As 2026 nears, can India steady itself in a fragmenting world economy?

Russian energy, has also agreed to meet some of its demand from the US. Yet Russia remains relevant, having worked around the trading system through bilateral deals and its shadow fleet.On the other hand, Washington's attempts to derail China’s economy have largely fallen flat.

Beijing continues to run a trade surplus despite tariffs, and the emergence of Chinese chip manufacturing capacities underscores how hard it is to dilute China’s dominance.Policymakers also face a moral dilemma: backlash against cheap Chinese exports could raise consumer costs. For India, the way forward lies in strategizing its breakthrough among dominant economic powers, not only as a market but also as a supplier.Technology partnerships could help India reduce its dependence on the US-China duo.

Such partnerships have already been signed with the EU and Japan, but the longer-term challenge will be retaining intellectual capital, something the EU itself struggled with due to overzealous regulation. How India navigates its energy and technology challenges will shape the decades ahead.In the near term, observers of the Indian economy must watch the trade deficit and the depreciating rupee.

Through October, lower average crude prices were offset by volatility in non-oil trade. At the same time, foreign portfolio investors have been selling equities and although domestic investors have cushioned the sell-off, the pressure on the exchange rate is evident.Conventional wisdom suggests a weaker rupee boosts exports, but India’s own experience does not support this for merchandise trade—depreciation may help only specific sectors.