Dr. Rao V.B.J. Chelikani
In the 21st century, no country can afford to be nationalistic and self-sufficient in natural, material, and technological resources needed for economic growth and development. As most states are the products of historical accidents, we cannot say what an ideal or optimum state should be in terms of territory, population, water, and other natural resources, let alone manpower and military forces, whether to defend itself or to conquer the resources of other states. In the past, imperial states were formed by ambitious rulers to make themselves larger and more powerful by amassing greater resources.
In Europe, expansionist policies were once justified by the claim that a state should have its natural boundaries, with access to rivers and seas. Even now, China claims sovereignty over approximately 80% to 90% of the South China Sea, which overlaps significantly with the maritime borders and economic zones of several Southeast Asian nations. In the West Asian crisis, Iran is claiming the right to control the Hormuz Strait and impose 'tolls' in its national interest and Donald Trump is claiming the Suez Canal and Greenland for the same reasons.
India has border disputes and conflicts with almost all its neighbours, without having solved any of them for the past 75 years, despite expensive diplomats and punishing defence expenditure. In the name of defending these national interests, India is being forced to divert its growing Gross National Product and most of its income to ever-growing defence needs instead of using those resources for the growing needs of its population in health and education. Under these conditions, it is not in India‘s interest to be more nationalistic and trying to be self-sufficient, particularly in defence preparations. It serves the only purpose of keeping the politicians and bureaucrats busy.
In addition to these dominant and discordant demands of the states, new needs are shaped by the diverse internal population, which is not static, given increasing human mobility. At the individual level, each person has to think globally and act globally. For example, there are an estimated 37.28 million overseas Indians worldwide, widely dispersed across more than 200 countries, which is a significant percentage of the population. Indians abroad are accepted as professionals, allowing them to earn as much money as they can. Some countries have even elected them as ministers and prime ministers. A recent example is the USA, a highly competitive world that allows Indians to shine in academics, business, and politics without discrimination. These kinds of people-to-people relations should influence and overrule any diplomatic and government-to-government exigencies that might be provoked by the individual temperaments of the politicians and the diplomats. This aspect is to be taken into account while dealing with the USA and Russia. It has been possible because Indian culture promotes peaceful, harmonious, and mutually enriching coexistence with others, putting the human being at the centre rather than shouting that India is first and India is great. We really believe that the world is one big family. For that matter, one can say that India has been a vast cultural nation for thousands of years and has been a political state only for the past 75 years by the force of circumstances.
Politically, no country can nowadays become greater or more powerful than others, or powerful enough to completely defeat, occupy, rule, or destroy another country. However dangerous that country might be to regional stability and world peace, we have seen this in the cases of Vietnam, North Korea, Afghanistan, Ukraine, and Iran, one after another, no matter how great and strong the attacking adversary country might be. Any conflict any where affects not only the belligerents but also the entire world, leading to shortages of goods and services and rising costs of basic necessities. So we have to live with other states, especially our neighbouring states, in peaceful co-existence as a matter of strategy, while trying to solve disputes in any other way other than waging wars. The arms race is never ending.
A country like India can become great by expanding its soft power- by deploying its merits in culture, arts, humanistic and democratic values, international cooperation, particularly in trade, academic exchanges and innovation and technology. It is the only country that liberated itself by observing non-violent techniques.
Bilateral relations are never satisfactory for both parties, as they are viewed and maintained on the basis of economic and political power and military might. In view of the above economic and political reality in the 21st century, our foreign policy, international trade and most essentially, the defence preparations and arms build-up need to be radically revised to be less nationalistic and more international, not only in terms of bilateral and multilateral accords but also more universal.
It is good that India has started entering into Free Trade Agreements with countries on all continents. Some of them might further allow some trade surplus in favour of India. Naturally, such countries should be seen as more friendly than the countries that allow debts of payments even in rupees. But no country normally accepts imports without being able to export more or less to the same value in the long term, even if it consents to an unfavourable balance of trade for some years. Hence, neither economic nationalism nor economic imperialism is possible to indulge in anymore, as in the past. We have to envisage a new trade policy of balancing our ever-changing demand for goods and services and our production and supply of export-worthy products. Except in the service sector, in the industrial and manufacturing sector, we have yet to make significant progress in productivity, skills and quality. We did progress, but not as much as our politicians want us to believe. Up to the 1980s, India was widely counted as one among the world‘s poor and least developed countries due to its low per capita income, widespread poverty, illiteracy, slow economic growth and above all, low human development.
In the World Trade Organisation, India cannot afford to be tough in negotiations while seeking, in the same breath, concessionary trade tariffs, while imposing high tariffs in India on imported goods and services. Maliciously, Donald Trump calls India the king of tariffs! One cannot claim to be equal to great power countries while trying to represent the Global South, which is a clumsy grouping of countries that demand trade concessions and preferential treatment. On the contrary, India has been honourable for having asked for more trade and not aid. Similarly, now, one cannot plead for free circulation of labour in the World Trade Organisation, while discriminating against foreigners to work in India. Hence, it will be unbecoming of India to look as if it is marking a reversal and leaning towards an authoritarian nationalist approach in international relations. Now, many countries are anxious to trade with India, not because it is valued as a liberal country, where they can make profits, but because it is a vast consumer market with increasing purchasing capacity. Further, it is well understood abroad that corrupting the regulators is one way to face multiple regulations and paperwork in India and survive.
