Sovereignty Is Built In Supply Chains, Not Rhetoric
What is sovereignty? The unfolding third Gulf conflict has brought this question front and centre of India’s strategic community. We have often argued that sovereignty in the modern era is not about opportunistic relationships, sweeping statements or even grand strategy. It is about keeping one’s head down and building capabilities over time. Put differently, sovereignty is control of the supply chain—anchored in sustained investment in research and development that is not driven by the quarter-to-quarter compulsions of the market.This understanding, however, sits in tension with how India’s elite and institutional structures have evolved. At Independence, while India possessed a shared civilisational culture, it was in practice a collection of several hundred princely states with sharp divergences in language, customs and social organisation. We were, in effect, many small communities compressed into a single geography by the forces of history. In such a setting, intra-community trust was naturally higher than inter-community trust.
Layered onto this was inequality in access to capital, education, and the state. Those who could shape policy and allocate resources were often concentrated within certain communities. The incentive, therefore, was not merely to generate returns, but to retain and circulate them within familiar networks. This instinct manifested in informal formations such as the Bombay Club, which at one point resisted the economic liberalisation of the 1990s.
Liberalisation did broaden prosperity, but it did not fundamentally alter this underlying architecture. Capital continued to optimise for returns within known circuits. In such a system, research and development spending remained structurally low across most Indian firms—not only because it entails long-term, uncertain bets, but because fragmented trust and relatively small community pools offered limited avenues to absorb that risk collectively. The iron logic of return-chasing markets, combined with this social architecture, reinforced each other. India liberalised, but did not invest in innovation at scale.
The long-term consequence has been a deep and persistent dependence on external geographies—for both inputs and outputs that keep the economy running. This dependence was not accidental; it was amplified by the geopolitical context in which liberalisation unfolded. India opened its economy at precisely the moment the United States emerged as the sole superpower after the collapse of the Soviet Union. Pax Americana provided a stable global order, and India benefited enormously from it. Strategists who advocated closer India–US ties were, in that sense, right.
But this was also, implicitly, a leveraged bet on the continued dominance of that order.
The United States underwrote the security architecture of the Gulf, from which India sourced its critical energy needs. That energy powered an economy whose export engine—especially in services—was closely tied to Western markets. Remittances from the Gulf helped manage the current account deficit. In effect, India’s growth model became intertwined with American primacy across multiple axes: energy security, market access, financial flows and geopolitical stability. A close relationship with the US was not a single bet—it was a compounded one.
Over time, this leverage deepened. Rising inequality post-liberalisation was managed through expanded welfare, both direct transfers and indirect subsidies such as those embedded in oil pricing. Schemes like Ujjwala increased dependence on imported energy. Financial inclusion through the JAM trinity aligned domestic welfare delivery with global financial architectures shaped, in part, by regimes such as the Financial Action Task Force. Concurrently, improving relationships with Israel and the UAE added further layers of strategic interdependence.
What emerged was a system in which India’s economic and strategic equilibrium was deeply contingent on the stability of Pax Americana. The possibility of its disruption was neither seriously priced in nor institutionally hedged against.
That moment, however, has arrived.
Pax Americana is no longer uncontested, and in several theatres, it is visibly fraying. In its place, a different model—call it Pax Sinica—is already operational. Unlike the American approach of embedding power through military alliances and forward bases, China’s method has been to identify critical technologies decades in advance, internalise entire supply chains within its borders, leverage scale to drive down costs, and establish dominant, often monopolistic, positions. Solar manufacturing, electric vehicles, advanced electronics, and increasingly artificial intelligence and semiconductors all reflect variations of this strategy.
The geopolitical implications are profound. When a single geography becomes indispensable across multiple supply chains, economic gravity begins to shift. Trade need not be intermediated through the dollar system; it can be denominated in alternative currencies, with imbalances adjusted over time. Dependence on Western financial plumbing—and the sanctions regimes embedded within it—can be reduced. Gradually, this points towards the emergence of a parallel trading and financial architecture.
In such a world, sovereignty cannot rest on alignment with a dominant power—however benign it may appear in a given moment. A leveraged bet on a hegemon is, by definition, fragile. Sovereignty that rests on control of supply chains, by contrast, is slower to build but far more enduring.
India’s last three decades make this distinction clear. Global integration delivered growth, but in the absence of commensurate capability creation, it also embedded dependence. The lesson is not to retreat from globalisation, but to anchor it in domestic capacity.
What follows is not a matter of policy preference, but structural necessity: sustained investment in research and development, the building of industrial depth across critical sectors, and the creation of institutional frameworks that allow long-term risk to be shared beyond narrow networks.
Sovereignty is not negotiated in conference rooms, nor secured through alignment. It is built in supply chains.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.
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