diaspora Tech Workforce Development Create specialised
and business leaders, create cultural centres, and visa centres, skill verification systems, cultural

96
 State of the World: Emerging Trends and Way Forward

integration programmes, language training safety collaboration between the U.S. Coast Guard
facilities, and job matching platforms. and Russia’s Border Guard near the Bering Strait.

Energy Security Impact on Scientific Collaboration Scientific

research in the Arctic has suffered significantly.
Long-term Energy Partnerships Create joint
Funding restrictions imposed by European and
exploration ventures, processing partnerships,
U.S. agencies have halted numerous collaborative
transport infrastructure, storage facilities, and price
projects with Russian scientists. Planned field
hedging mechanisms.
experiments have been relocated to the North
American or European Arctic, and critical
Renewable Energy Collaboration Create joint
permafrost data from Russia, essential for accurate
solar and wind projects, establish biofuel research
climate modelling, is no longer accessible. This
centres, develop green hydrogen initiatives,
suspension persists despite the 2018 Agreement
implement carbon trading mechanisms, and
on Enhancing International Arctic Scientific
establish technology transfer protocols.
Cooperation, designed to foster collaboration
among Arctic Council members.
Arctic
Militarisation of the Arctic
Annual Review

Inactivity of the Arctic Council Since March NATO Activities NATO countries have intensified
2022, the Arctic Council has been largely dormant, their military presence in the Arctic, conducting
a situation that persisted through 2024 due to large-scale exercises, including cold-weather
geopolitical tensions stemming from Russia’s training and joint operations. These actions are
special military operations in Ukraine. Norway, aimed at addressing security risks posed by
as the Council’s chair for 2023–2025, has made Russia’s activities and growing interest from non-
efforts to revive some working groups, with Arctic nations like China, while also enhancing
meetings resuming in a virtual format. However, preparedness for potential conflicts.
the overall functionality of the Council remains
severely limited. Russian Expansion In response, Russia has
expanded its Arctic military infrastructure,
Limited Russia-West Interactions Interactions constructing new airbases and deploying radar
between Russia and Western nations in the Arctic systems to strengthen its presence in the region.
are now restricted to treaty-based commitments.
These include agreements such as the ban on fishing Potential Russian Withdrawal from the Arctic
in the Central Arctic Ocean and aeronautical and Council Russia’s continued isolation has raised
maritime search and rescue operations. Cooperation the possibility of its withdrawal from the Arctic
is also minimal, exemplified by limited maritime Council. Moscow has stopped making annual

97
 State of the World: Emerging Trends and Way Forward

payments to the Council, demanding the resumption will likely expand its investments in Arctic
of “real work” involving all member states. This infrastructure, shipping, and resource
shift aligns with earlier amendments to Russia’s extraction, prompting concern from Arctic
Arctic policy, which now prioritises bilateral nations about its strategic intentions.
relationships over multilateral cooperation.
• New Governance Challenges: The potential
Russia’s Alternative Arctic Governance Efforts withdrawal of Russia from the Arctic Council
Russia has initiated efforts to establish a parallel could further destabilise the multilateral
governance mechanism in the Arctic. Plans include framework, complicating cooperation on
creating an international scientific and educational environmental, security, and scientific issues.
centre for BRICS and SCO countries in the Russian
Pyramiden settlement on the Svalbard Archipelago. Militarisation
This move signals Russia’s intention to counter its
exclusion from multilateral Arctic frameworks and • Heightened Military Presence: NATO
build new alliances in the region. countries will likely increase their military
activities in the Arctic, conducting joint
Prognosis for 2025 exercises and investing in advanced cold-
weather capabilities.
The Arctic in 2025 is likely to remain a hotspot
of geopolitical, environmental, and economic • Russian Arctic Militarisation: Russia is
contention. Under Trump’s presidency, the U.S. is expected to continue its expansion of Arctic
expected to prioritise national interests in energy, military infrastructure, including bases and
security, and resource competition, potentially air defence systems.
exacerbating existing tensions in the region.
Multilateral governance efforts may face additional • Non-Arctic Nations: Increased interest from
challenges, further complicating cooperation on non-Arctic states, including China and India,
critical Arctic issues. may lead to new geopolitical complexities in
the region.
Geopolitical
Climate and Environmental Issues
• Continued Russia-West Polarisation:
Russia’s isolation in Arctic governance is • Accelerating Climate Change: Arctic
expected to persist. Western Arctic nations warming is expected to continue at a rapid
will likely strengthen bilateral and regional pace, driving international attention to the
frameworks, excluding Russia. region’s role as a global climate indicator.

• China’s Growing Arctic Influence: As • Disrupted Scientific Cooperation: The

a self-declared “near-Arctic state,” China absence of Russia from scientific partnerships

98
 State of the World: Emerging Trends and Way Forward

will hinder permafrost research and climate Russia in the Arctic, particularly in energy
modelling, with alternative collaborations and infrastructure projects.
focusing on the North American and
European Arctic. • Increased Militarisation:Heightened Arctic
militarisation by NATO and Russia could spill
Implications for India over into global security dynamics, impacting
India’s broader strategic environment,
Strategic and Geopolitical Implications especially in its cooperation with Russia on
defence technologies and Arctic operations.
• Shift in Arctic Governance: The potential
withdrawal of Russia from the Arctic Economic Implications
Council and the fragmentation of multilateral
• Energy Security: The Arctic’s vast reserves
frameworks could limit India’s ability to
of oil, gas, and rare earth minerals are of
engage in Arctic governance. India, a non-
growing importance to India’s energy and
Arctic state with observer status in the Arctic
resource needs.
Council, relies on multilateralism for access
and collaboration in the region.
• Under Trump, U.S. energy policies may
encourage India to diversify partnerships
• If U.S.-led or Western Arctic governance
and seek Arctic resources through bilateral
gains prominence, India might need to
agreements with Russia and other Arctic
strengthen ties with Western Arctic nations
nations.
like Norway and Canada to maintain its
• Russian Arctic projects, particularly in
observer influence.
LNG, could become more attractive for
• Russia’s pivot to alternative frameworks,
India, aligning with its energy diversification
such as involving BRICS and SCO, could
strategy, but may face challenges due to
offer India opportunities for deeper Arctic
Western sanctions.
collaboration with Moscow, aligning with
India’s multipolar foreign policy.
• Shipping Routes: Melting Arctic ice and the
opening of shipping routes like the Northern
• U.S.-China Arctic Rivalry: Increased
Sea Route (NSR) could provide options to
U.S.-China competition in the Arctic could
extent the Chennai Vladivostok Maritime
polarise global positions, forcing India to
Corridor (CVMC) and the International
balance its ties.
North South Transport Corridor (INSTC) to
the Arctic.
• A more assertive U.S. Arctic policy under
Trump could complicate India’s growing o U.S.-led security and infrastructure
economic and strategic engagement with initiatives in the Arctic might support

99
 State of the World: Emerging Trends and Way Forward

safer shipping but could involve India to leverage Russian expertise in Arctic science and
in strategic alignments. infrastructure development.

o Russia’s focus on developing the NSR Strengthening Arctic Partnerships India

and involving BRICS countries may could use its Arctic Policy (launched in 2022) to
benefit India, especially for its energy strengthen bilateral ties with nations like Norway,
imports and trade logistics. Denmark, and Canada, focusing on research, clean
energy, and indigenous community collaboration.
Climate and Environmental Implications
Leadership in Climate Diplomacy India, as
• Impacts on Himalayan Ecosystem: a G20 leader and a major advocate for climate
Arctic climate changes significantly impact action, could play a role in pushing for Arctic
monsoon patterns and glacial stability in the climate research and multilateral cooperation,
Himalayas, critical to India’s agriculture and positioning itself as a bridge between polarised
water resources. Arctic stakeholders.

o Reduced international Arctic climate Policy Recommendations

collaboration due to geopolitical tensions
may hinder global understanding of Enhance Arctic Engagement India must increase
these linkages, leaving India vulnerable its Arctic involvement to safeguard its growing
to cascading environmental effects. national interests. India also needs to strengthen
ties with prominent Western Arctic nations like the
• Scientific Cooperation: Disruptions in US, Norway and Canada to maintain its observer
Arctic scientific collaboration, especially with influence. A key strategic priority for India is
Russia, may limit India’s access to critical to reduce Russia’s dependency on China by
data for climate modelling and research. offering alternatives in markets, financial support,
manpower, and, where feasible, technology.
o India’s National Centre for Polar and
Ocean Research (NCPOR) may need Deepening India-Russia Arctic Cooperation
to deepen partnerships with Western The Russian Arctic holds potential to address
Arctic nations to compensate for these India’s energy security needs and its deficit in rare
gaps. earth and strategic minerals. India should bolster
its bilateral collaboration with Russia in the Arctic,
Diplomatic and Strategic Opportunities for aligning with Russia’s call for expanded BRICS+
India engagement in the region.

BRICS and SCO Collaboration Russia’s push • Benefits for Russia: This approach could
for a BRICS and SCO-centred Arctic framework provide Moscow with viable alternatives to
could enhance India’s Arctic presence and allow it China’s influence.

100
 State of the World: Emerging Trends and Way Forward

• Opportunities for Indian Industries: • Enhanced Observer Role: India should

Strengthened ties with Russia could open lobby for an expanded role for Observer
doors for Indian businesses to collaborate in States, aiming to address the existing
areas like energy, infrastructure, and mineral inequalities between member states and
exploration. Observers.

• Expanding Influence in the Arctic Reforming the Arctic Council India should work
Council India’s engagement with the Arctic toward a broader reformation of the Arctic Council,
Council should not only continue but grow, including seeking eventual full membership. Such a
particularly through active participation in its move would solidify India’s position as a significant
Working Groups. stakeholder in Arctic governance and foster greater
influence over regional developments.
• Push for Resumption: India, along with
other Asian Observer States, must advocate
for the full restoration of the Council’s
activities.

