← External Forces: Trade, Geopolitics & Market Access (all topics)
Friend-shoring & bloc formation
What it is
Trade and investment reorganising around political alignment rather than cost alone - China-plus-one sourcing, regional trade blocs, and supply chains rebuilt among allies. India has signed or concluded agreements with the UAE, Australia, the UK and the EU while negotiating with the US
Efficiency is traded for security of supply
Impact on industries
- India is among the clearest beneficiaries, gaining manufacturing share as buyers diversify away from a single dominant source
- Trade agreements convert that positioning into tariff access for textiles, gems, pharmaceuticals, marine products and engineering goods
- Bloc formation raises costs system-wide, since duplicated supply chains are less efficient than concentrated ones
- Alignment carries obligations - the Feb 2026 tariff understanding tied US market access to curbing Russian crude purchases
- India's non-aligned positioning gives it access to several blocs at once, which is an advantage only while it is not forced to choose