What are India’s diplomatic headwinds in 2026?: Explained

The story so far:

The spirit of 2025 for India’s foreign policy was “shock and surprise” in many ways, as the Narendra Modi government faced unexpected international challenges from various angles. At the end of a tiring year, what were the global stories that impacted India the most and what are the challenges and opportunities for the South Block in 2026?

What were the biggest global stories for India this year?

There is no doubt that the most important foreign policy story of the year comes from Washington, where Donald Trump was sworn in for a second term as President in January. Mr. Trump’s policies have shaken the multilateral economic system with “Liberation Day” tariffs that have destabilized the world order. With his shifting policies toward Russia and China, once cited as the greatest threats to America, Mr. Trump has shaken America’s closest alliances in Europe and the Indo-Pacific. He also lowered global discourse to a new low with his harsh treatment of world leaders, even as he ordered them to be obedient in his quest for the Nobel Prize for “resolving eight wars.”

While US elections had the biggest impact, the rise of far-right politicians, from European Parliament elections to Japan and Chile, heralded the rise of conservative and xenophobia. Meanwhile, the decline in oil prices due to the overproduction of OPEC countries points to some worrying trends towards renewable energy in the fight against climate change. Global growth is projected to slow from 3.3 percent in 2024 to 3.2 percent in 2025 and 3.1 percent in 2026.

Russia’s war in Ukraine has continued for a fourth year, but for the first time India faces serious economic consequences from buying Russian oil, with EU and UK sanctions on India-Russia joint venture Nayara Energy and US sanctions on Russian oil majors.

Israeli attacks on Gaza continued, killing more than 70,000 people, including 20,000 children, but an American-backed ceasefire agreement at the end of the year offered some hope. However, India’s plans for the India-Middle East Economic Corridor came to a halt, and the Modi government’s refusal to criticize Israel for attacks on Iran in June caused awkward moments in the Shanghai Cooperation Organization (SCO) and the BRICS group, of which Iran is a member. On a closer look, turmoil in the region has continued, with conflict with Pakistan, Gen Z protests toppling the government in Nepal, and mob violence turning anti-India after the killing of a right-wing leader in Bangladesh, raising a question mark over the effectiveness of India’s “Neighborhood First” policy.

What made Trump’s challenge most difficult?

The changing world view of the USA was also keenly felt in the South Block, where the headquarters of the Ministry of Foreign Affairs (MEA) is located; Expectations that Mr. Trump would pursue a pro-India foreign policy were cut short by his actions. Mr. Trump first imposed a top 25% tariff and a 25% surcharge on India’s purchases of Russian oil. Crackdown on immigration, H-1B visas, student visas and deportation of illegal immigrants in India, It led to criticism of MEA in India. Mr. Trump’s repeated claims that he brokered an Operation Sindoor ceasefire, hosted Pakistan’s leadership at the White House and cleared F-16 materiel have damaged New Delhi’s campaign against cross-border terrorism from Pakistan. The perception that Indian diplomacy had failed during the conflict led to tensions with Türkiye, Azerbaijan and Malaysia, which were perceived to support Pakistan. External Affairs Minister S. Jaishankar has been criticized for the decline in India-US relations; This is despite the fact that Mr. Jaishankar has made at least six trips to the United States since Mr. Trump was elected.

What were the diplomatic achievements of 2025?

Indian diplomacy has achieved some notable successes, including a turnaround in relations with Canada, which have spiraled since 2023 over allegations that India oversaw the assassination of a Khalistani separatist there. Mr Modi visited Canada to participate in G-7 outreach activities and agreed with new Canadian Prime Minister Mark Carney to put aside their differences.

The unusual attack was carried out against the Taliban, long considered a terrorist group that seized Kabul by force in 2021 and has been targeting Indian diplomats and projects for decades. Relations improved rapidly after a meeting between the External Affairs Minister and Taliban Foreign Minister Amir Khan Muttaqi in early 2025, and Mr Jaishankar extended full national honors and a warm welcome to Mr Muttaqi in Delhi in October. Both sides escaped the embarrassment of the Taliban leader’s men-only press conference after Mr. Muttaqi held a second, more inclusive press conference; But the government will have to deal with claims that it has improved relations with Afghanistan by appeasing a restrictive and brutal anti-women regime. However, the decline in Afghanistan-Pakistan relations and violent conflict came as a boost for Indian strategists as India faced the “two front” problem that it normally faces with China and Pakistan.

New Delhi has continued its rapprochement with Beijing, which began when Mr Modi and President Xi Jinping met in October 2024; It reopened the Kailash-Mansarovar pilgrimage, resumed visas and flights between the two countries, and resumed sharing of water data. Despite China’s strong diplomatic and military support to Pakistan during Operation Sindoor, Mr Modi, Mr Jaishankar and National Security Adviser Ajit Doval visited China to attend SCO meetings.

Although its ties with some neighbors have frayed, New Delhi has strengthened ties with Bhutan, Sri Lanka and the Maldives, which Mr. Modi visits in 2025.

India’s support and $450 million aid to Sri Lanka following Cyclone Ditwah, which killed more than 600 people, was particularly appreciated.

What to expect in 2026?

Diplomats and trade negotiators spent much of 2025 working on bilateral trade agreements, with BTAs signed with the United Kingdom, Oman and New Zealand. However, larger agreements with the US, EU, Australia, EAEU (Eurasian Economic Union), GCC (Gulf Cooperation Council), ASEAN and others are still pending, with some progress expected in early 2026.

EU Commission and Council Presidents Ursula Von Der Leyen and Antonio Costa are expected to be guests at the Republic Day in January, where the India-EU free trade agreement is expected to be concluded. New Delhi will be closely monitoring the results of the elections in Myanmar (December 28), Bangladesh (February 12) and Nepal (March 5), each of which will have consequences for the South Bloc. In February, India will host the Artificial Intelligence Summit, where more than a dozen international leaders, including French President Emmanuel Macron, are expected. In March, Canadian Prime Minister Carney is expected to visit to discuss trade, critical minerals and nuclear energy.

All eyes are on whether Mr. Trump will finally travel to India for the Quad Summit, which New Delhi has been unable to host for two years, and possibly to China for the APEC summit. Later in the year, BRICS leaders, including Russian President Vladimir Putin and Chinese President Xi, will be invited to the BRICS Summit. Mr Modi will be invited to the G-20 Summit to be held at Trump’s estate in Miami in December, on the heels of crucial US midterm elections. After a year of geopolitical turmoil in 2025, Indian foreign policymakers will hope for a New Year with fewer surprises and a more realistic and sober assessment of India’s diplomatic options.

It was published – 28 December 2025 02:31 IST