101
 State of the World: Emerging Trends and Way Forward

Thematic

Internal Security J&K saw a significant voter turnout of 58.46 percent,

the highest in 35 years, while the state assembly
elections had a turnout of 63.88 percent. According
Annual Review
to the South Asia Terrorism Portal (SATP), 210
terrorism-related incidents were recorded in 2024,
India’s internal security landscape is shaped by its
resulting in the deaths of 26 security personnel and
diverse and dynamic socio-political environment.
31 civilians, while 69 terrorists were neutralised.
In 2024, significant developments unfolded across
Pakistan-based groups such as Lashkar-e-Taiba
multiple domains of internal security, including
(LeT) and Jaish-e-Mohammed (JeM), along with
Jammu and Kashmir, Left-Wing Extremism
their offshoots like The Resistance Front (TRF)
(LWE), Islamic extremism, Khalistan-inspired
and People’s Anti-Fascist Front (PAFF), remained
extremism, organised crime, and narcotics and
active. Additionally, in 2024, there was an increase
drug trafficking.
in drone intrusions along the Line of Control (LoC)
and International Border, with drones being used
Terrorism in Jammu and Kashmir The security
for smuggling narcotics, arms, and ammunition,
situation in Jammu and Kashmir (J&K) remained presenting new challenges for the security forces.
complex and volatile throughout 2024. Since the Although specific data for 2024 is not publicly
revocation of Article 370 in 2019, the region has available, previous trends suggest a continuation of
seen both, developmental progress and ongoing the rising threat from cross-border drone activities.
security challenges. The government’s strategy to
ensure a terror-free Kashmir persists, with security Left-Wing Extremism (LWE), also known as
forces carrying out extensive operations against Naxalism and led by the CPI (Maoist), continued
militancy. Additionally, law enforcement and to be a significant internal security challenge,
government bodies have been targeting individuals although it showed a declining trend. By 2024,
and groups linked to terrorism and anti-India only 38 districts were considered affected by
activities. During the 2024 Lok Sabha elections, Naxalism, a sharp decrease from 96 districts in

102
 State of the World: Emerging Trends and Way Forward

2010. This decline is attributed to the government’s to more secure channels has posed a significant
comprehensive security and development efforts, challenge for security agencies trying to monitor
which included expanding police presence and counter radicalised individuals online.
and improving intelligence sharing. However, Transnational terror organisations like the Islamic
concerns arose in Karnataka, where Maoist activity State (IS) and al-Qaida in the Indian Subcontinent
resurfaced in the forests of Malnad, near Koppa and (AQIS) remained active concerns. However, their
Sringeri, after a decade of relative calm, indicating activities were largely contained thanks to sustained
a potential resurgence of Naxalism. intelligence efforts.

While violence related to Left-Wing Extremism Khalistan-Inspired Extremism Khalistan-

has dropped significantly in recent years, a total of inspired extremism re-emerged due to false
161 LWE-related violent incidents were reported narratives of Khalistan propagated by a few pro-
in 2024, resulting in the deaths of 80 civilians Khalistan sympathisers among the Indian diaspora
and 24 security personnel, while 296 Maoists in the West. Anti-India protests in the UK and
were killed in counter-insurgency operations. the USA, carried out by Pakistan-supported pro-
The government’s rehabilitation initiatives saw Khalistan groups, fuelled tensions. However,
over 400 Maoists surrendering in 2024, reflecting diplomatic engagement mitigated some of the
the success of community outreach programmes. impact. Law enforcement agencies continued
Additionally, Prime Minister Narendra Modi crackdowns on Khalistan-linked operatives,
approved the construction of 15,000 houses in seizing arms and uncovering sleeper cells.
Naxal-affected areas. Improved infrastructure,
including enhanced road connectivity and Narcotics and Drug Trafficking The proliferation
electrification in these regions, disrupted insurgent of narcotics and drug trafficking posed critical
networks and facilitated better government access challenges to India’s internal security in 2024.
to these areas. According to the official data compiled by the
MHA, the federal agencies, including the Narcotic
Islamic Extremism (excluding J&K) India’s Control Bureau (NCB), seized a total of 4,134 kg
battle against Islamic extremism encountered of narcotics from the deep seas. In 2024, a total of
renewed challenges in 2024, influenced by both 1,17,284 kg of narcotics was destroyed under the
global trends and domestic vulnerabilities. Online aegis of the MHA.
radicalisation continued to be a growing threat,
with extremist groups targeting vulnerable youth Implications for India
via encrypted messaging platforms. These groups
have increasingly used secure messaging apps The flow of heroin and synthetic drugs from the
like Signal, Telegram, Viber, and the dark web, in Golden Crescent (Afghanistan, Pakistan, and
addition to WhatsApp’s end-to-end encryption, to Iran) continued unabated despite enhanced border
connect with like-minded individuals. This shift surveillance. Seizures of methamphetamine

103
 State of the World: Emerging Trends and Way Forward

and other synthetic drugs highlighted the rise youth to engage more actively in the mainstream.
of domestic production. Drug addiction among Pakistan-based terror groups, including Lashkar-e-
youth, mainly in states like Punjab and Manipur, Taiba (LeT), Jaish-e-Mohammed (JeM), and Hizb
remained a pressing concern, exacerbated by easy ul-Mujahideen (HM), will continue to plot and
availability and peer pressure. carry out terror attacks. While India’s strengthened
border management and coordinated counter-
The events of 2024 highlighted ongoing threats to terrorism (CT) operations will help mitigate these
national security, with the increasing infiltration in threats to some degree, they are unlikely to be
Jammu and Kashmir (J&K) and the rising cross- entirely eradicated.
border trafficking of narcotics revealing areas that
need urgent attention. Although relatively minor, Left-Wing Extremism (LWE) is expected to
incidents of extremism in Left-Wing Extremism continue its downward trend, with fewer areas
(LWE)-affected states represent a significant risk affected. However, sporadic attacks in states like
to public security and law and order. Terror-related Chhattisgarh, Odisha, and Jharkhand, as well as
activities in vulnerable regions of J&K and other ongoing propaganda efforts, will remain a security
LWE-affected areas also obstructed the progress of challenge, demanding sustained vigilance. In an
infrastructure projects and investments. attempt to assert their presence, Maoist groups
may increasingly target infrastructure projects in
The use of emerging technologies, such as AI- these regions.
driven deepfakes, by terror and anti-India groups
could pose a serious threat to the nation’s social Punjab will continue to grapple with the issues of
cohesion. These extremist actions may sow mistrust drug abuse and arms trafficking, often coordinated
between communities, further endangering peace by Pakistan-based operatives. Although the state’s
and harmony. Additionally, the growing issues of security forces are likely to ramp up operations
drug addiction and online radicalisation among against pro-Khalistan sympathisers and those
youth are likely to undermine India’s human connected to Organised Crime Syndicates (OCS),
capital, with long-term detrimental effects. there remains a significant concern regarding the
coordination between state and central agencies,
Prognosis for 2025 which could hinder the effectiveness of these
efforts.
In the context of Jammu and Kashmir, cross-
border infiltration and drone-based trafficking Policy Recommendations
from Pakistan are expected to persist, necessitating
adaptive countermeasures. However, the There is a need to invest in research and development
implementation of development programmes of advanced surveillance technologies, such as AI-
could accelerate socio-economic progress, helping powered drones and thermal imaging systems, to
address local grievances and encouraging Kashmiri detect and prevent infiltration.

104
 State of the World: Emerging Trends and Way Forward

Strengthening grassroots initiatives is crucial for Climate Change

fostering trust between the state administration and
local communities, ensuring that local grievances Annual Review
are effectively addressed.
In the past year, the effects of climate change have
Engaging local influencers and utilising significantly worsened. The threats arising from
social media campaigns can play a key role in this existential crisis are becoming more complex
and interconnected, challenging the ability of states
developing counter-narratives to combat extremist
and governments to manage them effectively.
ideologies.

In 2024, climate records were shattered once again,

By collaborating with tech companies and
from global average temperatures to greenhouse gas
intermediaries, stakeholders can enhance their
emissions. The effects were evident in the growing
ability to monitor and disrupt online radicalisation frequency and severity of extreme weather events,
activities. including intense summer heat, heavy rainfall,
and catastrophic flooding. Key climate change
Community policing and active engagement can trends, such as greenhouse gas emissions, rising
help build a trustworthy network that provides global temperatures, heat waves, extreme rainfall,
valuable intelligence to counter potential threats. floods, landslides, and developments at COP29 are
discussed in succeeding paragraphs.
Strengthening international cooperation,
particularly with countries in the West, and Record-breaking Greenhouse Gas Emissions
leveraging the influence of the diaspora can aid in Atmospheric concentrations of greenhouse gases
countering pro-Khalistan groups. surged in 2023, with CO2 levels reaching 420 parts
per million (ppm), the highest in recorded history,
Promoting cultural integration initiatives will help compared to 280 ppm in the late 1700s. Methane
challenge and reduce the influence of pro-Khalistan and nitrous oxide concentrations also rose sharply,
ideologies. driven by persistent fossil fuel usage, wildfires, and
reduced carbon absorption by trees.
Laws and regulations need to be reinforced to
Global Temperature Milestone The European
address the various dimensions of organised crime
Space Agency (ESA) reported that 2024 is
effectively.
“virtually certain” to become the hottest year
on record, surpassing 2023’s global average
A nationwide “anti-narcotics” campaign in
temperature of 1.48°C above pre-industrial levels.
educational institutions will raise awareness about Temperatures have already reached 1.62°C above
the risks of drug abuse, while the inclusion of the pre-industrial baseline, signalling an urgent
psychologists in drug rehabilitation centres will warning about exceeding the Paris Agreement’s
enhance patient recovery efforts. long-term 1.5°C target.

