The global economic order is rapidly unravelling, transitioning from integrated markets to a geopolitical arena. This fundamental shift redefines everything from climate policy to investment portfolios, demanding a strategic response rather than mere economic calculation.
Donald Trump’s actions, from eyeing Greenland for critical minerals to seeking regime change in Iran, illustrate a playbook leveraging economic access and resource control as tools of statecraft. Control over rare earths, lithium, and energy is now paramount for dominance in green tech, AI, and defense.
US Policy and Climate Strategy
The United States’ withdrawal from initiatives like the International Solar Alliance, while perhaps not impacting the alliance itself, signals a deeper objective. Seen through the lens of global competition, this move is a strategic calculation to preserve domestic fossil capital and maneuverability, potentially weaponizing climate vulnerability within economic rivalry.
Federal Reserve Independence Under Pressure
President Trump’s focus on lower interest rates, aimed at bolstering stock markets and offsetting tariff impacts, puts pressure on Federal Reserve independence. The market’s eventual concern over Fed independence highlights how monetary policy is increasingly viewed as a tool for national economic resilience, especially when inflation stems from strategic stockpiling and supply chain rewiring.
India’s Budget: A Strategic Imperative
In this new landscape, India’s Union Budget 2026 must be recast as a strategic move, not merely an accounting exercise. While interest on past loans consumes a significant portion of budgeted spending, budgetary allocations for sectors like the auto industry (EVs), cement (infrastructure), and banks (mobilizing domestic savings) are critical for competitive advantage and reducing external vulnerability.
Domestic Strength and Global Risks
The relentless flow of Indian retail capital into equities serves as a crucial fortification of domestic markets against volatile global flows. However, India is not insulated. Market participants remain vigilant about global risks, including oil market developments and weather disruptions, which could impact stock performance.
Prioritizing National Security
Budget 2026 assumes heightened importance as a signal of strategic priorities. It must focus unequivocally on national security and accelerate the nation’s momentum towards strategic autonomy to secure long-term economic and political resilience. Food security remains paramount for the ‘Viksit Bharat’ goal, necessitating a proactive approach to national defense and self-sufficiency.