The global investment landscape is undergoing a seismic shift as India’s strategic alignment with Russia and China reshapes energy flows, technology ecosystems, and currency dynamics. This realignment, driven by geopolitical pragmatism and economic self-interest, is creating both opportunities and risks for investors. By analyzing India’s evolving trade relationships, de-dollarization efforts, and technological collaborations, we can better understand how these trends are redefining global markets.

Energy Markets: A New Axis of Power

India’s energy strategy has pivoted sharply toward Russia, with Russian crude oil now accounting for 35%–40% of its total imports in the first half of 2025, valued at $67.2 billion [3]. This surge is fueled by economic incentives—Russian oil is significantly cheaper than alternatives—and geopolitical imperatives to diversify supply chains. Reliance Industries’ Jamnagar refinery, operated by Asia’s richest individual, Mukesh Ambani, imported 18.3 million tonnes of Russian crude in the first seven months of 2025, a 64% year-on-year increase [4].

China mirrors this trend, with both nations collectively absorbing 85% of Russia’s crude exports [3]. This dynamic has created a triangular energy alliance, where India and China act as stabilizers for Russian oil markets amid Western sanctions. For investors, this signals a long-term shift in energy geopolitics: India’s refining capacity is expanding to 1.98 million barrels per day by 2028, while its petrochemical production targets 13 million metric tons by 2030 [2]. These infrastructure investments position India as a key player in global energy arbitrage, offering opportunities in refining, logistics, and downstream energy technologies.

However, the U.S. remains a critical counterweight. India’s oil demand is projected to reach 6.7 million barrels per day by 2030, with U.S. liquefied natural gas (LNG) accounting for 19% of its imports in 2024 [5]. This duality—reliance on Russian hydrocarbons and U.S. LNG—reflects India’s balancing act between strategic autonomy and energy security.

Technology Collaborations: Bridging the Digital Divide

India’s technological ascent is being accelerated by partnerships with Russia and China, particularly in semiconductors, 5G, and defense. Tata Electronics’ $10.96 billion semiconductor fabrication plant in Gujarat, a joint venture with Taiwan’s Powerchip, underscores India’s ambition to become a global semiconductor hub by 2030 [2]. Similarly, HCL-Foxconn’s $446 million semiconductor venture in Uttar Pradesh highlights the country’s growing appeal for capital-intensive manufacturing [2].

In 5G, India is leveraging Chinese expertise while collaborating with Russian and Brazilian firms to expand rural connectivity. Huawei’s role in global 5G deployment remains pivotal, but India’s focus on local 5G infrastructure—such as Jio’s partnerships—signals a push for digital sovereignty [3]. Defense technology collaborations with Russia, including joint semiconductor research, further illustrate India’s bid to reduce reliance on Western supply chains [4].

These developments create fertile ground for foreign direct investment (FDI). India’s FY 2024–25 FDI inflows hit $81.04 billion, with services (including IT) growing by 40.77% year-on-year [1]. However, geopolitical tensions—such as U.S. tariffs on Chinese solar components and China’s restrictive FDI policies—introduce volatility. Investors must weigh India’s strategic advantages against the risks of fragmented global tech alliances.

De-Dollarization and the Reshaping of Global Finance

The BRICS bloc’s push for local currency trade settlements is challenging the U.S. dollar’s hegemony. India’s Special Rupee Vostro accounts and Russia’s SPFS system have enabled direct rupee-ruble settlements for energy trade, bypassing the dollar [1]. By 2025, BRICS nations aim to double cross-border transactions in local currencies, with gold and digital instruments emerging as alternatives to dollar-pegged assets [2].

This shift has tangible implications. China’s dollar reserves have fallen from 70% to 58% since 2015, while gold’s share of global reserves has surpassed the euro’s [2]. For investors, the erosion of dollar demand could weaken the currency’s value and disrupt traditional safe-haven assets. However, the dollar’s dominance—still 58% of global reserves and 88% of SWIFT transactions—means de-dollarization will be a gradual process [1].

India’s role in this transition is pivotal. Its energy imports from Russia, priced in rupees and rubles, and its participation in BRICS+ digital currency experiments, position it as a linchpin in a multipolar financial system. Yet, the lack of a unified BRICS currency and the complexities of gold-backed settlements suggest that dollar-pegged assets will retain relevance, albeit with reduced growth potential.

Conclusion: Navigating the New Geopolitical Order

India’s alignment with Russia and China is not a zero-sum game but a recalibration of global power. For energy investors, the India-Russia-China axis offers opportunities in refining, LNG, and energy arbitrage. In technology, India’s semiconductor and 5G ambitions, bolstered by strategic partnerships, present high-growth avenues. Meanwhile, the de-dollarization trend, though nascent, signals a long-term structural shift in global finance.

Investors must remain agile, balancing exposure to India’s dynamic markets with hedging against geopolitical uncertainties. The next decade will likely see a hybrid system where the dollar coexists with emerging currencies and digital instruments, reshaping the rules of global investment.

Source:
[1] India’s Foreign Direct Investment Tracker 2025 [https://www.india-briefing.com/news/india-fdi-tracker-2025-38140.html/]
[2] Semiconductor Industry in India: Incentives and Key Players [https://www.india-briefing.com/news/setting-up-a-semiconductor-fabrication-plant-in-india-what-foreign-investors-should-know-22009.html/]
[3] Q&A: Why India Is Being Targeted with Russian Oil Import Tariffs and What It Will Mean for Markets [https://www.energypolicy.columbia.edu/qa-why-india-is-being-targeted-with-russian-oil-import-tariffs-and-what-it-will-mean-for-markets]
[4] Behind India’s Massive Russian Oil Imports: Asia’s Richest Man [https://www.aljazeera.com/economy/2025/8/22/behind-indias-massive-russian-oil-imports-asias-richest-man]
[5] Energy-Hungry India Offers Opportunities for U.S. Oil and Natural Gas Exports [https://www.cmegroup.com/openmarkets/energy/2025/Energy-Hungry-India-Offers-Opportunities-for-US-Oil-Natural-Gas-Exports.html]