105
 State of the World: Emerging Trends and Way Forward

Climate Change Impacts Carbon Markets Some progress was made on

operationalising Article 6 of the Paris Agreement,
Heat Waves 2024 witnessed unprecedented heat including guidelines for international carbon
waves, with 15 national and 130 monthly tem- trading and crediting mechanisms.
perature records shattered. Night-time temperatures
remained unusually high, compounding stress on Implications for India
ecosystems and human health. Experts highlighted
the alarming frequency and intensity of extreme The Centre for Science and Environment (CSE),
heat events, driven by global warming and a fading a New Delhi-based think tank, reported that India
El Niño phenomenon. experienced extreme weather events on 255 out
of 274 days (over 93 percent) between January 1
Extreme Rainfall, Floods, and Landslides and September 30, 2024. These events—ranging
Catastrophic flooding and landslides occurred from heat and cold waves to cyclones, lightning,
worldwide. Highlights include severe flooding in heavy rain, floods, and landslides—claimed 3,238
East Africa affecting over 700,000 people, Brazil’s lives, impacted 3.2 million hectares of cropland,
Rio Grande do Sul impacting 2.3 million, and damaged 235,862 houses, and killed over 9,457
devastating landslides in northern Kerala, India. animals. However, the reported losses are likely
In Europe, Eastern Spain faced its deadliest flood underestimated due to incomplete data, especially
since 1967, with over 200 fatalities. regarding public property and crop damage.

Madhya Pradesh recorded extreme weather nearly

COP29 Negotiations
every other day, the highest in the country, while
Kerala reported the most fatalities (550), followed
The 2024 United Nations Climate Change
by Madhya Pradesh (353) and Assam (256). Andhra
Conference (COP29) in Baku faced criticism for
Pradesh saw the most houses damaged (85,806),
its inadequate outcomes.
while Maharashtra, which experienced extreme
weather on 142 days, accounted for over 60 percent
Climate Finance Developing nations demanded of the total affected crop area nationwide, followed
$1.3 trillion annually to transition to low-carbon by Madhya Pradesh (25,170 hectares).
economies and adapt to climate impacts. However,
the agreement pledged only $300 billion annually Regionally, Central India faced the highest
by 2035, sparking outrage from global leaders and frequency of extreme events, with 218 days,
NGOs. closely followed by Northwest India at 213 days.
Central India also reported the highest fatalities
Fossil Fuels COP29 failed to make progress (1,001), followed by South India (762 deaths), East
on phasing down fossil fuels, referencing past and Northeast India (741 deaths), and Northwest
commitments without new action. India (734 deaths).

106
 State of the World: Emerging Trends and Way Forward

Prognosis for 2025 costs and challenges. India must accelerate climate
adaptation, prioritising nature-based solutions
Greenhouse gas emissions show no signs of such as reforestation, mangrove restoration, coral
slowing, making it likely that atmospheric reef conservation, and wetland regeneration. These
concentrations will reach another record high in approaches are cost-effective, enhance resilience
2025. Consequently, global average temperatures to extreme weather, and reduce emissions by
are expected to continue rising throughout the year. capturing carbon. India should also invest in
This increase, coupled with higher temperatures, climate-resilient infrastructure and early-warning
will drive more frequent and intense extreme systems to mitigate the impacts of extreme weather
weather events, disproportionately affecting events.
countries with limited resources to recover or those
least responsible for climate change. Strengthen Data Collection on Extreme Weather
Impacts India faces significant gaps in recording
The 2025 United Nations Climate Change and assessing losses from extreme weather events.
Conference (COP30) is scheduled to take place The lack of a comprehensive public database hinders
in Belém, Brazil, from November 10-21. Key effective disaster management and evaluation.
agenda items include reducing greenhouse gas India needs a robust system to accurately quantify
emissions, adapting to climate change, financing losses and damages, moving beyond counting
climate action in developing nations, advancing disasters to provide credible, actionable data.
renewable energy and low-carbon technologies,
preserving forests and biodiversity, and addressing
Technology and Innovation
climate justice and the social impacts of climate
change. However, it remains uncertain whether the
Annual Review
conference will achieve meaningful progress on
these critical issues.
Amid the global competition among major powers
The year 2025 represents a pivotal moment for to develop and deploy emerging technologies
climate cooperation and ambition. As the focus for economic, defence, and strategic advantage,
of climate diplomacy shifts from setting targets India has made significant advancements in key
to delivering tangible results, the challenge will technological areas. These developments will be
be navigating a fractured global landscape where crucial in helping India achieve its goal of a ‘Viksit
leadership and clear commitment to the next steps Bharat’ by 2047.
remain uncertain.
2024 marked a pivotal year for India’s technological
Policy Recommendations and innovation landscape. India made remarkable
advancements across several domains, solidifying
Implement Climate-Resilient Solutions its position as a global technology powerhouse.
Delaying adaptation efforts will only increase These achievements stemmed from government

107
 State of the World: Emerging Trends and Way Forward

initiatives, a burgeoning start-up ecosystem, and AI-supported diagnostics and drug discovery
an increasingly skilled workforce. advanced patient care. Defence applications,
including autonomous systems and enhanced
Space Technology Achievements India’s space intelligence analysis, further showcased the
sector witnessed transformative progress. The strategic importance of AI. AI was also integrated
Indian Space Research Organisation (ISRO) into traffic management and urban mobility
launched the Space Docking Experiment (SpaDeX), solutions, reflecting its utility in improving daily
positioning India as the fourth nation capable of life.
in-space docking. This milestone is critical for
future missions such as Chandrayaan-4 and India’s Semiconductor Technology Expansion
planned space station by 2035. Preparations for the India made significant strides toward reducing
Gaganyaan mission also continued, with multiple dependency on imported semiconductors. The
trials ensuring mission readiness for India’s first India Semiconductor Mission (ISM) approved five
manned space flight. new semiconductor units, attracting over ₹1.5 lakh
crore in investments. These facilities, supported by
Other notable missions included Chandrayaan- Production Linked Incentive (PLI) schemes, are
3’s historic lunar landing, Aditya-L1’s solar set to produce seven crore chips daily, propelling
observations, and successful reusable spaceflight India into the global semiconductor manufacturing
experiments. The Indian space economy grew arena. Collaborative projects between domestic
exponentially, with projections of a fourfold firms and international partners, such as the Tata-
increase in its global share by 2030. ISRO’s Powerchip joint venture, further bolstered the
collaboration with private players through the New semiconductor ecosystem.
Space Policy of 2023 accelerated innovation, with
space sector start-ups increasing to nearly 200 by Defence and Hypersonic Technology India’s
the end of 2024. defence technology advanced with the successful
test of long-range hypersonic missiles. The
Artificial Intelligence (AI) Progress India establishment of the Hypervelocity Expansion
continued to advance in AI, leveraging its strong Tunnel Test Facility at IIT Kanpur underscored
talent pool and start-up ecosystem. AI applications India’s commitment to indigenous defence
across agriculture, healthcare, and defence capabilities. These developments enhance India’s
demonstrated potential for transformative impact. strategic deterrence and combat readiness.
Initiatives like “AI for India 2.0” and the IndiaAI Research in Hypersonic Glide Vehicles (HGVs)
Mission fostered innovation, focusing on areas and Hypersonic Cruise Missiles (HCMs)
like ethical AI, machine unlearning, and privacy- continued, highlighting India’s determination to
enhancing tools. lead in advanced defence technologies.

In agriculture, AI-powered precision farming Drone and Autonomous Weapons Systems

enhanced resource efficiency, while in healthcare, (AWS) India’s drone ecosystem flourished with

108
 State of the World: Emerging Trends and Way Forward

advancements in agricultural, logistics, and establishment of domestic capabilities in critical

military applications. Policies such as the Drone defence technologies reduces dependency on
Rules 2021 and ‘Drone Shakti’ initiative supported imports, contributing to greater national security.
start-ups and domestic manufacturing. In military
contexts, the development of coordinated drone Global Influence and Diplomacy India’s
swarms and AI-enhanced targeting showcased technological progress enhances its influence in
India’s growing capabilities in AWS. Drone usage global forums. Through initiatives like the Global
also expanded into infrastructure inspection, Partnership on AI (GPAI) and bilateral agreements
disaster management, and precision farming, with the US, Japan, and the EU, India is shaping the
offering solutions to diverse societal challenges. international discourse on technology governance.
These efforts position India as a leader in setting
Implications for India global standards for emerging technologies.
Participation in multilateral forums such as the G20
India’s technological achievements have profound and BRICS further enables India to advocate for
implications across economic, security, and responsible technology usage and equitable access.
geopolitical dimensions.
Self-Reliance and Technological Independence
Economic Implications The growth of India’s The ‘Make in India’ initiative and PLI schemes
technology sectors is expected to significantly reduce reliance on imports, fostering a self-
boost its GDP. With projected increases in reliant technological ecosystem. Indigenous
semiconductor and space sector contributions, developments in semiconductors and defence
India is poised to become a global manufacturing technologies bolster India’s strategic autonomy.
hub. The expansion of start-ups in AI and drones This self-reliance also positions India to navigate
will drive innovation and job creation, solidifying global supply chain disruptions more effectively,
India’s position in the global value chain. Increased ensuring technological resilience.
foreign investments in technology infrastructure,
particularly in the semiconductor and AI sectors, Prognosis for 2025
will further fuel economic growth.
India is well-positioned to achieve substantial
National Security Technological advancements technological milestones in 2025, leveraging
in hypersonic missiles, drones, and cybersecurity its growing economy, skilled workforce, and
are strengthening India’s defence capabilities. supportive policies.
Hypersonic systems provide strategic deterrence,
while advancements in AWS enhance India’s combat Space Sector Expansion ISRO will launch new
readiness. Enhanced cybersecurity measures missions, including the NVS-02 satellite, enhancing
ensure the protection of critical infrastructure and navigation capabilities. Space technologies will be
bolster national resilience against cyberattacks. The applied in diverse areas like smart cities, water

