A new consensus in Indian foreign and strategic policy thinking has emerged over the past year. It holds that, despite various proclamations, India is not yet a great power, and that its status as a rising power should not be taken for granted either.
Accordingly, India should focus on costly reforms to establish the long-term foundations of power, rather than limiting its policy options to short-term diplomatic or strategic moves. If anything, these priorities require greater restraint and caution in foreign policy, rather than expansion or overt great-power assertion.
Whereas the evolving foreign policy consensus in the US has, understandably, hogged much of the attention in recent months, what is more easily missed is a parallel shift in India’s own broad policy framework, toward what can be termed ‘post-exuberance realism’. As a country’s foreign policy environment becomes more contested and multi-dimensional, it is only logical that its strategic culture adapts accordingly. The shift, therefore, is unsurprising.
The external drivers of post-exuberance realism
As argued earlier, shifts in key equations among the great powers, and in their respective equations with Delhi, have left India occupying a much diminished geopolitical sweet spot from which to bargain. As External Affairs Minister S Jaishankar has argued, changes in the global order have made India’s relationships with the system’s major powers — China, Russia, and the US — far more challenging and complex than they were in 2019. Indeed, 2025 proved to be a sobering year for Indian foreign policy. It saw China’s ‘DeepSeek’ moment and a growing appreciation in India of Beijing’s breakneck ascent toward superpower status. In particular, China demonstrated its ability to threaten industrial supply chains in the US, as well as key sectors of the Indian economy, through its still-evolving and coercive rare-earth export control licensing regime.
The year also saw Washington brusquely abandon India-US strategic convergence and pivot toward a softer reconciliation with China, driven by economic rationale but carrying strong strategic implications for Asia’s future. Trump’s trade war against India further exposed New Delhi’s limited stock of deployable geo-economic leverage vis-à-vis both China and the US. As external bottlenecks have hardened, India has been forced to finally confront internal constraints, evident in recent efforts to boost domestic demand and push labour law reforms.
Meanwhile, India was also confronted with the extent of the maturation of the China-Pakistan strategic and defence relationship in May last year, during Operation Sindoor — something that had faded from public consciousness since 2019-20. China’s continued infrastructure development along the LAC, combined with its growing economic leverage over India, has enabled Beijing to underwrite trilateral cooperation with Afghanistan and Bangladesh, with Pakistan on its side in both cases. The emergence of Turkey as a military ally and defence supplier to several states in the Indian Ocean region has not escaped attention either. Together, these developments necessitate a sober reckoning with the structural weaknesses in India’s armaments policy, as well as a measure of military restraint in the short term. India’s Chief of Defence Staff, General Anil Chauhan, appeared to allude to this last week when he emphasised the need to avoid “attritional warfare” amid increasing geopolitical uncertainty.
These setbacks — hard to brush aside — are now seen as more than merely fortuitous, possessing instead a deeper structural basis. As a result, India today has far less manoeuvring room in the conduct of foreign policy than it did five years ago. The experience of Operation Sindoor has underscored the urgency of building up military capabilities with greater reference to the growing strength of adversaries, rather than to self-referential constraints or past achievements. India has also felt the consequences of remaining outside key global supply chains, and has realised that its ability to participate in the fourth industrial revolution, and to benefit from China Plus One opportunity, is constrained by its own domestic bottlenecks, both administrative and economic.
A broader meaning has also been acknowledged: that India’s time has not yet come — contrary to the title of Alyssa Ayres’ 2018 book Our Time Has Come — and that its eventual destiny as a great power is far from guaranteed without high costs and risks, adroit statecraft, and carefully curated investments sustained over many years, if not decades. After a decade of robust growth, Indian society, along with its well-wishers abroad, conflated hope with belief, projecting India as a near-great power. One is reminded of then-President Barack Obama’s 2010 visit, when he happily declared that India was no longer “emerging” but had already “emerged”. Such praise, after all, was meant to nudge India toward embracing a greater pan-regional role in the Indo-Pacific, in partnership with the US and its allies.
After exuberance, India must now not only take difficult and costly steps toward industrialisation, but also convert growth into geo-economic leverage and military modernisation. This realisation stands in contrast to the meta-policy framework of the past few years, yet is influencing policy planning. This perfect storm of altered assumptions and assessments — from foreign policy to defence priorities to emerging geo-economic realities and their relationship to ‘domestic capacity’ — marks a significant intellectual shift that is guaranteed to endure, even if it remains incomplete.
