Geopolitical Fracture And The Rewiring Of Global Trade – OpEd
When Washington tried to strong-arm New Delhi with punitive tariffs, India did not bend. Instead, it doubled down on self-reliance, diversified its markets beyond the United States, and emerged as a far larger export power than its critics had imagined. Today, the Ministry of Commerce’s export tables, the Ministry of Finance’s fiscal surveys, and global assessments from consultancies and think tanks converge on a single story: the fracture of global trade is not India’s loss, but India’s opportunity.
In fact, I had argued in my own Eurasia Review column a few months ago that America’s attempt to squeeze India with tariffs would end up creating the opposite effect. By trying to bully New Delhi, Washington would push India toward a harder embrace of self-reliance. That defiance, I wrote then, would not be a setback but a springboard: an opportunity for India to diversify markets, scale exports, and claim a firmer place in the world’s trading system. Today, the data pouring in from the Commerce and Finance Ministries bears that prediction out.
The rupture in trade flows that defines this decade did not begin in Delhi or Hanoi, but in Washington. As the United States widened its tariff arsenal — first against China, and then against India’s steel, aluminium, and technology services — it expected compliance. Instead, the Modi government drew a line. There would be no capitulation. The Ministry of Commerce’s 2024 report showed how India responded: by expanding bilateral exports with ASEAN, Africa, the Gulf, and Europe. Far from wilting, India’s export base reached an unprecedented $820 billion in goods and services in FY 2024–25, according to the Ministry of Finance. This was muscular diversification, not fragile growth. McKinsey, PwC, and NITI Aayog now note that India’s breadth of export partners has expanded faster than any other G20 nation.
When I spoke recently with a senior official in the Ministry of Finance, he underlined that the $820 billion export figure was not just a number on paper. It represented new shipping lanes to Africa, contracts inked in Gulf ports, and hundreds of smaller exporters filing returns for the first time. The Commerce Ministry’s own resources show that between 2019 and 2025, the number of active exporters has risen by nearly 40 percent — a statistic rarely highlighted in headlines.
The context is crucial: China’s share of US imports has plunged from about 18 percent in 2017 to barely 9 percent by mid-2025, according to China’s customs data. In the same period, Chinese shipments to the US in August 2025 collapsed by 33 percent year-on-year. The vacuum has not remained empty. Mexico, Vietnam, and India have absorbed the trade. Reuters reports that despite a tariff-induced dip in August shipments, India’s US exports over April–August 2025 still rose to about $40.39 billion, underscoring resilience. NITI Aayog further argues that the very tariff gaps created by Washington have made Indian products more competitive vis-à-vis China, Mexico, and Canada.
Diversification has now become doctrine. Five years ago, nearly a fifth of India’s merchandise exports were America-bound. That proportion has narrowed deliberately. The Gulf and ASEAN absorb India’s energy and engineering goods; Africa has emerged as the fastest-growing frontier for pharmaceuticals and two-wheelers; and Europe has been tied into long-term compacts such as the India–EFTA TEPA. The agreement promises $100 billion in pledged investment over 15 years — an unprecedented bundling of tariff relief with capital inflows. Meanwhile, the UAE CEPA has lifted gems and jewellery exports by more than 30 percent within three years. This is not accidental, but a design born from India’s refusal to remain tethered to any one power centre.
The smartphone story symbolises the new arc. Barely visible a decade ago, India exported over ₹2 lakh crore worth of smartphones in FY 2024–25. Apple alone assembled $22 billion worth of iPhones locally. Deloitte and PwC concur that India’s electronics value-addition has risen from about 12 percent to nearly 20 percent in three years, with official targets set at 35–40 percent by 2028. The ecosystem of printed circuit boards, camera modules, and precision enclosures has begun rooting itself. What began as tariff defiance has become industrial depth.
I recall a Commerce Ministry source telling me that this was the first time in memory that auto-components had swung into surplus — “a psychological turning point” was how he phrased it. The Finance Ministry’s quarterly bulletin quietly carried the same data: India now sells more parts to Detroit and Stuttgart than it imports from Shanghai.
Other sectors are quietly showing the same pattern. India’s auto components industry logged a trade surplus in FY25, with exports rising to about $23 billion, overtaking imports for the first time. The Ministry of Commerce’s annual report confirms that the overall trade deficit has improved from $121.6 billion in 2022–23 to $75.5 billion in 2023–24 — a 38 percent correction. These are not marginal numbers but structural shifts.
Even as America’s share of Indian exports narrows, India has gained in Africa and the Gulf. From Nairobi to Lagos, Indian engineering goods, solar technology, and affordable medicines are carving space. The Ministry of Finance calls Africa India’s ‘next frontier’ in its 2025 mid-year economic review. This is echoed by PricewaterhouseCoopers’ outlook, which forecasts that India’s exports to Africa could double within the decade. In parallel, Southeast Asia has become both a market and a partner: Vietnam and Indonesia are not merely conduits for Chinese rerouting, but active collaborators with India in electronics and energy.
Services, though less glamorous than goods, remain India’s silent surplus. IT, fintech compliance, design, and clinical data services consistently cushion trade volatility. The Ministry of Finance estimates an additional $50 billion in surplus by 2028. PwC calls India’s services trade ‘the invisible ballast’ that stabilises the ship even in stormy seas.
History rhymes here. Colonial India was shackled to monocultures; the IMF’s diktats in the 1990s bound liberalisation to external whims. Today’s India has seized autonomy: it is neither autarky nor subservience, but strategic self-reliance. By refusing to bow to tariff bullying, India has asserted sovereignty. By diversifying exports, it has widened opportunity. By leveraging services, it has built stability.
As someone who has tracked India’s trade story for three decades, from the shock of liberalisation to the new swagger of self-reliance, I sense a distinct change in tone within North Block. The Finance Ministry no longer explains away deficits; it talks about strategy. That change of vocabulary is itself a measure of India’s arrival in this rewired world.
The fracture of global trade has left many nations scrambling. China is bleeding market share in the US, its shipments plunging even as it reroutes through Southeast Asia. The US is struggling with higher consumer prices and uncertain supply chains. India, by contrast, has emerged as a net gainer. For the first time since independence, it is not merely a waypoint but a commanding node in the global network. The Ministry of Commerce’s ledgers, the Ministry of Finance’s surveys, and reports from McKinsey, PwC, and NITI Aayog all agree: India has turned adversity into advantage.
This is the self-reliance dividend. The world is redrawing its map of trade. India, at long last, holds the pen.
When America tried to bully India with tariffs, New Delhi charted its own course. Data from the Ministry of Commerce and Finance, reinforced by PwC, McKinsey, and NITI Aayog, show that India not only withstood the shock but converted it into a dividend of self-reliance. The fracture of global trade has become the foundation of India’s rise as a commanding node in a multipolar world.
This trajectory also finds resonance in comparative data: while China’s share of global exports has begun to decline from its 2020 peak of nearly 15 percent to around 13 percent by 2024, India’s share has inched upward. The WTO’s 2025 monitoring report observed that India now accounts for close to 2.4 percent of world merchandise exports, up from barely 1.6 percent a decade earlier. This incremental rise is not cosmetic; it reflects the cumulative effect of diversified markets, improved logistics, and tariff-defying resilience. In essence, India is beginning to do what China did in the early 2000s: translate political will and demographic scale into lasting commercial heft.
Manoranjana Gupta
Manoranjana Gupta is a Journalist, TV opinion leader, and a Special Advisor for GDKP in India, at the Center for Digital Future, Annenberg School of Communication and Journalism under the University of Southern California.
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