In recent years, India has navigated a complex geopolitical landscape by balancing its relationships with both China and the United States. This strategy, known as “polyalignment,” reflects not only a calculated approach to international relations but also the competing interests of powerful economic stakeholders within the country.
Since the deadly border clashes with China in June 2020, Prime Minister Narendra Modi’s government has deepened cooperation with the United States. This shift occurred alongside continued participation in multilateral discussions that involve China. Following Russia’s invasion of Ukraine in 2022, India maintained its stance on purchasing Russian arms and oil, a policy that resulted in a 25 percent tariff imposed by Washington in August 2025. To counterbalance its relationship with the U.S., India has sought to strengthen ties with the European Union.
While India’s engagement with various global actors is often labeled as hedging, it is fundamentally influenced by the interests of domestic corporate players. Over the past few decades, private capital has gained significant influence in India, particularly after economic liberalization began in the 1980s and 1990s. Modi’s first term, starting in 2014, saw an even greater consolidation of corporate power, with leaders such as Gautam Adani and Mukesh Ambani forming close ties with the government.
This partnership with business tycoons has propelled advancements in infrastructure and technology, yet it has also reinforced oligarchic structures characterized by crony capitalism, wherein access to the Modi administration is essential for corporate growth. Such dynamics impact India’s foreign policy decisions, especially in infrastructure financing aimed at countering China’s influence in South Asia.
In competing with China’s Belt and Road Initiative, the Modi government has actively promoted the Adani Group’s involvement in infrastructure projects in countries like Bangladesh, Kenya, and Sri Lanka. Adani’s role extends beyond business, as he also supports strategic initiatives such as the India–Middle East–Europe Economic Corridor, which aligns with Indian security interests.
Contrastingly, the technology sector highlights the tension between external security concerns and domestic economic interests. Although Indian firms have relied on Chinese electronics components to remain competitive globally, the Modi government has imposed restrictions on Chinese investments, citing national security risks following the 2020 border clashes. These measures faced backlash from domestic tech firms, resulting in some policies being relaxed to protect their interests, while bans on certain Chinese apps remain.
This ongoing tug-of-war illustrates that India’s polyalignment is less a product of strategic statecraft and more a reflection of the ongoing negotiation of interests among various corporate actors. When these interests align, foreign policy tends to be coherent; however, divergence often leads to inconsistencies, underscoring the substantial influence that corporate entities wield over India’s foreign policy development.
As India’s policy landscape continues to evolve, the balance between corporate interests and state strategy will be instrumental in determining the country’s future international relationships.