109
 State of the World: Emerging Trends and Way Forward

management, and defence. India’s space sector is Commercial Drone Applications The drone
expected to further integrate public and private industry is expected to witness significant
participation, driving innovation and economic growth, with expanded applications in logistics,
growth. The development of reusable launch disaster management, and agriculture. Domestic
vehicles and human spaceflight capabilities will manufacturing capabilities will further reduce
also remain a key focus. dependency on imports, aligning with India’s self-
reliance goals. Innovations in drone technology,
AI Innovations AI applications will deepen including increased autonomy and payload
across sectors. Enhanced precision in agriculture, capacity, will enhance their utility across industries.
predictive analytics in healthcare, and AI-driven
decision-making in defence will underscore the Policy Recommendations
transformative potential of AI. Government-backed
projects like the AI supercomputer AIRAWAT To capitalise on its technological momentum,
India must implement comprehensive policies
will support cutting-edge research. AI’s role in
addressing key challenges and opportunities.
automating industries, optimising logistics, and
enhancing urban infrastructure management will
R&D Investment India should increase its R&D
grow significantly.
expenditure from the current 0.65 percent of
GDP to match global leaders like South Korea
Semiconductor Ecosystem Growth India will
(4.93 percent) and the US (3.46percent). This
continue expanding its semiconductor ecosystem
investment is crucial for sustained innovation
under the Semicon India 2.0 programme. Increased
and global competitiveness. Enhanced funding
investments and partnerships with global tech
for public research institutions and incentivising
firms will ensure a robust supply chain, reducing
private sector R&D will create a robust innovation
dependency on imports. The establishment of new
ecosystem.
fabrication units and research centres will support
innovation in chip design and manufacturing. Workforce Development India’s demographic
dividend presents an unprecedented opportunity.
Defence Technology Advancements Research Strengthening STEM education and technical
in hypersonic technology will remain a priority. training programmes will build a skilled workforce
Enhanced missile systems, combined with capable of driving technological and economic
advancements in AWS, will provide strategic transformation. Special focus should be given to AI,
advantages. Indigenous R&D efforts will align space, and semiconductor sectors. Collaborations
with the ‘Make in India’ initiative to ensure defence with global universities and institutions can
self-reliance. Continued testing and development enhance the quality of education and training.
of Hypersonic Glide Vehicles and next-generation
missile systems will strengthen India’s defence Business and Investment Climate Simplifying
posture. regulatory processes and providing timely financial

110
 State of the World: Emerging Trends and Way Forward

support will attract investments in emerging talent development initiatives will position India as
technologies. Expanding the PLI scheme and easing a leader in inclusive innovation. Sharing expertise
business operations will encourage domestic and in areas like cybersecurity and digital governance
foreign firms to establish manufacturing facilities will strengthen ties with partner countries. India’s
in India. Streamlined approval processes and tax efforts to bridge the digital divide can also enhance
incentives can further boost investor confidence. its soft power and global influence.

Strengthen International Collaborations India By addressing these priorities, India can harness the
must leverage strategic partnerships to attract transformative potential of emerging technologies,
foreign direct investment (FDI) and facilitate driving economic growth, enhancing national
technology transfer (ToT). Collaborations with security, and improving the quality of life for its
countries like the US, Japan, and Israel will bolster citizens. Investments in R&D, infrastructure, and
innovation and align India with global technology talent development will secure India’s position as a
standards. Joint ventures in high-tech industries global technological powerhouse, paving the way
will promote knowledge exchange and resource for a prosperous and equitable future.
sharing.

Defence Modernisation Dedicated R&D efforts Cyber Security

in hypersonic technology and AWS are essential
to maintain strategic superiority. Investments in Annual Review
advanced defence systems will ensure readiness for
India’s cybersecurity framework grew substantially
modern warfare. Establishing dedicated defence
in response to the increasing digitalisation
innovation hubs can accelerate the development of
of public and private sectors. Key initiatives
next-generation military technologies.
included the establishment of partnerships like
Engage in Global Governance Active the Military College of Telecommunication
participation in international technology Engineering (MCTE) and Society for Electronic
governance forums is vital. India should shape Transactions and Security (SETS) Memorandum
global standards for emerging technologies, of Understanding (MoU). These efforts focused on
ensuring ethical development and deployment. advancing research and development in quantum
Expanding the number of Science & Technology computing, hardware security, and cryptology.
(S&T) counsellors in foreign missions will enhance
India’s technology diplomacy. Advocating for The government launched the National Mission
equitable access to emerging technologies will on Interdisciplinary Cyber-Physical Systems
strengthen India’s global standing. (NM-ICPS), with a budget of ₹3,660 crores,
creating 25 Technology Innovation Hubs. These
Foster Global South Cooperation Collaborating hubs drive innovation in fields like AI, machine
with developing nations on joint R&D projects and learning (ML), and robotics, reinforcing India’s

111
 State of the World: Emerging Trends and Way Forward

cybersecurity resilience. The Indian Computer Management System (CFCFRMS), launched

Emergency Response Team (CERT-In) played a in 2021, saved over ₹3,431 crore across 9.94
pivotal role in responding to cyber threats, issuing lakh cases by 2024. However, low cybersecurity
advisories, and enhancing early warning systems. awareness remains a significant concern.
Additionally, collaborations with global tech giants
like Google, Amazon, and Microsoft contributed to Implications for India
strengthening India’s cybersecurity infrastructure.
Amid rising state-sponsored cyberattacks, India’s
Surge in Cyberattacks India experienced over geopolitical tensions with neighbouring countries
1.2 million cybersecurity incidents in 2024, with have extended into cyberspace. Cyber threats from
ransomware and phishing attacks significantly China and Pakistan pose a significant challenge to
impacting healthcare, finance, and education. India’s cybersecurity framework, emphasising the
need for a robust defence system and proactive
State-Sponsored Cyber Threats Critical countermeasures. Cyber-espionage operations
infrastructure faced heightened risks from state- targeting Indian government entities, such as those
sponsored cyberattacks, particularly from China by groups like Suckfly and Danti, have exposed
and Pakistan. A major incident involved Chinese- critical vulnerabilities.
backed hackers targeting northern India’s power
grid, exposing vulnerabilities in operational The absence of global consensus on cyber-
technology (OT) systems. warfare norms complicates the attribution and
response to these attacks. Cyberattacks on critical
Implementation of Data Protection Laws national infrastructure (CNI) remain particularly
The Digital Personal Data Protection Act, 2023, concerning, as successful breaches—such as one
introduced a robust legal framework for data targeting the energy sector—could disrupt power
privacy. While it enforced stricter regulations, supplies, jeopardising industries, hospitals, and
challenges emerged, particularly for small and public safety.
medium enterprises (SMEs), in meeting compliance
requirements. Prognosis for 2025

Rise in Individual Cybercrime Identity theft and Cybersecurity Enhancements Investments in

financial fraud surged, with 7.4 lakh complaints cybersecurity infrastructure will intensify, with
of digital arrest scams registered in early 2024 a focus on protecting critical information and
alone. Financial losses totalled over ₹2,140 crore developing advanced threat detection systems.
by October, undermining public trust in digital India’s talent development programmes will
platforms. cultivate cybersecurity experts capable of
addressing evolving threats. Research into quantum
Efforts to Combat Financial Cybercrime The cryptography and blockchain-based security
Citizen Financial Cyber Fraud Reporting and solutions will likely accelerate, providing India

112
 State of the World: Emerging Trends and Way Forward

with cutting-edge tools to counter sophisticated hygiene campaign through schools, universities, and
cyberattacks. NGOs will help reduce individual vulnerabilities
to cyber fraud and attacks.
In 2025, India’s digital transformation will
progress, presenting both opportunities and Strengthening CERT-In and Proactive Cyber
cybersecurity challenges. Cyberattack volumes are Defence India must invest in expanding the
projected to increase, with threat actors exploiting technical capabilities and workforce of CERT-In
emerging technologies like quantum computing, to improve threat detection and incident response.
the Internet of Things (IoT), and AI-powered tools Routine penetration testing and cyber drills
to execute more sophisticated attacks. Tools such for critical infrastructure operators are vital for
as Ransomware-as-a-Service (RaaS) and other ensuring readiness against evolving threats.
cybercrime services are expected to amplify their
impact. Building a Resilient Cyber Ecosystem In 2025,
India must prioritise cybersecurity to counter
Policy Recommendations emerging threats, refine policies, and embrace
innovation. By adopting global best practices
Strengthening Cybersecurity for Critical
and enhancing indigenous capabilities, India can
National Infrastructure (CNI) India must enhance
protect its digital infrastructure and ensure the
the security of its CNI by increasing investments
safety of its citizens, or “digizens,” while realising
in Operational Technology (OT) systems. Both
its digital growth potential.
government and private stakeholders should
adopt advanced measures, such as AI for real-time
monitoring and Zero-Trust architectures, to secure
Maritime
key sectors.
Annual Review
Boosting Indigenous R&D and Innovation The
government’s focus on policies like ‘Make in 2024 was a transformative year for India’s
India’ and the ‘AI Mission’ will bolster startups maritime sector, with significant advancements
developing AI, Machine Learning (ML), quantum, in shipping, shipbuilding, the blue economy,
and blockchain solutions. These initiatives aim to and trade. These developments were driven by
foster an ecosystem of innovation in cybersecurity ambitious government initiatives, increasing
technologies. global trade linkages, and a focus on sustainability
and innovation. Key milestones and events in each
Enhancing Legal Framework and Cyber domain are summarised below:
Awareness To complement the Digital Personal
Data Protection (DPDP) Act 2023, sector-specific India-Middle East Europe Economic Corridor
laws addressing cybersecurity in areas like finance (IMEC) The Union Cabinet approved the Inter-
and healthcare are essential. A nationwide cyber- Governmental Framework Agreement (IGFA)

113
 State of the World: Emerging Trends and Way Forward

signed during a high-level visit between India National Maritime Heritage Complex (NMHC)
and the UAE to strengthen cooperation in ports, Project The Cabinet approved the development
maritime, and logistics sectors as part of the India- of NMHC at Lothal, Gujarat, to showcase India’s
Middle East Europe Economic Corridor (IMEC). maritime history, with a focus on heritage and
culture.
World Bank’s Logistics Performance Index
(LPI) 2023 India Maritime Heritage Conclave 2024 In
December 2024, MoPSW hosted the first India
• India ranked 22nd in international shipments, Maritime Heritage Conclave, celebrating India’s
up from 44th in 2014. maritime legacy and its role in global trade.