Also read: US invasion of Venezuela is end of international order. India must focus on cold calculations
Signs of the new consensus
The signs of this shift toward a new consensus are now visible across op-eds, think tank reports, roundtable discussions and popular podcasts. Jaithirth Rao, a well-known free-market proponent, calls for a qualified acceptance of the statist Friedrich List, rather than Adam Smith, and for a relook at Nehruvian planning (with some discomfort, of course), in light of defence and strategic imperatives. At the core of this argument lies the case for supporting strategic industries in times of global uncertainty and looming conflict.
The link between domestic economic debates and military power is now an increasingly recognised correlation, given that growth rates do not automatically yield military power. Lt Gen Raj Shukla (retd), while appreciating India’s recent defence policy innovations, has described them as largely “tinkering”, falling short of what is needed, which is transformation beyond measure and a full embrace of civil-military fusion for future warfare.
Veteran diplomat Vivek Katju has similarly noted that India’s self-congratulatory discourse has contributed to near-intractable foreign policy challenges, not least in its dealings with the Trump administration. Chinese analyst Mao Keji echoed this view in a Substack blog that has since gone viral in India, a rarity for a Chinese scholar with a critical analysis, something that would have been unthinkable until recently.
Toward the end of the year, increasing attention was also paid to Turkey’s ascent in global and regional politics, driven in large measure by its impressive defence industrial base. This has enhanced Ankara’s influence across the Indian Ocean region and into Southeast Asia, raising uncomfortable comparisons with India’s own limited efforts to expand influence through military sales and security assistance. Foreign policy analyst C Raja Mohan underscored one of the key realisations to have crystallised in 2025: “The focus has to be economic. Unless you accelerate your internal transformation. The goal of Viksit Bharat cannot be achieved by clever diplomatic play”. Military veterans and foreign policy analysts appear to converge on what the guiding security goal should be — military overmatch vis-à-vis Pakistan in service of ‘compellence’ and asymmetric deterrence against China’s growing military presence along the LAC. Deterrence itself is spoken more in terms of conventional warfare capabilities than signalling alone.
Meanwhile, Trump’s tariffs pressure had led to a sudden breakthrough consensus that India must ditch protectionism, despite the global drift in that direction, and return to the almost forgotten agenda of structural reforms. These are seen as essential to unlocking manufacturing, generate jobs, and integrating India into global supply chains. Economists, CEOs, journalists, and analysts, including Rajat Kathuria, Shekhar Gupta, Manish Sabharwal, Sandeep Bharadwaj, and Ha-Joon Chang, have reinforced this argument through their analyses of India’s trade negotiation strategies, its endemic fear of free trade, the causes of still-pending industrialisation, and the need for specific reforms and course correction.
Such commentary and their resonance is striking for a few reasons. First, there appear is a growing agreement among thought leaders not only on what needs to be done, but also on how these prescriptions reinforce one another at the conceptual level. External pressures strengthen the case for free trade, domestic structural reform, and long-term defence planning anchored in a growing civilian industrial base. These, in turn, require a foreign policy that prioritises regional stability and restraint. All the pieces, in other words, hang together.
As crucially, the prescriptions are neither convoluted nor fanciful, but gravitate towards established knowledge (think structural reforms for instance) that had been merely sidestepped under the sheen of the ‘leading great power’ thesis and a more benign strategic environment. Such a consensus should be prized and built upon. This is because without the same, India may gradually succumb to a form of policy paralysis, unable to make sense of layered and intertwined systemic challenges.
Hence, at this point it is key that the shift and the core differences between the old consensus and the new consensus is spelt out and to discern the degree of both disruption as well as relative continuation.
At the heart of the gradual shift towards the new consensus lies three key calibrations:
Power and perceptions: The previous consensus of exuberant realism (2012-2025) held that India is a leading power or a near-great power. This led to the logical inference that India needed to overcome its traditional reflex of moralistic restraint and adopt a more assertive posture and policy framework on the regional and global stage. Relatedly, India also needed to pursue identifiable markers of ‘great powerness’ to signal, both domestically and externally, that expectations had changed and countries needed to adopt to a new reality. This reflected a stronger attachment to the pursuit of status.
It was assessed that perceptions of greater power beget more power – creating a virtuous cycle. This view is captured well in Manjeet Pardesi’s view of the three parameters that had made India a great power in 2015, “the presence of security-related and economic interests outside of a state’s home region, the requisite capabilities, and the demand for this status and its acceptance by other great powers and the regional states”.
In the new consensus, India is still some distance away from great power capabilities – and hence status. The material aspects of power (supply chains, manufacturing ecosystems, defense industrial base, usable leverages) are emphasised more. The sequence preference is more Deng Xiaoping than Kaiser Wilhelm – Build power before spending it. Furthermore, the pursuit of status based on insufficient internal development attracts greater troubles abroad, while diverting attention and focus from the pursuit of real capabilities to a degree. It is more rewarding to be powerful, than to feel powerful.
