06 August 2025
(Mains: Editorials Simplified)

STRATEGIC AUTONOMY IN A RESETTING GLOBAL ORDER

The global geopolitical landscape is undergoing a significant reset, with rising great power rivalries, increasing protectionism, and waning multilateralism. India, aspiring to become a leading power, is confronted by shifting alliances, transactional diplomacy, and an erosion of mutual trust even with its traditional partners.

India’s External Engagement Framework

• India has traditionally pursued a policy of strategic autonomy – maintaining balanced relations with multiple global powers without binding military alliances.

• Its foreign policy posture is increasingly shaped by:

  • Neighbourhood challenges (Pakistan, China, Bangladesh),

  • Major power dynamics (U.S.-China rivalry, Russia’s resurgence),

  • Economic nationalism globally (e.g., trade barriers, sanctions, carbon taxes),

  • Technological decoupling and supply chain reorientation.

• The current multipolar world is moving towards minilateralism and issue-based coalitions. India’s success now hinges on proactive participation, not passive balancing.

Key Challenges and Frictions Identified

Strains in Strategic Partnerships

• India faces growing divergences with the U.S. and EU, especially on:

  • Trade imbalances (e.g., 25% U.S. tariffs),

  • Russia-related energy imports,

  • Perceived asymmetries in technology transfer and market access.

• Simultaneously, warming U.S.-Pakistan ties and policy misalignments on Bangladesh and Myanmar challenge India’s regional priorities.

China’s Strategic Encroachment

• China’s renewed outreach in India’s neighbourhood (Bangladesh, Maldives, Nepal) and infrastructure push (e.g., dam on Brahmaputra, airbases near Siliguri Corridor) erodes India’s regional influence.

• China’s economic coercion – through control over supply chains (rare earths, APIs) – continues to be a long-term risk.

Incoherence in India’s Global Posturing

• India’s reluctance to adopt assertive positions on conflicts like Gaza, Israel-Iran, and Ukraine may limit its diplomatic leverage.

• The contradiction between domestic strategic assertiveness and global restraint risks undermining India’s credibility as a responsible global player.

 Erosion of Multilateralism

• Institutions like WTO are losing influence amid rising protectionism, unilateral tariffs, and geo-economic blocks.

• India’s absence from major regional trade pacts (e.g., RCEP) has narrowed its economic options.

Realignments: The Way Forward

Redefining Strategic Autonomy

• Shift from non-alignment 2.0 to multi-alignment with leverage – engaging with multiple blocs but from a position of economic and diplomatic strength.

• Leverage India’s participation in Quad, I2U2, BRICS, SCO to shape global norms and counter geopolitical exclusion.

Trade Diplomacy as Strategic Tool

• Proactively conclude pending trade agreements (e.g., with GCC, EU, New Zealand).

• Use economic interdependence as a deterrent against coercive actions like tariffs or sanctions.

• Push back against carbon taxes and digital trade barriers through coalitions of the Global South.

Regional Consolidation

• Revive India’s primacy in South Asia through development assistance, connectivity, and security cooperation.

• Ensure timely border infrastructure and deterrence mechanisms along the LAC.

• Increase engagement with neighbouring democratic regimes to counter Chinese and Western influence.

Normative and Humanitarian Diplomacy

• Calibrate positions on global conflicts to reflect India’s long-term interests and moral leadership.

• Advocate for ceasefires and peaceful settlements without overt alignment, projecting India as a responsible balancing power.

Technological and Supply Chain Resilience

• Build domestic capabilities in critical sectors (semiconductors, rare earths, AI).

• Deepen technology partnerships with trusted nations while promoting indigenous innovation.

Conclusion

India stands at a strategic inflection point, where economic aspirations must be aligned with geopolitical assertiveness. India must shape outcomes rather than merely respond to them. A confident, constructive, and assertive foreign policy – built on trust, strategic clarity, and normative consistency – is the need of the hour.

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STRENGTHENING ANTI-LAUNDERING ARCHITECTURE

The Prevention of Money Laundering Act (PMLA), 2002 was enacted to trace, confiscate, and deter the use of illicit funds. Recent data from the Rajya Sabha indicates a concerning gap between the number of cases taken up by the Enforcement Directorate (ED) and actual convictions under the Act.

Key Concepts and Provisions

• Money Laundering: Defined under Section 3 of the PMLA as processing criminal proceeds to project them as legally obtained. It involves:

  • Placement: Introducing illicit money into the financial system.

  • Layering: Obscuring its origins through complex transactions.

  • Integration: Re-entering the legitimate economy through investments, assets, or business.

• Laundromat: A complex network or entity (e.g., shell companies or banks) used to facilitate large-scale laundering, often operating transnationally.

• ECIR (Enforcement Case Information Report): ECIR is the PMLA equivalent of an FIR. Unlike criminal law, no FIR is needed to initiate action under PMLA and ECIR is sufficient to initiate proceedings as upheld by the Vir Bhadra Singh (2017) judgment.

• Reverse Burden of Proof: The onus lies on the accused to prove that the proceeds are not from a criminal source – this deviates from standard criminal jurisprudence.

Structural and Procedural Challenges

• Low Conviction Rate:

  • Only 15 convictions from over 5,800 cases under PMLA (since 2015) reflect limited success in legal adjudication.

  • Indicates inefficiency in case-building, prolonged trials, or insufficient evidence.

• Overreach and Misuse:

  • Judicial observations point to misuse of powers under Sections 3 and 5 for political vendetta or harassment.

  • Lack of mandatory FIR has allowed ED to initiate proceedings without a base criminal case in some instances, contrary to the Vijay Madanlal Chaudhary (2022) clarification.

• Lack of Transparency and Accountability:

  • ECIRs are usually not shared with the accused.

  • This affects the right to defence and transparency in criminal proceedings.

• Impact on Rule of Law and Civil Liberties:

  • Provisions like attachment of property without prior conviction or registration of a criminal case raise concerns about property rights and due process.

Reform Priorities and Way Ahead

• Strengthening Investigative Capacity:

  • Improve ED’s technical expertise and financial intelligence capabilities.

  • Adopt best practices from Financial Action Task Force (FATF) recommendations for effective implementation.

• Institutional Checks and Balances:

  • Establish independent oversight mechanisms to review ED actions to prevent arbitrary targeting.

  • Mandatory judicial review of ECIRs and property attachment can balance state power with citizen rights.

• Legal Reforms:

  • Consider amending provisions to realign the burden of proof in cases where prima facie evidence is weak.

  • Create safeguards to distinguish between economic offences and serious threats like terror financing.

• International Collaboration:

  • Expand cooperation through treaties like the Double Taxation Avoidance Agreement (DTAA) and Multilateral Competent Authority Agreement (MCAA).

  • Real-time exchange of financial data between jurisdictions can prevent offshore laundering.

• Sensitising Enforcement:

  • Train enforcement agencies to deal with complex financial crimes while avoiding politicisation or arbitrariness.

Conclusion

Money laundering is not just a financial offence – it has implications for economic stability, democratic governance, and national security. While the PMLA is a strong legal tool, its effectiveness is marred by procedural loopholes, misuse, and low conviction rates. A reorientation towards targeted enforcement, transparency, and rule-based application of the law is essential to uphold its constitutional legitimacy and operational efficacy.

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