• Container dwell time reduced to 3 days, International Container Transhipment Port

outperforming many countries. (ICTP) at Great Nicobar Island A mega
transshipment port at Galathea Bay is under
• India’s port turnaround time improved to 0.9 development with an investment of Rs. 43,796
days, better than many major global ports. crores, aiming for significant cargo handling
capacity and job creation.
Re-election to the International Maritime
Organisation (IMO) Council India was re-elected Ports
with the highest votes (157 out of 163) to the IMO
Council for 2024-25, reaffirming its leadership in Ports Performance
international seaborne trade.
• Major ports’ cargo handling capacity has
State Maritime & Waterways Transport grown to 1,630 MTPA by March 2024. The
Committees (SMWTCs) MoPSW established target is 3,500 MTPA by 2030 and 10,000
committees in 12 states to implement maritime and MTPA by 2047.
waterway schemes, with more being set up across
India. • India’s ports have shown marked efficiency
improvements, with a 2.59 percent increase
Tuticorin International Container Terminal in cargo handling in FY 2024.
(TICT) The TICT at V.O. Chidambaranar Port was
inaugurated with an investment of over Rs. 434 Vadhavan Port Development On August 30,
crores, capable of handling 6 lakh TEUs annually. 2024, the foundation stone for the Vadhavan Port
in Maharashtra was laid, a project estimated at INR
Cruise Bharat Mission Launched in September 76,000 crores to enhance India’s port infrastructure.
2024, this initiative aims to double cruise tourism
in India by 2029, boosting the sector’s growth Sagar Aankalan Guidelines Launched in
potential. February 2024, these guidelines aim to benchmark

114
 State of the World: Emerging Trends and Way Forward

and improve Indian ports’ performance, increasing development of India’s maritime sector, including
competitiveness. ports, shipping, and waterways, with 150 initiatives
aimed at establishing India as a global maritime
Shahid Beheshti Port Terminal Development On leader. It focuses on ten interconnected themes
May 13, 2024, India and Iran signed a long-term such as port infrastructure, logistics efficiency,
contract for developing the Shahid Beheshti Port in shipbuilding, coastal and waterway traffic,
Chabahar, enhancing trade links with Central Asia. technology, policy support, sustainability, and
global collaboration.
World Bank CPPI 2023 Report Ten Indian ports,
including Visakhapatnam, made it to the global top
Key Achievements Under MIV 2030
100 in the CPPI 2023, with Visakhapatnam moving
from 122nd to 19th position.
Over the past three years, significant progress has
been made across various maritime sectors:
Shipping

• Port Capacity: Increased from 1598

Resumption of India-Sri Lanka Passenger Ferry
MMTPA in FY 2022 to 1630 MMTPA in FY
On August 16, 2024, the ferry service between
2024.
Nagapattinam (India) and Kankesanthurai
(Sri Lanka) was resumed, enhancing regional • Vessel Turnaround Time (TAT): Reduced
connectivity and tourism. from 53 hours in FY 2022 to 48 hours in FY
2024.
Inland Waterways
• Ship Berth Day Output: Improved from
Cargo Movement via Inland Waterways Freight 16,000 MT in FY 2022 to 18,900 MT in FY
movement via Inland Waterways (IWT) has 2024.
increased sevenfold from 18.1 MMT in FY 2014
to 133.03 MMT in FY 2024. A 6.66 percent rise • Global Ranking: Two Indian ports now
was noted in cargo transported between April- feature in the global top 30.
November 2024.
• Logistics Performance: India’s ranking in
the World Bank’s Logistics Performance
Cargo Promotion Scheme Launched in December
Index improved from 44 in 2018 to 22 in
2024, this scheme offers a 35 percent incentive to
2023.
promote the use of inland waterways for cargo
transport, aiming to divert 17 percent of cargo • National Waterways Cargo: Increased
to water transport, including a scheduled service from 108 MMT in FY 2022 to 133 MMT in
between Kolkata and Varanasi/Pandu. FY 2024.

Maritime India Vision (MIV) 2030 The MIV • Coastal Tonnage: Grew from 260 MMT in
2030 outlines a strategic plan for the comprehensive FY 2022 to 324 MMT in FY 2024.

115
 State of the World: Emerging Trends and Way Forward

Financial Investments and Projects The Ministry • Viksit Bharat Sankalp (ViBhaS) and
of Ports, Shipping, and Waterways saw a 37 percent Neel Arth Vision Implementation Cells
increase in capital expenditure, rising to Rs. 7571 (NAVIC): Facilitate tracking and innovation,
crore in FY 2024. There was also a 54 percent ensuring alignment with MIV 2030’s
increase in the Gross Budget Support (GBS) to Rs. objectives and promoting structured progress.
1687 crore. Around 75 port development projects
were awarded, enhancing cargo handling and Incentives for Domestic Shipyards
operational efficiency.
The government has introduced additional
incentives to boost the development of fuel-
Boost to Maritime Trade and Employment The
efficient and technologically advanced vessels in
maritime trade has experienced a significant rise:
India’s shipping sector. These measures include:

• Port Traffic: Increased from 720 MMT in • Amended Shipbuilding Financial Assistance
FY 2022 to 820 MMT in FY 2024. Policy:

• Coastal Tonnage: Rose from 260 MMT in o 30 percent financial assistance for
FY 2022 to 324 MMT in FY 2024. vessels using green fuels like Methanol,
Ammonia, or Hydrogen fuel cells.
• National Waterways Cargo: Increased
from 108 MMT to 133 MMT across more o 20 percent financial assistance for
operational waterways. vessels with fully electric or hybrid
propulsion systems.
This surge in maritime trade has led to job creation
• Maritime AmritKaal Vision (MAKV 2047):
in various sectors such as logistics, shipping,
India aims to be among the top 5 global
port operations, shipbuilding, and cruise tourism,
shipbuilders by 2047. The government is
supporting both economic growth and skill
supporting this goal through the Shipbuilding
development.
Financial Assistance Policy (SBFAP),
encouraging the ‘Make in India’ initiative
Monitoring and Evaluation Mechanisms To
and enhancing shipyard competitiveness in
ensure the effective implementation of MIV 2030,
both domestic and international markets.
the Ministry has established robust monitoring
tools: o SBFAP Scheme (2016-2026): The
policy provides financial assistance for
• Sagarmanthan Portal: Tracks progress shipbuilding contracts signed between
on KPIs, projects, and strategies, offering April 1, 2016, and March 31, 2026,
visibility on capital expenditure, traffic, port starting from 20 percent in 2016 and
performance, and project outcomes. reducing to 11 percent by 2026.

116
 State of the World: Emerging Trends and Way Forward

• Current Impact: 45 shipyards have • Fish harbours and skill development initiatives
registered under the scheme, with 19
shipyards receiving financial assistance, • Coastal community development
leading to the construction and delivery of
144 vessels, totalling Rs. 385.16 crore in • International-standard cruise terminals
released funds.
• Innovative projects like Ro-Pax ferry services
Sagarmala Scheme: Promoting Port-Led
Development State-wise details of these projects are tabulated
below.
The Sagarmala Scheme, launched by the Ministry
of Ports, Shipping, and Waterways, is a key
Expansion of the Blue Economy
initiative aimed at fostering port-led development in
India. Under this scheme, the government provides
India’s blue economy strategy gained traction,
financial support to State Governments and Union
focusing on sustainable exploitation of ocean
Territories for a range of projects, including:
resources. The Ministry of Earth Sciences (MoES)
launched the Deep Ocean Mission’s second
• Port infrastructure
phase, targeting resource exploration, biodiversity
• Coastal berth and road/rail connectivity conservation, and marine spatial planning. Coastal
projects community development initiatives under the

State/UT No. of Total Completed (₹ Cr) Under Implementation

Projects Project Cost (` Cr)
(` Cr)
No. of Total Project No. of Total
Projects Cost Projects Project Cost
Andaman & Nicobar Islands 3 46 1 13 2 32
Andhra Pradesh 12 2,409 7 1,114 5 1,295
Goa 9 763 5 85 4 677
Gujarat 9 1,388 3 364 6 1,024
Karnataka 8 493 3 71 5 422
Kerala 8 273 6 134 2 139
Maharashtra 31 1,920 19 829 12 1,092
Odisha 6 350 1 4 5 346
Puducherry 2 30 1 27 1 2
Tamil Nadu 22 1,240 14 1,004 7 226
West Bengal 9 569 6 404 3 165
Total 119 9,480 66 4,049 52 5,420

117
 State of the World: Emerging Trends and Way Forward

Matsya Sampada Yojana improved livelihoods wind farms reduce the maritime sector’s carbon
through aquaculture and marine tourism. The footprint, contributing to global sustainability
government also initiated research into harnessing goals. Moreover, efforts to conserve marine
offshore wind energy to diversify the blue biodiversity ensure the long-term health of ocean
economy’s contribution to the GDP. ecosystems.

Implications for India Geopolitical Influence Improved maritime

connectivity and trade agreements enhance India’s
The maritime advancements in 2024 have profound role in regional and global supply chains. Strategic
implications for India’s economic growth, national port investments in neighbouring countries, such as
security, and environmental sustainability. These the development of Chabahar Port in Iran, bolster
developments are expected to shape India’s India’s geopolitical influence. These projects
regional and global standing in the following ways: counterbalance competing initiatives like China’s
Belt and Road Initiative (BRI), positioning India as
Economic Growth India’s enhanced maritime
a key player in the Indo-Pacific.
infrastructure and growing shipbuilding
capabilities will significantly boost GDP. The
blue economy’s expansion is set to create millions
Prognosis for 2025
of jobs, particularly in coastal regions, while
India is expected to build on its 2024 achievements,
sustainable aquaculture and marine tourism
with several transformative developments
diversify revenue streams. The increased efficiency
anticipated in 2025:
in shipping logistics is expected to reduce trade
costs, benefiting exporters and importers alike.
Shipping Sector Projections The shipping
National Security India’s shipbuilding progress sector will likely see further adoption of green
strengthens its naval capabilities, providing technologies, with more LNG and hybrid-powered
modern vessels to the Indian Navy and Coast vessels entering service. The National Maritime
Guard. This bolsters maritime security, particularly Logistics Portal is expected to integrate advanced
in the Indian Ocean Region (IOR), where India AI and blockchain systems, improving transparency
faces challenges from strategic competitors. and operational efficiency. Coastal shipping’s share
Enhanced port infrastructure also supports the in domestic cargo movement is predicted to grow,
swift deployment of defence assets, ensuring the driven by incentives for using waterways over road
protection of critical maritime trade routes. and rail transport.

