Key Details
The Ministry of External Affairs’ Annual Report 2025 presents India’s foreign policy as an effort to preserve strategic autonomy while building practical partnerships around connectivity, security, technology, trade and development.
Policy Front | Significant Development in 2025 |
|---|---|
Neighbourhood | Cross-border power, rail, waterways and infrastructure links expanded, including electricity flows involving India, Nepal and Bangladesh |
Major powers | Engagement resumed with China, the India-US COMPACT was launched, and India and Japan adopted a ten-year joint vision and new security declaration |
Indian Ocean | India advanced the MAHASAGAR framework and assumed the IORA chairship for 2025–27 |
Security | The Pahalgam terror attack prompted diplomatic measures and Operation Sindoor, alongside a wider international counterterrorism campaign |
Global South | India used the G20, BRICS, UN and other forums to advance proposals on health, skills, technology, critical minerals and institutional reform |
Connectivity Became the Practical Core of Neighbourhood Policy
India’s Neighbourhood First policy increasingly operated through shared infrastructure rather than diplomatic engagement alone.
Bangladesh imported approximately 2,750 MW of electricity from India, while Nepal received approval to export 1,131 MW to the Indian market. A regional electricity transaction also began, with 40 MW flowing from Nepal to Bangladesh through the Indian grid.
India and Nepal agreed to develop two new 400 kV cross-border transmission lines, while rail, road and hydropower projects continued. With Bangladesh, India advanced inland-waterway connectivity through joint dredging of the Brahmaputra and Kushiyara rivers, which is particularly important for access to the Northeast.
These arrangements create mutual economic stakes in stable relations. They also place India at the centre of an emerging South Asian energy and connectivity network.
Strategic Autonomy Meant Engaging Competing Powers Simultaneously
The report’s account of 2025 shows India pursuing deeper cooperation with different major powers without aligning exclusively with any one bloc.
India-China engagement resumed cautiously. Prime Minister Narendra Modi met President Xi Jinping during the SCO Summit, direct flights restarted in October, and the Kailash Mansarovar Yatra reopened. Border discussions continued through the established diplomatic and Special Representative mechanisms.
Economic asymmetry remained unresolved: bilateral trade reached $96.46 billion up to November 2025, while India’s deficit stood at $75.05 billion.
With the United States, the two countries launched India-US COMPACT, covering defence, technology, energy, trade and investment. They also announced Mission 500, which seeks to raise bilateral trade to $500 billion by 2030.
India marked 25 years of strategic partnership with Russia, while India and Japan adopted a joint vision for the next decade and a revised security-cooperation framework. Taken together, these engagements show strategic autonomy being exercised through multiple overlapping partnerships, not diplomatic distance.
India Broadened Its Indian Ocean and Indo-Pacific Engagement
India’s Indo-Pacific policy extended across ASEAN, the East Asia Summit, the Quad, the Indian Ocean Rim Association and several subregional mechanisms. It combined maritime security with disaster response, connectivity, capacity building and economic cooperation.
India assumed the chairship of the Indian Ocean Rim Association for 2025–27, providing an opportunity to influence regional cooperation on maritime safety, trade, disaster resilience and the blue economy.
The report also places Myanmar at the intersection of the Act East and MAHASAGAR frameworks. Political instability there therefore affects not only border management but also India’s intended physical connection with Southeast Asia.
What Is MAHASAGAR?
MAHASAGAR stands for Mutual and Holistic Advancement for Security and Growth Across Regions.Introduced as an expansion of the earlier SAGAR vision, it frames India’s maritime engagement around security, economic growth, connectivity, capacity building and cooperation with countries beyond the immediate Indian Ocean neighbourhood.
Its policy significance will depend on whether it produces coordinated projects and institutions, rather than becoming another umbrella term for existing maritime activities.
Pahalgam Reshaped the Security Narrative
Following the April 2025 Pahalgam terror attack, India combined military action under Operation Sindoor with a wider diplomatic campaign against cross-border terrorism.
The report records references to the attack and terrorism concerns in statements from the UN Security Council, Quad and BRICS, among others. India also maintained counterterrorism working groups with 26 countries and engaged institutions including the Financial Action Task Force, ASEAN Regional Forum and Shanghai Cooperation Organisation.
This marked an effort to establish India’s response not as an isolated bilateral confrontation with Pakistan, but within a broader international discussion on state-supported and cross-border terrorism.
Global South Diplomacy Moved Towards Specific Proposals
At the 2025 G20 Summit in Johannesburg, India proposed initiatives covering a traditional-knowledge repository, African skills, emergency healthcare, open satellite data, critical-mineral circularity, talent mobility and the drug-terror nexus.
India also participated in BRICS discussions on climate finance, artificial-intelligence governance and socially determined diseases, while continuing to advocate reform of the UN Security Council and other multilateral institutions.
The test now lies in whether these proposals acquire funding, participating countries and implementation mechanisms.
Policy Relevance
Regional connectivity raises the cost of political disruption. Cross-border electricity, transport and waterways can stabilise relations, but they require reliable payment arrangements, common regulations and protection from domestic political reversals.
Strategic autonomy increasingly depends on economic capability. India can maintain diversified partnerships only if it reduces technological and trade vulnerabilities, including its large deficit with China and dependence on imported critical inputs.
Institutional leadership creates a limited window for delivery. India’s IORA chairship and prominent role across BRICS and the G20 provide platforms to convert its proposals into working programmes. Announcements without finance, governance arrangements or measurable outcomes will weaken that influence.
Foreign and domestic policy are converging. Energy security, critical minerals, digital infrastructure, industrial capacity and transport connectivity now shape India’s diplomatic leverage as much as conventional political engagement.
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