India Risks Losing Global Edge Without Trade & Competitiveness Reforms, Warns Foreign Strategist

If India doesn’t push ahead with internal reforms—in trade, competitiveness and productivity—then its ability to respond to external shocks will shrink, cautioned C. Raja Mohan, Distinguished Fellow at Council on Strategic and Defence Research.

"On trade, India is already in a distinct position. Nobody ever saw India as a “middle-of-the-road” trading nation. That became clear in Trump’s first term and even more so now," Raja Mohan noted. "Unless India reforms its own economy to be truly competitive, the assumption that we can deal externally without changing internally is flawed."

Speaking at the Public Affairs Forum of India’s (PAFI) 12th Annual Forum 2025, he added that India’s post-colonial trajectory has been marked by dependence on others: Russia for weapons, China for manufacturing and imports, and the United States for its political economy. “To acquire real power, we must build intelligence and capability within ourselves,” he stressed.

The panel, titled Turbulence to Opportunity: Delhi between Washington and Beijing, also heard Ashok Kantha, former Indian ambassador to China, underline that a reset in India–China relations is improbable. “There are too many contradictions and too much baggage for that kind of understanding,” he said.

"We are seeking greater stability and predictability in our relations with China. It is our second-largest trading partner. We share a very long border, and there are many reasons why we would want a stable relationship," Kantha added.

His comments came against the backdrop of Prime Minister Narendra Modi’s meeting with President Xi Jinping in China last month, after seven years. On the sidelines of the SCO Summit, both leaders pledged to resolve border issues and strengthen cooperation — a move that drew comment from US President Donald Trump, who speculated on social media whether America had “lost India and Russia to deepest, darkest China”.

"We will seek to improve our relations with China, but any progress will be shaped by the current geopolitical backdrop. But we’re not looking at any reset in India–China ties," Ambassador Kantha added.

As India faced backlash due to its multi-alignment doctrine, Manjeev Singh Puri, former ambassador of India to EU and Nepal, argued that India’s much-discussed “multi-alignment” strategy is inevitable. “India is a G20 country—it cannot remain non-aligned,” he said.

He added that Indian businesses are pragmatic about China. “They don’t want to look away from China, and that doesn’t make them unpatriotic. They understand that some of our growth and opportunities at this stage are still connected there,” Puri explained. “At the end of the day, realism matters. India may become the third-largest economy, but we are still far behind the first two. Our priority must be building our own economy and working both sides of the aisle.”

Echoing this, senior journalist T. K. Arun pointed to the dominance of the US dollar, which, he argued, Washington uses as a weapon as powerful as any military tool. “The conclusion is clear: if you want a genuine alternative to the dollar and to rebalance global power, you need new systems of international settlement — blockchain and crypto being the most viable. But that requires collaboration between large and mid-sized economies like India, Brazil and others,” he said.