Environmental Sustainability The focus on Shipbuilding Industry Outlook India’s

green shipping and renewable energy in the blue shipbuilding industry is poised for rapid expansion,
economy aligns with India’s climate commitments. with new shipyards being established in Gujarat
Initiatives such as LNG-fuelled ships and offshore and Andhra Pradesh. Indigenous construction

118
 State of the World: Emerging Trends and Way Forward

of advanced defence vessels, such as stealth • Develop dedicated coastal shipping terminals
frigates and submarines, will strengthen the to promote the use of waterways for domestic
Navy’s capabilities. Increased collaboration with freight movement.
global leaders will further enhance technological
• Establish a robust maritime logistics network
expertise, enabling Indian shipyards to capture a
integrating ports, railways, and roadways.
larger share of the international market.
• Support Shipbuilding Industry
Blue Economy Expansion The blue economy’s
contribution to the GDP is expected to rise • Extend financial incentives under the
significantly, driven by new projects in aquaculture, Shipbuilding Financial Assistance Policy to
offshore wind energy, and marine biotechnology. cover emerging technologies like autonomous
India’s efforts in deep-sea mining, particularly for ships.
rare earth elements, will gain momentum, reducing
dependence on imports. Marine spatial planning • Foster public-private partnerships to attract
initiatives will ensure the sustainable development investment in new shipyards and R&D
of coastal and marine areas. facilities.

• Facilitate technology transfer agreements

Trade Growth and Connectivity Maritime
with leading shipbuilding nations to enhance
trade volumes are forecasted to grow by 8-10
indigenous capabilities.
percent, supported by improved port infrastructure
and streamlined customs procedures. Strategic
Promote Sustainable Blue Economy
investments in transshipment hubs, such as
Vizhinjam in Kerala, will reduce reliance on
• Invest in research and development for
foreign ports. India’s participation in global trade
marine biotechnology, offshore renewable
forums will further enhance its integration into
energy, and deep-sea mining.
global supply chains.
• Implement strict regulations to prevent
Policy Recommendations overfishing and promote sustainable
aquaculture practices.
To maximise the benefits of its maritime
advancements, India should adopt the following • Expand coastal community development
policy measures: programmes to ensure inclusive growth and
livelihood security.
Strengthen Maritime Infrastructure
Enhance Maritime Trade and Connectivity
• Accelerate the modernisation of major
ports, focusing on increasing cargo handling • Negotiate new trade agreements with key
capacity and reducing turnaround times. partners to boost exports and imports.

119
 State of the World: Emerging Trends and Way Forward

• Develop transshipment hubs to reduce the consecration of the Ram Mandir in Ayodhya
reliance on foreign ports and enhance on January 22. This milestone followed the 2019
regional trade. Supreme Court verdict on the Ram Janmabhoomi-
Babri Masjid dispute. The temple’s opening,
• Simplify customs and regulatory procedures
marked by the “Pran Pratishtha” ceremony led
to facilitate seamless trade operations.
by Prime Minister Narendra Modi, symbolised a
revival of India’s cultural pride.
Strengthen Maritime Security
In June, the Prime Minister inaugurated the new
• Enhance share of Indian Navy and Indian Nalanda University campus in Bihar, rekindling
Coast Guard budget in the overall defence India’s ancient academic legacy. The initiative,
budget to safeguard critical sea lanes and supported by contributions from 17 countries,
maritime borders. aims to re-establish Nalanda as a global centre for
• Establish joint maritime surveillance education and philosophy.
initiatives with friendly nations to counter
Strengthening Cultural Diplomacy India
security threats in the IOR.
reinforced its cultural ties with Southeast Asia by
• Enhance cybersecurity measures to protect sending rare relics of Lord Buddha to Thailand
maritime infrastructure from cyberattacks. for a month-long exhibition, which drew over
4 million devotees. Restoration efforts at the Vat
Indian Civilisation, Heritage, Phou UNESCO World Heritage site in Laos further
demonstrated India’s commitment to preserving
Arts, and Culture
shared cultural heritage. Additionally, Prime
Minister Modi announced an annual $1 million
Annual Review contribution to UNESCO’s World Heritage Centre
to support conservation in the Global South.
In 2024, India marked several cultural milestones,
including the consecration of the Ram Mandir, Notable Archaeological Discoveries
significant archaeological findings at Rakhigarhi Archaeological excavations brought new insights
and Keeladi, and the recognition of Charaideo into India’s ancient history. At Rakhigarhi in
Moidams in Assam as a UNESCO World Heritage Haryana, researchers dated human remains back
Site. The revival of Nalanda as an educational 8,000 years, pushing the timeline of the Harappan
centre and the exhibition of Lord Buddha’s civilisation. Excavations in Tamil Nadu at Keeladi
relics in Thailand further showcased India’s rich revealed advanced urban planning and water
civilisational and spiritual heritage. management practices from the Sangam era, over
2,600 years ago. Other key efforts include studies
Cultural Awakening and Reviving Heritage at Lothal, uncovering evidence of a Harappan
One of the most significant events of 2024 was dockyard, and ongoing excavations in Madhya

120
 State of the World: Emerging Trends and Way Forward

Pradesh and Uttar Pradesh to explore links to the reinforces India’s cultural identity and positions
Mahabharata period. Uttar Pradesh as a potential hub for global religious
tourism. This development is expected to boost
Repatriation of Stolen Antiquities In July 2024, employment, tourism revenue, and related sectors
India signed a cultural property agreement with the in the region. Similarly, the inclusion of Charaideo
U.S. to prevent illegal trade and enable the return Moidams in the UNESCO World Heritage list
of stolen artefacts. The U.S. has already returned will enhance conservation efforts and draw global
297 antiquities to India, some dating back to 2000 attention to India’s cultural diversity.
BCE.

Recognition of Tangible and Intangible Heritage Policy Recommendations

The Charaideo Moidams in Assam were included
in the UNESCO World Heritage Site list, becoming Counter China’s Strategic Use of Buddhism
India’s 43rd entry. Additionally, five languages— Despite its officially atheist stance, China uses
Assamese, Bengali, Marathi, Pali, and Prakrit— Buddhism as a tool of foreign policy to strengthen
were conferred classical status, expanding India’s ties with Buddhist-majority nations and expand its
list of classical languages to 11. Pali and Prakrit, soft power in Asia. India, with its rich Buddhist
though no longer spoken, were recognised for their heritage, should take proactive steps to foster
influence on modern languages. similar connections. Building on the successful
exhibition of Lord Buddha’s relics in Thailand,
Prognosis for 2025 India could organise similar displays in other
Buddhist countries, as it previously did in Mongolia
Anticipation of Further Archaeological (2022) and Sri Lanka (2012). These initiatives
Discoveries Ongoing excavations and research would strengthen people-to-people connections
are expected to yield more discoveries in 2025, and enhance cultural diplomacy.
further enriching knowledge about India’s ancient
civilisation and cultural legacy.
Preserving Shared Heritage in Southeast Asia
India must increase investments in conserving
Strengthening Cultural Diplomacy India will
Hindu and Buddhist temples across Southeast Asia,
continue to foster civilisational connections
such as Prambanan (Indonesia), Ananda Temple
worldwide, leveraging its role as the spiritual home
(Myanmar), Vat Phou (Laos), and Angkor Wat
of Buddhism to deepen relations with Buddhist-
(Cambodia). Such efforts would not only preserve
majority nations. The Archaeological Survey of
shared cultural heritage but also deepen ties with
India (ASI) will maintain its significant role in
these nations.
preserving cultural heritage, particularly in the
Global South and Southeast Asia.
Strengthening Archaeological Preservation India
Cultural Identity and Economic Opportunities should enhance funding for the Archaeological
The consecration of the Ram Mandir in Ayodhya Survey of India (ASI) to support excavation,

121
 State of the World: Emerging Trends and Way Forward

restoration, and conservation efforts. Technological Museum, among others, holds a significant
upgrades are crucial for modernising ASI’s collection of such artefacts. India should advocate
operations. Increased excavations would contribute for redefining “illegal export” to include artefacts
to uncovering more aspects of India’s ancient taken during British rule.
civilisations and preserving cultural heritage for
future generations. Expanding UNESCO World Heritage Sites
India should prioritise increasing its UNESCO
Repatriation of Cultural Property India has World Heritage Sites. Comparatively smaller
made progress in repatriating stolen artefacts, with nations like Italy, France, and Germany have
significant returns from countries like the USA, far more recognised sites despite their shorter
Australia, and Germany. However, these artefacts civilisational histories. Given India’s rich cultural
were mostly smuggled post-independence. India and geographical diversity, its ancient heritage
must now press for the return of cultural treasures warrants greater international recognition.
looted during the colonial period. The British

122
 State of the World: Emerging Trends and Way Forward

Indian Armed Forces

Indian Army the way for the first bilateral meeting in five years
between Indian and Chinese leaders during the
BRICS summit.
Annual Review
Along the Line of Control (LoC) with Pakistan,
Year of Technology Absorption Building on the 2021 ceasefire held, but cross-border
its 2023 “Year of Transformation,” the Indian infiltration attempts increased violence in Jammu.
Army declared 2024 as the “Year of Technology Terror incidents in areas south of the Pir Panjal
Absorption.” This initiative emphasised integrating Range exploited security gaps caused by troop
advanced technologies such as drones, anti-drone redeployments to Ladakh. The security forces
systems, and cyber capabilities into infantry, neutralised 75 terrorists, with a notable decline in
artillery, and armoured units. The army focused local recruitment and a significant proportion of
on enhancing cyber operations by establishing foreign militants among those eliminated.
Command Cyber Operations and Support Wings
and training personnel to leverage technology Internal Security and Regional Instability In
effectively. Modernisation efforts included artillery Jammu & Kashmir, civilian and security force
upgrades, recruitment via the Agniveer programme, casualties totalled 58 in 60 terrorist incidents.
downsizing specific departments, and emphasising Meanwhile, the situation in Manipur deteriorated
indigenous technology. due to deepening ethnic tensions between the
Meitei and Kuki communities, resulting in
Operational Challenges on Northern and violence, displacement, and fear. The civil war in
Western Fronts On the Northern Front, tensions Myanmar further complicated matters, as refugees
with China persisted due to the PLA’s aggressive streamed into Mizoram and Manipur, adding to
military infrastructure buildup near the border. the region’s instability. The central government’s
However, 2024 marked a significant breakthrough decision to construct border fencing along the
in the prolonged standoff in Eastern Ladakh, with India-Myanmar border faced resistance from
disengagement at Depsang and Demchok paving Mizoram and Nagaland.

