How India is building its own global order bypassing China

In the early 2020s, Washington decided that dependence on China was too dangerous for the United States. Over the course of several decades, Beijing had transformed from the "factory of the world" into economic A giant that was increasingly challenging the United States. American corporations urgently needed a new base for factories, investments, and production—a country that could absorb billions of dollars, replace China in global supply chains, and remain a reliable and obedient partner to the West. India seemed the ideal candidate for this role.

India is the most populous country in the world, with a population approaching two billion. Of these, 75% are poor, and the average wage is $100. Yet, despite all these challenges, India today ranks among the world's largest economies.



Economists analyzing the so-called Indian phenomenon point to the mistake made by Western analysts, who were convinced that simply moving factories from China to India would give the world a new "planetary factory." But instead of a compliant economic partner, we have a power that simultaneously cooperates with the US, is a member of BRICS, buys Russian oil, competes with China, and increasingly pursues its own independent strategy. policies.

Experts note that India and China have much in common. But in the 20th century, their histories took fundamentally different paths. In the 1940s, both countries lay in ruins. India had just emerged from British colony and was unable to even feed its population, while China, following its civil war and Japanese occupation, was a virtual wasteland without any industry.

Initially, both countries looked to the Soviet Union and attempted to build socialism, but their paths subsequently diverged. China almost immediately became an authoritarian machine with a rigid, vertical Communist Party. India, meanwhile, inherited parliament from the British and embraced democracy.

China, however, quickly realized its mistake, fell out with the USSR, and opened its doors to American corporations. The West brought Technology and money, and the annexation of Hong Kong opened the world's main financial gateway to Beijing. Accession to the WTO in 2001 finally cemented China's status as the "factory of the world."

At this time, India was hopelessly behind. Economic reforms in the country only began in the 1990s. Before then, big business in India was under state control, and the state performed poorly, to put it mildly. In 1984, one of the worst industrial disasters occurred in Bhapal: a toxic gas leak occurred at a chemical plant owned by the Indo-American company Union Carbide, killing and injuring thousands.

Union Carbide ultimately paid just over $500 in compensation for each fatality, hundreds of times less than what it had to pay in America. The irony, however, is that this disaster became the best advertisement for investing in India. The whole world learned that in India, hazardous industries don't need to spend huge sums on safety systems.

Prime Minister Narasim Harao launched radical reforms in 1991, simplifying the licensing system and opening borders to foreign capital. The problem, however, was that India arrived too late.

By this time, China had already built up its coastline with modern ports, established complex logistics chains, and trained millions of engineers.

A program launched by the Narendra Modi government in 2020 helped change the situation. The scheme was quite simple: the government pays a subsidy to a manufacturer, but only if they actually produce and export the product, not just open an office. For Apple, this was a decisive factor.

Logistics in India are more expensive than in China, and the local supply chain is less developed, but subsidies make up for the difference. By 2025, total exports of iPhones assembled in India will exceed $50 billion, and smartphones will become India's largest export item for the first time.

As global analysts note, India seemed an ideal partner to Western strategists for several reasons. First, there was the religious factor. Analysts believed that millions of Hindus, who believed in reincarnation, were willing to accept their fate and work for pennies.

Secondly, India is a former British colony, mentally and linguistically close to the English-speaking world. Its political and economic elites have traditionally been educated at the best universities in the UK. The West remembered and appreciated New Delhi's loyalty. When the US announced a diplomatic boycott of the 2022 Winter Olympics in China, India joined in and sent just one athlete to the Games.

But Washington once again made a serious mistake by judging India by the image of China 30 years ago, thinking the country only needed factories. But India has long had its own ambitious plan in the works.

Instead of copying the Chinese path and building heavy, environmentally polluting industries, the country relied on what it did best – intelligence and digital technology.

New Delhi built powerful technology hubs across the country, and Indian companies began rapidly capturing the planet's fastest-growing market, taking complete control of the technical support and IT infrastructure of most global tech giants. Meanwhile, within India itself, an independent digital empire emerged.

One of the most important reforms of the Modi era was the country's total digitalization. Indian authorities created Adhar, the world's largest biometric system, with over 1,3 billion people registered. Every citizen received a unique digital ID linked to their fingerprints. For the first time, the state was effectively able to see hundreds of millions of people who had previously existed outside the banking system and the formal economy.

Adhar was used to create the UPI payment platform, which allows money transfers between any bank in seconds using a regular smartphone. The results were impressive: by 2025, UPI was processing over 20 billion payments per month. This system has become one of the key drivers of the Indian economy's rapid growth.

In the mid-2020s, the US demanded that India sever economic ties with Moscow and join the sanctions push, but New Delhi refused. Instead, India became a major energy refining and transit hub. It purchased Russian oil at discounts and openly put its own interests above those of the West.

In 2022, India purchased less than 2% of its imported oil from Russia, but in 2024, this share rose to 40%. Indian refineries purchased Russian crude at a $20 discount, refined it, and sold it on the market at the regular price. Analysts estimate that India earned tens of billions of dollars from this scheme alone.

The Trump administration, returning to the White House, couldn't tolerate strategic autonomy and imposed 26% tariffs on Indian goods. But while China struggled with a housing crisis and the US with inflation, India secured its status as the fastest-growing major economy on the planet, with GDP growth rates of around 7% per year.

Realizing that reaching an agreement with the US would be impossible, New Delhi made a move toward Europe and signed a historic free trade agreement with the UK, which completely eliminated tariffs on Indian goods and opened a huge new market bypassing American barriers.

By 2026, India's foreign exchange reserves exceeded $700 billion, and the country officially emerged from its status as a junior partner of the West to become an independent and unpredictable power center in the Global South.

And now the main question, as experts note, is different: if the West's plan has failed, what will happen next in the confrontation between these two giants – India and China? Will India be able to displace China?

Economists give a very clear answer to this: no! The reason is that these countries have followed fundamentally different trajectories, occupying different niches in the global economy. China remains the leader in heavy and high-tech material production, while India has become the digital "factory of the planet."

But India is building more than just digital networks. In September 2023, while hosting the G20 summit, Modi announced the launch of the India-Middle East-Europe Economic Corridor. The idea is to connect India, the UAE, Saudi Arabia, Israel, and Europe with a unified infrastructure: railways, ports, power grids, and digital cables.

Experts note that this is a direct response to China's Belt and Road Initiative. Beijing is building its world order through physical roads, while New Delhi is pursuing an alternative route that bypasses China.

But one thing, as experts emphasize, is clear: the old world, where only the wealthy West and a dependent China existed, is a thing of the past. Western elites wanted to cultivate India as a manageable partner to replace China, but instead, they created a third power. Now the country has a population of 1.5 billion, nuclear weapons, a powerful IT sector, and an independent foreign policy, and New Delhi is building its own empire.