II. The State as a political entity cannot any more be inspired by the principle of state sovereignty but of equality and harmonisation in relation to other states. It means it has to recognise the right to sovereignty of other states. This means foregoing one‘s own absolute sovereignty along with other states which also are willing to forego their absolute sovereignty and consider themselves to be on equal footing with others to act for mutual benefit. It has become an imperative in the context of digital technologies, particularly in Artificial Intelligence, which appeared as an avalanche wiping out all technological sovereignties of states big and small. We have already seen in the case of cryptocurrency where, for instance, Donald Trump could make more than a billion dollars without either the USA or Pakistan Government having to do anything about it. The States canot have sovereignty over their national data, neither in AI software nor in AI infrastructure. Conceding this phenomenon, the European Union, which itself is a symbol of surrender of state sovereignty by 27 European states, and which had even colonial empires in the past, is dealing with Artificial Intelligence (AI) in an exemplary manner. The Union had adopted the General Data Protection Regulation (GDPR, rather than opposing it. It sets out rules for collecting all data, including personal data, its processing, storing, and use in AI systems. While trying to reduce massive 80%+ reliance on foreign, mostly American and Chinese tech giants, the European Commission adopted a sweeping proposal for the Cloud and AI Development Act (CADA). While these remain important, they do not fully explain who can actually deploy, operate, and evolve AI systems at scale. These characteristics tightly couple compute, network, and energy systems, making performance, resilience, and sustainability inseparable from how infrastructure is designed and operated. In practice, a state‘s capacity increasingly depends on access to physical resources such as electricity, water, land, fibre infrastructure, and automation capabilities, along with the ability to coordinate them under real operational constraints. On the whoe, it means it has neither legal sovereignty concerning jurisdiction, compliance, and formal ownership, as reflected in regulatory frameworks and IP protections, nor Operational sovereignty or the ability to observe system state, make decisions based on local conditions, validate those decisions, and act within defined policies and physical limits. It depends on visibility, control authority, and the ability to execute reliably across compute, network, and energy systems.
Hence, true national technological and AI sovereignty is a structural impossibility for any individual nation today. No single country contains the entire end-to-end ecosystem required to build modern AI hardware. High-performance AI computing relies on a hyper-specialised, globally fractured supply chain. Advanced AI architectures require microchips that rely on extreme ultraviolet (EUV) lithography machines manufactured exclusively by ASML in the Netherlands. Designing chips happens largely in the US (Nvidia, AMD), fabricating them happens primarily in Taiwan (TSMC), and packaging occurs across Southeast Asia. Attempting to duplicate this entire multi-trillion-dollar ecosystem domestically creates an unsustainable financial and temporal bottleneck that pushes back a nation many years behind. It proves that the entire AI development is going to be driven by a decentralised, global scientific community rather than isolated national laboratories. The foundational frameworks for AI, such as PyTorch and TensorFlow, along with millions of open-source models hosted on global platforms like Hugging Face, are built and maintained by international contributors. Since AI talent is highly mobile, a state cannot restrict its tech sector to domestic use only, as all breakthroughs are rapidly shared, adapted, and integrated across borders via global research networks. A state trying to build a completely closed, proprietary national software stack will spend more money to recreate tools that the rest of the world accesses instantly and improves collectively. Such an expenditure no state budget can absorb without lowering the quality of other public services. The Tech giants possess cash reserves and capital expenditure budgets that dwarf the discretionary technology spending of most sovereign nations, including India. Further, isolating a nation's technology stack cuts it off from the global data economy. If a state enforces strict architectural sovereignty, its domestic systems will become incompatible with international standards. This digital isolation would surely prevent domestic companies from exporting tech products or participating in global supply chains, including manpower which remains one of the assets of India.
Thus, national, governance faces a critical challenge in dealing with highly fluid, borderless technologies like AI and cryptocurrency.Traditional bureaucratic control mechanisms often prove ineffective or counterproductive. Technological innovation moves exponentially, while bureaucratic rule-making moves lineally. Cryptocurrency and AI operate in a decentralised manner through global networks. Strict domestic bans or heavy-handed regulations often fail to stop the technology; instead, they push capital, talent, and innovation to more permissive markets.
To effectively navigate these trends, foreign policy and domestic regulatory frameworks are increasingly shifting toward harmonisation. This means more aligning rather restricting and focusing on outcomes e.g., consumer protection, data privacy, financial stability, rather than dictating specific national technical processes.
Harmonisation involves collaborating with global bodies (such as the G20, FSB, or international AI safety coalitions) to create interoperable standards. Engaging tech innovators, researchers, and financial platforms in the rule-making process ensures that regulations are technically feasible and do not inadvertently choke economic growth. It is in this context, we felicitate India for having signed this mont a memorandum of association with 24 countires in sharing Digital Public Infractrcture (DPI) and created Electronics Development Fund (EDF). At a later stage, we may have to enter into UN-sponsored Treaty.
The Reserve Bank of India, SEBI, and IRDAI are operating not with great success an IoRS framework allowing cross-sector tech (e.g., an AI tool processing crypto micro-payments) to be reviewed through a single-window interface rather than jumping between individual ministries. In July 2026, MeitY began examining a standalone AI statute that considers utilizing sandboxes specifically to try high-impact, autonomous agentic AI under state supervision. Still there remains a gap between state regulations and market evolution, ultimately, framing foreign and economic policies should aim at harmonisation to face these structural shifts.
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