A New Non-Alignment: Chips, Oil & AI

As geopolitics shifts from ideology to infrastructure — from military blocs to battles over chips, oil, and artificial intelligence — India’s foreign policy is experimenting with a new form of non-alignment. No longer about passive neutrality, this “Non-Alignment 2.0” seeks to build autonomy through diversification: engaging all major powers, but depending on none. In an age where technology, energy, and data define power, India’s choices across these domains will determine whether strategic autonomy can still endure in a world that is once again dividing into blocs.

Unlike its Cold War predecessor, which sought neutrality between ideological poles, Non-Alignment 2.0 is a form of pragmatic multi-alignment. It is not a retreat from global engagement but an assertion of agency within it. The goal is to derive security from diversification rather than allegiance, and influence from participation rather than subordination. This new non-alignment reflects the realities of interdependence: that economic, technological, and security interests now overlap too deeply for isolationism to be credible, but alignment with any one bloc would also risk dependence.

India has emerged as the most visible test case for this approach. Its balancing act is clearest in three arenas: semiconductors, energy, and artificial intelligence. Each represents a frontier where global competition is intensifying and where national resilience is being redefined.

In semiconductors, India has launched a broad industrial and strategic initiative to reduce external dependence and build domestic capacity. The Semiconductor Mission aims to attract investment across fabrication, assembly, and design, with incentives designed to create a viable ecosystem from chipmaking to research. Recent reports suggest that India’s semiconductor market could triple in value by the early 2030s, supported by policy initiatives such as the Production-Linked Incentive scheme. Yet beyond industrial policy, this reflects a larger ambition: to achieve sovereignty over foundational technologies that underpin everything from AI to defence. India is deepening collaboration with the United States, Japan, and Europe through frameworks such as the India–U.S. Initiative on Critical and Emerging Technologies, even as it keeps doors open to partnerships in East Asia and the Middle East. The guiding idea is to connect across supply chains without becoming captive to any one of them — technological non-alignment in practice.

Energy, too, is being reshaped by the same philosophy. As the world’s third-largest oil importer, India’s economic stability depends on secure and affordable access to crude. The global shocks following the Ukraine war — sanctions, shipping disruptions, and price volatility — have forced a recalibration of India’s traditional dependencies. In recent years, India has increased imports of discounted Russian crude to cushion inflationary pressures. But as Western sanctions expand, refiners are reassessing exposure, and policymakers are considering measures to cap imports from any single country at roughly a quarter of total purchases. Simultaneously, India is strengthening ties with the Gulf, the United States, and African suppliers, while expanding refining capacity and building strategic reserves. The objective is clear: maintain flexibility and avoid being locked into any one supplier bloc. It is a classic expression of non-alignment — not withdrawal from the system, but diversification within it.

The same approach now extends into digital policy and artificial intelligence. India’s pursuit of what officials describe as knowledge sovereignty involves developing the hardware, cloud infrastructure, data frameworks, and AI models that will power its digital economy. Recent policy documents envision a layered approach that protects domestic data while enabling international cooperation. India’s model diverges from both the U.S.-style market-led digital order and the Chinese state-controlled one, favouring a hybrid that balances openness with accountability. The emphasis is on building systems suited to India’s democratic and multilingual realities — developing AI models and platforms that reflect local contexts even as they connect globally. In effect, India is seeking digital non-alignment: engagement with the global AI economy on its own terms.

The logic of this strategy is compelling. India possesses the scale, market leverage, and institutional capacity to sustain diversified partnerships instead of binary alignments. The simultaneous pursuit of domestic manufacturing, energy diversification, and digital autonomy suggests a coherent strategy rather than ad hoc balancing. By avoiding rigid alliances, India preserves diplomatic flexibility: able to engage Washington, Tokyo, and Brussels, while maintaining constructive ties with Moscow, Beijing, and the Gulf.

Yet the challenges remain significant. Non-alignment in theory does not guarantee non-dependence in practice. India’s chip ambitions still rely on global intellectual property and advanced tooling; its energy diversification will take years of infrastructure investment to mature; and its digital policy must navigate a world splitting into competing regulatory and data regimes. As competition between the major powers intensifies, the space for strategic ambiguity narrows. Non-Alignment 2.0 will demand not just careful diplomacy, but also structural capability — technological self-sufficiency, financial resilience, and political steadiness under external pressure.

To make this new non-alignment work, India must turn hedging into capacity. It will need to deepen domestic technological depth beyond assembly and attract investment in research and design. It must institutionalise diversification in energy by combining fossil resilience with renewable transition and regional grid integration. And it should build connective partnerships that link rather than divide — coalitions for trusted supply chains, ethical AI governance, and climate adaptation that engage both the advanced economies and the Global South.

India’s experiment with Non-Alignment 2.0 will matter far beyond its borders. If successful, it could offer a model for other middle powers — from Indonesia to Brazil — seeking to navigate an era of techno-economic fragmentation without surrendering autonomy. It could help moderate global rivalry, ensuring that trade and technology systems remain interoperable rather than fractured. But if it falters — if external pressure forces binary choices or domestic capability lags — it would reinforce the view that true autonomy is impossible in a world of intertwined dependencies. Either way, India’s choices will shape the emerging world order more than any formal alliance ever could.

In the final analysis, this new non-alignment is both an act of necessity and of imagination. It seeks to leverage interdependence without losing agency, to convert connection into strategic depth. If India can balance pragmatism with principle, autonomy with alliance, and diversification with discipline, it may not only revive non-alignment but reinvent it — as a model of power built not on alignment, but on agency.