Maj Gen Sanjeev Dogra (Retd)
sanjeev662006@gmail.com
On an ordinary evening in an Indian home, geopolitics arrives quietly through routine expenses. A UPI message confirms the school fee payment. The grocery bill is a little heavier than last week. The LPG cylinder booking is due. Petrol has pinched again. Someone mentions that gold is rising; someone else shares that export orders are slowing and imported parts are getting costlier or delayed. No one is trying to discuss foreign policy, yet foreign policy has already entered the household budget.
That is the defining change of our times: diplomacy is no longer distant. A disturbance in a faraway region can raise shipping costs, push up energy prices, shake currencies, and land at our doorstep as inflation. What once looked like a chessboard for states now behaves like weather. Global, fast-moving, and unavoidable.
The world order is shifting, and the effects are now felt by the common man. For decades after the Cold War, many believed that growing trade and interdependence would steadily reduce conflict. It was the liberal assumption that commerce creates habits of cooperation. But the present moment is reminding us of what Realism has always argued: states worry about power and security first, and economic ties do not automatically erase strategic mistrust. When one country strengthens itself, others feel less secure and respond. This is the “security dilemma,” and it explains why tensions can rise even without anyone openly wanting war.
Once tensions rise, the economy follows. Trade routes become risky, insurance costs climb, shipping slows, and energy becomes unpredictable. Economists call these “supply shocks.” For a household, it simply means the same essentials now cost more. Even when local demand has not surged, prices can rise because costs are travelling into the economy from outside like fuel, fertiliser, logistics, imported inputs, and even global sentiment.
This is also why nations are redesigning supply chains. Earlier, the guiding principle was efficiency which was cheapest and fastest. Now, the priority is resilience which is reliable and secure. In policy language, countries are “de-risking” and sometimes “friend-shoring,” shifting production and sourcing toward trusted partners. In daily life, the consequence is visible in delayed deliveries, costlier components, and businesses becoming cautious. A factory owner holds expansion. A trader reduces inventory. A young couple postpones a home loan. These are not dramatic events, but together they shape national momentum.
Security itself has economic consequences. When threats rise, defence spending rises. That spending is essential, but it is never free. Every rupee has an opportunity cost: money spent on one priority cannot be spent elsewhere. Governments must raise resources through taxes, borrowing, or tighter budgeting. Economists warn that excessive borrowing can “crowd out” private investment by pushing up interest rates or absorbing available capital. So the citizen can feel the impact twice. First in market prices and then in a tighter financial environment.
Currency movements add another layer. Capital dislikes uncertainty and often moves quickly toward perceived safety. If the rupee weakens in such periods, imported essentials become costlier. This is “exchange rate pass-through” where the fall in currency value shows up as higher prices for fuel, machinery, chemicals, and many other inputs. Eventually it reaches the common man as inflation, because businesses must pass higher costs forward to survive.
Gold rising in uncertain times is another familiar signal. In economics this is “flight to safety.” Families instinctively hedge: they hold back discretionary spending, avoid risk, and prefer assets that feel secure. Individually, this is sensible. Collectively, it can slow consumption and investment, especially if uncertainty persists.
Jobs, too, are deeply exposed to geopolitics. A factory hires on orders, not speeches. When export markets soften, or when tariffs and logistics costs squeeze margins, hiring slows. Trade wars strike at a classic idea of the comparative advantage. In principle, countries specialise and everyone gains through trade. But when trade becomes weaponised and tariffs rise, those gains shrink and uncertainty expands. In India, this can translate into fewer new hires, cautious wage growth, and delayed projects, especially in sectors tied to global demand.
So where does India go from here?
First, we must accept that national power today is layered: military, economic, technological, and diplomatic that too often all at once. The biggest vulnerability is not disagreement; it is dependence. When a nation depends too heavily on a single source for energy, critical technology, finance, or strategic materials, it becomes easier to pressure. This is why strategic autonomy matters not as a slogan, but as a practical survival approach. It means building diversified partnerships and preserving options.
Second, India must understand the balance-of-power logic without being trapped by it. Balance of power is not merely about rivalry; it is about preventing coercion. When a country has alternatives like multiple partners, multiple routes, domestic capacity and credible defences it becomes harder to corner. Deterrence, in the modern sense, is not only military. It is also economic and technological: the ability to withstand pressure without panic.
Third, economic stability must be treated as national security. Foreign exchange reserves, fiscal discipline, and stable inflation are not just economic terms; they are shields. In an open economy, capital flows can react faster than policy. Frameworks like Mundell-Fleming (which explains how interest rates, exchange rates, and capital movement interact) remind us that credibility and stability reduce shocks. A country that manages its deficits prudently and builds buffers faces smaller tremors when the global environment turns rough.
Fourth, resilience must be built at home. That means diversifying energy sources, strengthening logistics, investing in storage and transport, and creating robust supply chains for critical items. It also means building manufacturing ecosystems that can scale when imports become uncertain. This is where “self-reliance” should be understood correctly: not isolation, but capability. Not closing doors, but having strength behind the door.
Our ancient thought fits this moment. Kautilya wrote with clarity because statecraft demanded realism. Thucydides observed how fear and insecurity can shape rivalry even when prosperity exists. Across civilisations, the lesson is consistent: values matter, but capability protects values. Prosperity and security are twins. Strength protects prosperity; prosperity funds strength.
If the central character of this story is the common man, policy should be judged by one simple test: does it increase India’s options in a crisis, or reduce them? Increasing options protects citizens. Reducing them exposes them.
The guiding idea for the coming decade should be prosperity with protection built on fiscal prudence and foreign exchange buffers. It should also include diversified trade and resilient logistics, competitive MSMEs and job-rich growth, Aspects of strategic defence modernisation and indigenisation, energy security through diversified sources and renewables, and technology resilience in critical infrastructure and supply chains are also essential.
The citizen does not need to become a diplomat or an economist. He only needs to recognise that his future is now tied to the world more directly than before and that wise foreign policy is not a luxury; it is protection. If India keeps its economic engine strong, its partnerships diversified, its security credible, and its domestic priorities intact, it will not merely endure this transition. It will shape it.
And the biggest beneficiary will be that ordinary family, the one that began the evening with a UPI ping, a grocery bill, and a quiet question: “Why is everything becoming so uncertain?”
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