Why Indian Firms Must Strive for Strategic Autonomy in Their Geoeconomic Strategies

Geopolitics, Economics, and Geoeconomics

In the evolving global trading and economic system, firms and corporates are impacted as much by the economic policies of nations as they are by the geopolitical and foreign policies.

In other words, any global firm wishing to do business in the international sphere has to be cognizant of both the economic policies of the target countries and the origin countries as they must be towards the geopolitical strategies.

This is especially the case in the post 911 world where geopolitics and economics combine to form what is known as Geoeconomics or the practice of diplomacy and foreign affairs keeping in mind the economic forces at work.

For instance, Iran has been the subject of sanctions from the United States in recent months and the US has barred firms from transacting business with it.

However, this has not deterred the Indian Firms, particularly the Indian Oil Companies wherein they have chosen to exert their independence and neutrality to circumvent the sanctions and continue operating there.

Thus, it is the contention in this article that Indian firms must aim for strategic autonomy and position themselves in such a manner where they are equidistant from the strategies of other international powers and consequently, pursue business strategies that are governed by a strong streak of autonomy.

Why Indian Firms Must Pursue Strategic Autonomy

Continuing the discussion, it is worthwhile to note that Strategic Autonomy as far as Geoeconomics is concerned cannot be conducted in a Vacuum or be independent of the governmental actions and policies.

Indeed, considering the fact that Geoeconomics means that geopolitics too needs to be taken into account, it is the case that Indian firms must choose to act in concert with the Indian government.

This can be seen in the way the Indian Defense Ministry and Foreign Affairs Ministry have chosen to do business with Russia irrespective of some sanctions on it by the US.

Indeed, given the close linkages between Russia and India, especially where arms purchases are concerned, it goes without saying that the Indian government is encouraging the Indian firms to be independent in their approach and put the interests of the country and theirs as well before considerations about what and how their business interests elsewhere are impacted.

In other words, the Indian government is actually telling Indian firms to balance their commitments with the US and other great powers so that they do not lose out in the bargain.

Need to Balance Economic Interests Worldwide

This is illustrated by the examples of some Indian Firms have chosen to desist transacting business with Russia and Iran due to the risk of jeopardizing their business interests with the US.

Indeed, given the fact that Indian Firms do have significant operations around the world, they do need to take a call on prioritizing which comes first when they transact commercially.

Moreover, the latest round of trade wars is another example why India and Indian Firms ought to pursue Strategic Autonomy.

With the US and China engaged in a “no holds barred” contest of levying tariffs and penalties against each other, India should avoid getting caught in the crossfire. On the other hand, it cannot sit idly by while its exports dwindle and its imports increase.

This is the reason the Indian Government in recent days has levied tariffs on some goods imported from the US without engaging in Rhetoric and striking a balance between the interests of staying aligned to the US and China at the same time.

What all this means is that Indian firms must take the lead here and follow the example of many emerging and even developed nations where their firms often ensure that they remain committed to their business and national interests.

Non Alignment, Closeness to the US, and the Way Ahead

In times when the global economic system is characterized as being fragmented and where both the US and China are engaged in a power contest with Russia and the EU in between, it makes sense for emerging market economies such as India to play their cards well.

While in earlier decades, the principles of Non Alignment meant that India pursued this strategy, though in reality it was close to Russia, in recent decades, it has drawn closer to the US mainly due to the Geoeconomic imperatives.

On the other hand, it has also maintained good relations with the other powers and given the interlinked and interconnected global economy, it must continue to pursue a foreign policy shaped as much by high sounding principles as it must according to the economic objectives.

With nations around the world choosing to put more emphasis on Geoeconomics, it is high time Indian Corporates nudged the Indian government to include their concerns in its foreign policy objectives and pursue policies accordingly.

This is already happening to some extent as can be seen from the way in which business delegations often accompany officials on visits abroad.

Conclusion

Lastly, Strategic Autonomy is also important mainly due to the fact that Indian being a culturally diverse country has to keep in mind domestic interests in its global policies.

The same goes for Indian firms that often are dispersed across the country and hence, they too have to keep diversity and the need for inclusivity in mind when they transact business abroad.

In other words, domestic compulsions play a part as well and hence, taken together, the points discussed so far indicate how India and its businesses would be well served to actualize strategies that take into account all these factors.