123
 State of the World: Emerging Trends and Way Forward

Modernisation and Indigenous Focus Artillery Policy Recommendations

modernisation gained momentum with new
contracts for advanced gun systems. Indigenisation A structured, long-term approach is urgently
efforts reached new heights, with the highest-ever required to replace ad-hoc measures and establish
growth in indigenous defence production and a a strong, independent defence industrial base
32.5percent increase in defence exports. However, that aligns with the Indian Army’s evolving
despite finalising blueprints for three Integrated requirements. Given the growing reliance on
Theatre Commands (ITCs), their implementation advanced technology, investing in specialised
was deferred to 2025. training and creating dedicated human resource
cadres is a strategic priority that can deliver
significant benefits over time.
Prognosis for 2025
To address the challenges posed by technologically
While the Indian Army made strides in advanced adversaries such as China, often in
modernisation and operational readiness, challenges coordination with Pakistan, the Indian Army must
in regional security, internal conflicts, and delays prioritise the development of updated strategies
in implementing critical reforms underscore the and doctrines. Publicly accessible versions of these
complexity of its operational landscape. The documents can enhance deterrence while guiding
coming year will likely see continued focus on focused modernisation efforts. They should
these transformative efforts while addressing emphasise future warfighting concepts and promote
unresolved issues. joint training to better prepare for emerging threats.

The current state of readiness along the northern With the first phase of the Agniveer initiative
borders with China is expected to persist. Despite underway, the Army must critically evaluate its
the recent breakthrough at the LAC, there are human resource policies. Is this model sustainable
unlikely to be immediate changes in the military and effective for the future? Given the active
posture. Infrastructure development will remain and extended borders along the LOC and LAC,
a priority as India works to bolster its deterrent maintaining both numerical strength and personnel
quality is essential to uphold territorial integrity.
capability against potential future Chinese military
A thorough review is necessary to ensure that the
coercion.
Army remains adequately staffed and capable of
meeting its operational demands.
Looking ahead to 2025, the Indian military will
continue to grapple with challenges along the LAC,
the LoC, and the eastern border with Myanmar. To
Indian Navy
support capability building and modernisation,
Annual Review
a substantial increase in the defence budget and
funding for defence research and development will The Indian Navy’s (IN) theme for 2024, “Combat
be essential. Ready, Credible, Cohesive, and Future

124
 State of the World: Emerging Trends and Way Forward

Proof,” captured the Navy’s evolving priorities. 51 maritime security centres across the world and
The continuing modernisation of India’s naval houses Information Liaison Officers (ILOs) from
capabilities reflected the nation’s commitment to 14 countries.
self-reliance in defence under the “Make in India”
initiative. Accretions and Personnel Stealth frigate Tushil
and Survey ship Nirdeshak were commissioned
Operational The IN maintained an increased in 2024 adding to IN’s capability. Commissioning
tempo of operations and high state of combat of Arighaat, the second SSBN (Ballistic Missile
readiness logging a cumulative 6500 ship days, 700 Nuclear Submarine) on August 29, 2024, added to
submarine days and approximately 50000 flying India’s second-strike capability. India is only one
hours in 2024. Sustained deployment particularly of the six nations in the world to build, design and
in Southwest Indian Ocean underscored IN’s operate SSBNs as well as aircraft Carrier. Presently
deterrence potential expanding its footprint 62 ships and one submarine are being constructed
across the oceans. Bilateral and multilateral in various Indian shipyards and Acceptance of
engagements enhanced cooperation, collaboration Necessity (AoN) has been accorded to 31 ships and
and interoperability amongst likeminded navies, submarines valued at around Rs 78,000 crore, all of
enhancing IN’s status as preferred security partner which will be made in India. This demonstrates IN’s
and first responder in Indian Ocean Region (IOR). commitment to indigenisation and self-reliance. IN
As part of its deployment in the Red Sea/Gulf of also concluded capital contracts amounting to over
Aden (GoA) 32 warships were deployed for a Rs 20,000 crores, in 2024.
cumulative 905 ship days escorting 249 merchant
ships with a cargo valued at approximately $4.5 The Cabinet Committee on Security (CCS)
billion. The operations also resulted in saving of approval for strategic programs, and contract
over 400 lives as part of the 161 maritime incidents conclusion for MQ 9B Reaper drones from
and capture of 62 pirates. the USA have been notable achievements. By
embracing advanced technologies such as drones
MILAN 2024 multilateral exercise was conducted and artificial intelligence, the Navy is ensuring it
in February witnessing participation from 50 remains equipped to address future challenges in
countries. Indian Navy also participated in 15 an ever-evolving security landscape.
bilateral/multilateral exercises, 32 maritime
partnership exercises and undertook six EEZ As part of its contribution to women empowerment,
surveillance missions, seven coordinated patrols the Indian Navy granted permanent commission
and eight hydrographic surveys with friendly to 27 women officers and inducted 1321 women
foreign nations. The maritime domain awareness Agniveers in 2024. The Navy has a strength of
(MDA) initiative of the Indian Navy, the 9185 Agniveers on its rolls and has recruited from
Information Fusion Centre-Indian Ocean Region 673 out of 806 districts from India reflecting the
(IFC-IOR) now has linkages with 25 countries and diversity of its manpower.

125
 State of the World: Emerging Trends and Way Forward

Prognosis for 2025 and Implications The deployment of Chinese research and satellite
tracking vessels in the IOR has increased, with
The Indian Navy’s operational tempo is expected many operated by state-affiliated organisations tied
to remain high in 2025, influenced by ongoing to the Chinese military. These vessels, conducting
uncertainties such as the Israel-Hamas conflict, oceanographic surveys and resource exploration,
Houthi attacks in the Red Sea, and the continued align with China’s military-civil fusion strategy.
presence of the PLA Navy in the Western Indian This dual-use approach raises concerns about the
Ocean, the Middle east, and the Gulf. military implications, as the PLA can leverage
insights from these missions to enhance its
The prolonged crisis is likely to have a growing
undersea operations. This trend is expected to
negative impact on India’s trade and energy
persist in 2025.
security, while also stretching IN’s capabilities
and diverting substantial naval resources away
China’s investments in ports, storage facilities,
from strengthening core capabilities to counter the
and soft power initiatives, including sustained
Chinese navy in the Indian Ocean.
involvement in anti-piracy operations, have
India faces significant challenges in the IOR bolstered its position as a credible power in the
from both Pakistan and China. In 2024, Pakistan Indian Ocean. This carries significant strategic
launched the first of its eight Hangor II submarines implications for India as it dents into its ‘preferred
at a Chinese shipyard. As these submarines are security partner’ narrative by presenting the IOR
gradually commissioned, they will intensify the littorals with an alternative option.
challenges for India in maintaining maritime
domain awareness (MDA) and underwater domain Policy Recommendations
awareness (UDA).
Enhance Budgetary Allocations Considering
The modernisation of the Pakistan Navy and the
that the navy is the smallest service among the
development of Gwadar Port are integral to the
Indian armed forces and has the least share in
China-Pakistan partnership aimed at securing the
the defence budget, it would remain hard-pressed
Belt and Road Initiative. These developments also
to match China’s naval capability at the current
facilitate an enhanced Chinese naval presence in
levels of allocations which need to be significantly
the IOR, a trend likely to accelerate.
enhanced. IN’s revenue budgetary allocation for
Furthermore, strategic partnerships with China and 2024-25 of Rs 32,778.73 Crore, was 6.97 percent
Turkey could bolster Pakistan’s transformation lesser from FY 2023-24 budgetary expenditure of
into a significant regional naval power, heightening Rs 35,150.53 crores.
India’s concerns and potentially disrupting the
regional balance of power. Pakistan’s efforts to Strengthen Naval Capabilities Expanding
establish a sea-based nuclear deterrent are also and modernising the Indian Navy’s fleet is vital
expected to advance. for maintaining a strong presence in the IOR.

