Geopolitics and Energy Security - Newspaper Summary

 The sources highlight that in October 2025, the global business and economic landscape is heavily shaped by escalating geopolitical fragmentation, which is driving significant shifts in international trade alignments and intensifying the focus on national energy security, particularly for import-dependent economies like India.

Geopolitics

Geopolitical fragmentation is a central theme influencing global economic differentiation.

1. Russia, Sanctions, and India-US Relations

The proposed $600 million investment by Russian state-owned energy giant Gazprom to build a 5 million tonne LNG regasification terminal at Kakinada port in India is a major geopolitical development.

• Sanctions Context: Gazprom’s plans proceed against the backdrop of US sanctions related to Russia’s war with Ukraine. This move is interpreted as an "energy pivot" amid US sanctions and strained India-US ties.
• India as a Safe Market: Experts view India as a "safe, attractive market for Russia" because New Delhi has been resistant to global pressures regarding energy procurement.
• Strain on India-US Ties: This new business tie-up may have a major impact on India-US relations, which are already strained over Washington’s steep tariffs on Indian goods, including an additional 25% penalty for sourcing oil from Russia. Experts note that India has revived other partnerships with Russia recently, such as defense acquisition plans, and has made it clear it "would not budge to diktats". However, despite the absence of explicit legal issues under Indian law, the investment could face practical hurdles as global service providers and financiers with exposure in the US and Europe may resist dealing with sanctioned entities like Gazprom.
• Adani Ports Policy: The context for Gazprom’s ambitions includes the fact that Indian port operators, including the Adani Group, are barring vessels sanctioned by the US, UK, and EU from their ports.

2. Global Instability and Economic Uncertainty

Major political shifts in developed economies are contributing to global market uncertainty:

• European Crises: The unexpected resignation of French Prime Minister Sebastien Lecornu due to parliamentary intransigence deepened a national political crisis, causing a selloff in French assets (stocks tumbling, bond yields rising). This instability, combined with growing debt piles in the US, Japan, and Europe, is adding momentum to a “debasement trade,” pushing investors toward the perceived safety of gold and Bitcoin.
• Ukraine-Russia Conflict: Ukraine is escalating drone attacks on Russia’s energy infrastructure, striking 85 "high-value" targets in less than two months. These attacks have badly damaged 16 out of 38 Russian refineries. This sustained campaign is designed to inflict damage on Russia's ability to sustain the war and is causing severe fuel shortages and rationing across Russia.
• China and Sanction Evasion: China has developed a hidden, barter-like funding conduit to secretly pay Iran for oil while avoiding US sanctions. Iranian oil is exchanged for Chinese-built infrastructure, facilitated by the Chinese state-owned insurer Sinosure and a secretive financial entity called Chuxin.

3. US Protectionism and India's Digital Sector

US trade policy continues to create headwinds for India's business interests:

• Visa Issues: President Trump’s stricter H-1B visa norms and sharply higher application fees are raising costs and restricting the mobility of Indian professionals, adding margin pressures to Indian IT firms. The legality of Trump's H-1B fee imposition is currently facing pushback in a US court.
• US Tariffs: The 50% tariffs imposed by the US on most Indian goods (effective August 2025) are a major factor contributing to the rise in Non-Performing Assets (NPAs) for export-oriented MSMEs in sub-segments such as textiles, carpets, and gems and jewellery in FY26.

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Trade

Geopolitical re-alignments are prompting India to rapidly diversify its trade partners and enhance domestic competitiveness.

1. Strategic Trade Diversification

India is leveraging global shifts to negotiate and expedite new trade deals:

• India-UK FTA: UK Prime Minister Keir Starmer's upcoming visit to India is primarily a trade mission focusing on ratifying the India-UK Comprehensive Economic and Trade Agreement (CETA), signed in July. This pact is projected to double bilateral trade to approximately $115 billion by 2030. The UK is expected to eliminate tariffs on 99% of tariff lines for India, benefiting sectors like textiles, engineering goods, and footwear.
• Latin American FTAs: India is accelerating FTA talks with Chile and Peru in an attempt to diversify trade, explicitly driven by the challenge posed by US tariffs. Negotiations with Chile are aiming for substantial results by year-end.
• India-Qatar Trade: India and Qatar are moving quickly to finalize the contours for FTA negotiations, aiming to double their trade from $14 billion to $30 billion by 2030. India’s trade relationship with Qatar is currently heavily reliant on energy imports, with petroleum crude and gas products accounting for nearly 90% of total imports.