International order, conflicts, and interest: The previous consensus emerged in the context of a still unipolar and relatively stable U.S. led world order. India’s sweet spot as a swing state between a positively dispositioned U.S. and a rising China created significant manoeuvring room for ‘playing both sides’ for greater dividends. Within this international system, growing divergence among established great powers created ‘rooms for opportunity’ that could be cleverly exploited by ‘middle powers’ in an increasingly ‘multipolar’ world. Hence, Indian foreign policy very often drifted towards ‘positional’ diplomacy; a form of skilful and clever diplomacy that works as long as the other players in the ‘game’ have a significant interest in playing it.
The new consensus sees India enjoying little to none manoeuvring room in the emergent bi-multipolar order. Rather than opportunities that could be used to hasten India’s ascent to great power status, global conflicts are now increasingly recognised as sources of constrain on India’s rise (Think both Russia-Ukraine war as well as the ongoing U.S.-China trade war). As the world becomes more fluid and multipolar it becomes more conflict prone, requiring India to prepare material defences more urgently than previously assessed and without relying on a perceived geopolitical advantage-spot. This also implies calls for a Foreign Policy that is more tempered, advocates peace at the global stage more forcefully and suggests restraint vis-à-vis adversaries without signalling weakness. A significant and transformative defence build-up will require a diplomacy of assurance rather than assertion.
Domestic bases of power and foreign policy: In the previous consensus, it was largely assumed that India’s power fundamentals – a large population, nuclear weapons, high growth rate and a slew of targeted policies aimed at generating business enthusiasm and manufacturing growth — are secure and would propel ittoward great power status. Structural reforms were seen as optional and political risks were best avoided.
There was also a belief that India’s pockets of technological success could be combined with its geopolitical sweet spot and partnership with like-minded states to ‘leapfrog’ into leadership positions in future industries. In the new consensus, the linkages between domestic bases of power (manufacturing, defence industry) and foreign policy outcomes are understood and emphasised more. There is greater concern with operational aspects of power, rather than its more theoretical formulations. Hence, foreign policy analysts as well as military veterans are increasingly taking an interest in economic matters and vice-versa.
India will find it extremely challenging to ‘leapfrog’ to future industries without establishing a more traditional manufacturing ecosystem at home. The new consensus emphasises that India’s trade troubles with the US and military insecurity vis-à-vis Pakistan and China call for ‘more things to be done at home’ rather than in either firmer strategic alignment (ruled out tentatively) or greater positional politics among great powers (including improving ties with a now domineering China).
This systemic consensus-shift was a long time coming, is valuable and probably the best thing that could happen to India and its well-wishers this year. The old consensus had led to many advancements. It had fostered a focus on emerging and critical tech (semiconductor, rare earth minerals, green energy, Quantum computing, AI), introduced notable defence reforms (Atmanirbhar Bharat or indigenisation, theaterisation, the position of the Chief of Defence Staff, corporatisation of OFB) and unlocked several Foreign Policy pivots that enhanced India’s status, bargaining powers and habits of cooperation with like-minded partners (Indo-Pacific, DTTI, iCET, Mineral Security Partnership, Quad and SCO memberships). It had established a broader vision for India’s goals and ambitions and in a way that enjoyed widespread support from all sections of society.
However, the dividends from many of the same initiatives remained constrained by systemic internal deficiencies that remained beneath the surface and escaping resolution. The new consensus seeks to preserve these ambitions through greater realism (without exuberance and romanticisation) and cooperation internationally, a more domestic focus on nation-building prior to assertion at the world stage as well as the emotional choice of delayed gratification over immediate status enjoyment.
If the consensus is strengthened, it is likely to have a systemic and permeating impact on India’s policy planning across domains. A more mature understanding of power will encourage better policy design – tailoring means and ends with sensitivity to long-term buildup of power rather than short-term impact. It will also make India a better economic and defence partner, amid growing pragmatism and the realisation that New Delhi needs its like-minded partners more, not less — think the EU, South Korea and Japan. India’s efforts to repair ties with Canada, undertake FTAs, cultivate Europe, stabilise economic linkages with China, and manage Trump’s America without mutual recrimination are all indicative of this shift.
India may have felt more powerless in 2025 than at any time since 1991. But history shows that New Delhi has often got its act together when its back has been against the wall, rather than when it has enjoyed sufficient growth rates and a ‘safe’ external environment.
Sidharth Raimedhi is a Fellow at the Council for Strategic and Defense Research (CSDR), a New Delhi-based think tank. He tweets @SidharthRaimed1. Views are personal.
(Edited by Aamaan Alam Khan)