126
 State of the World: Emerging Trends and Way Forward

Investments in indigenous shipbuilding and acquired under a Rs 60,000 crore project. The Next
accelerating defence procurement are essential. Generation Destroyers (NGD), also referred to
as Project-18 destroyer (P-18), a class of planned
Provide for Three Carrier Task Forces India’s stealth guided-missile destroyers and Project-
aspiration to secure its interests and support friendly 17B class stealth frigates, follow-on of Nilgiri
nations in the IOR relies on maintaining a near- class (Project-17A) are also part of IN’s approved
continuous presence. As outlined in the Maritime force accretion plans. All these projects need to be
Capability Perspective Plan (MCPP) 2022-37, the expedited.
Indian Navy envisions the need for three Carrier
Task Forces (CTFs) to conduct simultaneous sea Enhance UDA To counter China’s subsurface
control operations in distinct geographic areas, activities, India must prioritise robust UDA efforts.
This requires deploying seabed sensors, satellite
making a three-carrier force critical for regional
surveillance, unmanned underwater vehicles
security.
(UUVs), and anti-submarine warfare (ASW) assets.
Strengthen Strategic Partnerships Deepening Collaboration with partners like the United States,
ties with key powers such as the United States, Japan, and Australia can enhance capabilities
Japan, and Australia through the Quadrilateral through information sharing, joint exercises, and
access to advanced surveillance technologies.
Security Dialogue (Quad) will help counterbalance
China’s influence. Bilateral agreements with IOR
Enhance MDA India should continue strengthening
nations like Indonesia, Singapore, and Sri Lanka
its MDA capabilities, upgrading systems where
for base access, training, and logistical support can
needed, and fostering international collaboration
extend India’s operational reach. under the IFC-IOR. This will ensure improved
real-time situational awareness and comprehensive
Expedite P 75 I Project 75 India (P-75I), part of
maritime coverage.
a 30-year submarine-building plan envisioned in
1998, aims to deliver six diesel-electric submarines Develop Forward Operating Bases Strategic
with air-independent propulsion (AIP) technology bases in locations like the Andaman and Nicobar
by 2030. However, prolonged delays in the an Lakshadweep Islands are crucial for monitoring
commencement of the project have weakened Chinese naval activities. Upgrading infrastructure,
India’s underwater defence capabilities, making it including runways, docking facilities, and
expedient to expedite the program. communication systems, will enable rapid
responses to maritime contingencies.
Expedite Rafale M, SSNs, NGD and 17B
The acquisition of six nuclear-powered attack Leverage Technology and Innovation Investing
submarines (SSNs), approved by the Government in technologies such as artificial intelligence
almost a decade ago has been stalled. Similarly, (AI), machine learning, and big data analytics
the Rafale M, a naval version of the Rafale fighter will enhance maritime surveillance and decision-
jet, for carrier-based operations, is slated to be making, ensuring India retains a strategic edge.

127
 State of the World: Emerging Trends and Way Forward

By integrating enhanced naval capabilities, • Helicopters and UCAVs: Light Combat

strategic partnerships, and comprehensive UDA, Helicopters, MQ-9 Sky Guardians, MALE
India can safeguard regional stability and assert its UCAVs, and anti-drone systems were
dominance in the Indian Ocean Region. inducted.

Indian Air Force • Radars and Missiles: Medium-Powered

Radars, MRSAM systems, and advanced
Annual Review missiles like Rampage, ROCKS, and Astra
were operationalised. The Pralay missile
International Exercises In 2024, the Indian received induction approval, and trials for
Air Force (IAF) actively participated in major Nirbhay cruise missile are underway.
international exercises amidst global tensions. The
most notable was Exercise Tarang Shakti, India’s Challenges and Setbacks Despite progress,
largest multinational air combat drill, held in two the IAF faced challenges:
phases with 150 aircraft. Phase 1 (August 6–14)
took place in Tamil Nadu, and Phase 2 (August • LCA Mk1A Delays: Hindustan Aeronautics
30–September 14) in Rajasthan. Eleven nations, Limited (HAL) delayed delivery, extending
including the US, France, and Japan, participated the MiG-21 Bison phase-out by a year.
with assets, while 18 attended as observers.
• MRFA Programme Stagnation: Delayed
Other significant exercises included:
decisions have widened the IAF’s capability
gaps.
• Exercise Red Flag Alaska 24-2: IAF Rafale
aircraft showcased India’s aerial capabilities
• Force Multipliers: No progress on contracts
in Alaska.
for Netra Mk II, additional Netra Mk Is, or
• Exercise Pitch Black 2024: Su-30 MKIs air-to-air refuellers.
participated in Australia, enhancing global
interoperability. The delays prompted the government to form a
committee, led by the Defence Secretary, to address
• Exercise Eastern Bridge VII: Held in Oman, these critical gaps.
reinforcing India-Oman defence cooperation.
Implications for India
Equipment Induction The IAF made strides in
modernisation:
Geopolitical Challenges and Regional
• C-295 Aircraft: Induction continued, Advancements The geopolitical environment
supported by a new TASL-Airbus in India’s neighbourhood remains precarious
manufacturing plant in Gujarat. despite the recent Chinese pullback. Instability in

128
 State of the World: Emerging Trends and Way Forward

Bangladesh has added complexity to the region’s • JF-17 Mk III: Production of this advanced
dynamics. Meanwhile, advancements by the variant, featuring AESA radar and enhanced
People’s Liberation Army Air Force (PLAAF) missiles, has commenced, and the PAF
and the Pakistan Air Force (PAF) in 2024 have secured a fourth overseas customer for the
necessitated a reassessment of the situation. aircraft.

PLAAF Developments Emerging Asymmetry The combined

modernisation efforts of the PLAAF and PAF pose
• Enhanced Deployments: PLAAF has
a significant challenge to the IAF, particularly
bolstered its presence in airfields near Eastern
in a potential collusive threat scenario in
Ladakh and across the Tibetan Plateau,
the northern sector. This asymmetry in aerial
deploying modern fighters like the J-16 and
capabilities, especially with advancements in
advanced UCAVs.
stealth technologies and UAV development, could
• Infrastructure Upgrades: Extensive undermine India’s strategic edge in a crisis.
facilities, including additional runways,
hardened shelters, and enhanced fuel and UAV Advancements China has made remarkable
armament storage, have significantly eroded strides in UAV and UCAV development:
the IAF’s advantage of operating from lower-
altitude bases. • Advanced Systems: Deployment of larger
UAVs, UCAVs, and smaller FPV drones.
• Technological Advancements: The PLAAF
conducted flights of its sixth-generation
• Mass Production: A recent order for one
aircraft in enhanced stealth configurations
million loitering drones demonstrates China’s
and ramped up production of J-20 and J-35A
growing capability in unmanned aerial warfare.
fifth-generation stealth aircraft, occasionally
deploying them in the Western Theater
Prognosis for 2025
Command (WTC).

• Aerial Exercises: Extensive joint aerial In 2025, the only anticipated additions to the fleet
training with the PAF has further bolstered are the LCA Mk1A fighters, with additional SU-
operational synergy between the two forces. 30s not expected until 2027. The Medium-Role
Fighter Aircraft (MRFA) programme and any
PAF Developments fifth-generation aircraft, whether indigenous or
imported, are not projected to materialise until
• New Inductions: The PAF added J-10C after 2030. This delay will exacerbate the existing
fighters and Akinci UCAVs, bringing its asymmetry, as both China and Pakistan have well-
squadron numbers closer to parity with the established indigenous fighter programmes capable
IAF. of increasing production.

129
 State of the World: Emerging Trends and Way Forward

Furthermore, China is likely to introduce a • A decision on the Medium-Role Fighter

tanker aircraft based on the Y-20 platform and Aircraft (MRFA) should be made as soon
a new Airborne Warning and Control System as possible.
(AWACS), which may also be supplied to the PAF.
• The possibility of acquiring second-hand
If serious measures are not taken to address these
airframes of Mirage 2000 and MiG-29
developments, India’s conventional air deterrence
should be explored.
could be compromised.
• There should be a renewed emphasis on
Additionally, there are significant asymmetries
AWACS and Air-to-Air Refuelling (AAR)
in the space domain that are expected to
projects.
widen. China is enhancing its Early Warning,
Intelligence, Surveillance, and Reconnaissance • The space sector must be prioritised, and
(ISR), and Electronic Intelligence (ELINT) a Space Command should be established
satellite capabilities. With the extension of its promptly.
Beidou system to Pakistan, China is likely to
provide additional ISR and ELINT support, • Industrial capacities created for indigenous
further complicating India’s strategic landscape. systems like missiles and radars should not
Addressing these imbalances is crucial. remain idle due to a lack of orders; low-
rate production should be initiated to keep
Policy Recommendations production lines active, preventing the need
for restart in a crisis.
Despite the establishment of a special committee led
• The indigenous aero engine programme
by the Defence Secretary to address procurement
should be accelerated.
issues for the IAF, several additional actions are
necessary to enhance the process: • Indigenous UAV and UCAV programmes
should be expedited.
• The Department of Defence Production
should closely oversee HAL to ensure timely • There should be an increase in Maintenance,
deliveries of indigenously manufactured Repair, and Overhaul (MRO) work on IAF
aircraft. aviation assets within India.

• A committee should be formed to monitor • Startups involved in manufacturing loitering

the development work of ADA and DRDO drones and other systems should receive
on the Tejas Mk II and AMCA, ensuring orders promptly after trials to prevent foreign
there are no delays. acquisition.

130
 State of the World: Emerging Trends and Way Forward

Contributors

1. Anand, Dr Shambhavi, Research Assistant 12. Ray, Saudiptendu, Research Associate

2. Bhansali, Umang, Research Assistant 13. Samant, Heena, Research Associate

14. Sanate, Dr Joseph N., Research Associate

3. Bisen, Capt. Anurag, Senior Fellow

15. Sharma, Anurag, Associate Fellow

4. Bishoyi, Dr Saroj, Research Fellow
16. Sharma, Lt. Gen. Rakesh, Distinguished
5. Borthakur, Dr Anchita, Fellow
Research Associate
17. Sinha, Shreya, Research Associate
6. Das, Dr Hirak J., Associate Fellow
(former) 18. Sarada Subhash, Research
Associate, VIF
7. Gandhi, Prerna, Associate Fellow
19. Vasisht, Dr Cchavi, Research Associate
8. Gupta, Dr Pravesh K., Associate Fellow (former)

9. Hangzo, PK Khup, Associate Fellow

Editorial Support
10. Kotokey, Dr Angana, Research Associate
20. Prijit, Ritwik, Research Intern
11. Kumar, Air Marshal Rajesh,
former C-in-C, Strategic Forces Command 21. Srikant, Meera, Research Intern

131