2. Export Challenges and Competitiveness

Indian export sectors face difficulties amid global competition and protectionism:

• Services Sector Slowdown: India’s services sector growth cooled in September 2025, slipping to a PMI of 60.9 (from a 15-year high of 62.9 in August), due to softer export demand and heightened global competition. External sales grew at the slowest pace since March.
• Manufacturing Competitiveness: Industry leaders recognize the global shift away from China (the "Beyond China+1" narrative) as a significant opportunity, especially in construction/EPC. However, there is a recognized gap between aspiration and action. The NITI Aayog CEO recommends that India lower its tariffs and non-tariff barriers and open its markets to improve manufacturing competitiveness, emphasizing that India cannot avoid focusing on the $15 trillion Chinese economy.
• Footwear Exports: India’s footwear exports remain concentrated in leather products, leaving the country with low market share in the strong $110 billion global market for non-leather footwear. NITI Aayog urges policymakers to promote R&D and modernize MSME clusters to boost competitiveness.
• Coffee Competition: Indian coffee exporters face increased competition, particularly in European and Middle Eastern markets, because the premium for Indian coffee (especially Robusta) has widened substantially against rivals like Uganda and Ethiopia.

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Energy Security

Energy security is a national priority driven by India's immense growth appetite and import dependence, requiring immediate action on both fossil fuels and renewables.

1. India’s Critical Energy Needs

Spencer Dale, Group Chief Economist at bp, stated that India is the fastest-growing energy market in the world and is central to driving global energy trends.

• Import Dependence: India is highly vulnerable to geopolitical shocks, as it imports 85-90% of the oil and nearly 50% of the natural gas it consumes.
• Strategy for Security: To mitigate this risk, Dale recommends a two-pronged approach for India:
  1. Increase domestic production of oil and natural gas (bp, in partnership with Reliance and ONGC, is actively involved in this).
  2. Accelerate electrification of processes, including industries and mobility, generating electricity using a mix of domestic coal and renewables.

2. Fossil Fuel and Gas Infrastructure Development

Key projects are underway to secure fuel supplies:

• Russian LNG Terminal: Gazprom’s planned $600 million LNG regasification terminal in Kakinada will add 5 million tonnes of capacity and may aid the transport of gas discovered in the Andaman islands to India’s east coast.
• Domestic Exploration: ONGC is committed to substantial domestic investment, planning to invest ₹8,110 crore for onshore development of 172 wells in Andhra Pradesh.
• Logistics Milestone: The Indian Navy commissioned the Anti-Submarine Warfare Shallow Water Craft ‘Androth’ to enhance coastal security capabilities. India also received its first very large gas carrier (VLGC), Shivalik, at Visakhapatnam port, marking a significant step in the nation’s maritime and energy logistics capability, aligning with the vision of Atmanirbhar Bharat.

3. Renewable Energy Transition

The shift towards renewables is a core component of energy security:

• Financing Renewables: Hero Future Energies secured ₹1,908 crore in funding from SBI and Canara Bank for a 120MW hybrid project (wind, solar, and storage) in Kurnool, Andhra Pradesh.
• Storage Capacity Gap: India requires an estimated 50 GW of energy storage capacity (with 5-6 hours of storage) by 2030 to manage the intermittent nature of renewable energy, which is expected to constitute over 35% of total generation by then. Prioritizing energy banking and storage is essential to make power swapping between states economical and to fuel the green energy drive.
• Green Hydrogen Focus: The Kerala government's Agency for New and Renewable Energy Research and Technology (ANERT) is working to position the state as a key player in the green hydrogen economy. Its proposed Green Hydrogen Policy will offer incentives, including 25% capital expenditure support for the first 100 MW of electrolysers.

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Conclusion: Global and Indian Business Context (Oct 2025)

The news from October 2025 paints a picture of a dynamic Indian economy attempting to navigate a volatile global environment marked by protectionism (US tariffs on India), escalating conflicts (Ukraine hitting Russian energy infrastructure), and financial crises in major world economies (French political turmoil boosting gold/Bitcoin).

India's strategy is twofold: securing essential energy supplies, even by doubling down on partnerships with sanctioned entities like Gazprom, and aggressively pursuing trade diversification through FTAs with the UK, Chile, Peru, and Qatar to offset US pressure. While macroeconomic indicators show the services sector maintaining strong momentum despite softening export demand, the geopolitical environment is fundamentally reshaping India’s strategic economic choices, prioritizing energy self-reliance (domestic production, renewables) and enhancing manufacturing competitiveness.