THE TRIBUNE

APLN member Shyam Saran, former Foreign Secretary of India, wrote for The Tribune and argued that India should pursue deeper regional trade integration, explore greater strategic coordination with Asian partners such as Japan, South Korea and Australia, and build economic and contingency resilience against potential global financial shocks.

Our world witnessed unprecedented changes in 2025. Some may be ephemeral like a flood in a river which dissipates once the rainy season has passed. But at times there may be a massive surge in its waters that changes the course of the river and takes its flow in a different direction. There is little doubt that the world crossed such an inflection point in 2025 with multiple drivers rearranging the global landscape. Despite the fluidity inherent in these changes, is it possible to imagine the shape of things to come in 2026 and beyond?

We are squarely in an era where the line separating geoeconomics and geopolitics has been mostly erased. This line was never rigid and there were occasions when countries, particularly powerful ones such as the US, used economic levers for geopolitical ends. But these were exceptions while global trade and investment in general followed well-established rules and also norms which may have been unwritten but sanctioned by long usage and observance.

National security considerations now influence the trade basket and the direction of trade and investment. This trend began amid the crisis triggered by the shortage of drugs and medical devices during the Covid-19 pandemic of 2020-21. Considerations of efficiency gave way to notions of resilience. “Just in time” made way for “just in case”.

Friend-shoring, near-shoring and on-shoring reoriented the direction of investment from the economically most competitive destinations to the most reliable ones. This opened the door to the widespread use of industrial policies. The year gone by was significant as the world’s largest and most powerful economy as well as the biggest consumer market, the US, decided to go unabashedly mercantilist. It used economic levers, such as access to its market, to obtain both economic as well as geopolitical objectives.

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