Basic HTML Version

|  | Table of Contents |  | View Full Version

Page 10 - The Indian EYE 112825
P. 10

    OPINION                                                           NOVEMBER 28, 2025        |  The Indian Eye 10

                    Economic Warfare and

            National Security Strategy

                Major powers are increasingly employing sanctions and financial controls to advance strategic

              objectives. India must incorporate economic statecraft into its national security strategy and boost
                        domestic capabilities to protect sovereignty in an increasingly contested global order

            SHAILENDRA GAVADE

                   lobalization has made modern
                   economies rely on complex,
            Gdispersed         manufacturing,
            transportation and logistics networks.
            Consequently, global supply chains
            have become a key battleground for
            economic warfare in the 21st century.
            Semiconductor  chips,  shipping  lanes
            and  payment  systems  are  the  key
            battlegrounds of the new economic
            warfare. Tools employed in economic
            warfare have, of course, deep histor-
            ical roots. The British Navy used na-
            val blockades during the Napoleonic
            Wars to stop French trade and com-
            merce. The Allied forces’ blockades    The relevance of economic warfare did not diminish after the Cold War. In fact, it became even more relevant as globalization grew (IDSA)
            against Germany caused shortages
            and unrest during World War I. Aeri-
            al bombings were undertaken during   Plan of Action (JCPOA). It showed  limited China’s chip output to less   every sector of the Russian econo-
            World War II towards targeting indus-  the  effectiveness  of  export  controls  than 7nm. The CHIPS Act incentiviz-  my. Central Russian banks were cut
            try and transport hubs to disrupt the   and sanctions as measures of econom-  es US industry to produce locally and   off from SWIFT, and Russian assets
            adversaries’ wartime capacity. The   ic warfare.                    reduces dependence on East Asia.   amounting to approximately US$
            Incheon Landing in the Korean War                                       Sanctions  make  it  difficult  for   250–350 billion were frozen. Vital
            of 1950 cut off North Korea’s supply   WEAPONIZATION OF SUPPLY      countries to access markets, technol-  technologies were banned from be-
            lines, forcing them to retreat quickly        CHAINS                ogies and financial systems. The fact   ing exported. Western countries also
            and shifting the course of the War.                                 that the US dollar and Western banks   restricted maritime insurance and
                The relevance of economic war-      he economic coercion resulting  are powerful has made these sanctions   imposed price caps on oil. The rou-
            fare did not diminish after the Cold    from the weaponization of sup-  even more effective. After 9/11, such   ble fell sharply, investments dried up,
            War. In fact, it became even more  Tply chains can have a significant  economic warfare methods were also   and capital left. In response, Russia
            relevant as globalization grew and   financial  impact.  China  stopped  ex-  used to fight terrorism and its perpe-  increased commerce with China, In-
            economic warfare tools became polit-  porting rare earth elements to Japan  trators. The ability to refuse access   dia and Turkey. Sanctions catalyzed
            ically driven instruments of influence.   in 2010 following a territorial dispute.  to  SWIFT  (Society  for  Worldwide   de-dollarization and the growth of
            The US put sanctions on India after   China accounts for 80–90 per cent of   Interbank Financial Telecommunica-  new trade networks in the Global
            it tested nuclear weapons in 1998 (as   the world’s supply of rare earth ele-  tion) has made sanctions a formidable   South. They hurt Russia’s economy
            it did after 1974). India was denied   ments. The Houthis’ operations in the  weapon. It allows freezing econom-  and technology, but they didn’t mod-
            access to nuclear fuel and technology   Red Sea also showed how controlling  ic reserves or imposing secondary   ify its strategic position. This shows
            due to these sanctions. Iraq faced oil   trade routes can hurt economies by  penalties. Such coercive economic   that sanctions are good at hurting but
            embargoes and limits on trade for its   breaking supply chains. The recent  punishments shape the strategic envi-  not so good at forcing political change
            invasion of Kuwait in 1990. However,   US–China technology rivalry centers  ronment before a confrontation. Sec-  in stronger states.
            the  most  significant  sanctions  were   on semiconductors, which are essen-  ondary sanctions are economic pun-
            those imposed on Iran in 2006 for its   tial for both military and digital capa-  ishments imposed on allies/partners   ECONOMIC WARFARE
            nuclear programme. The harsh sanc-  bilities. Washington seeks to prevent  of the primary targets. The US dollar   CHALLENGES AND INDIA’S
            tions cut Tehran from global bank-  Beijing from acquiring advanced chips  is the world’s main reserve currency,   RESPONSE
            ing, foreign investment and energy   and  tools  through export  bans  and  and systems like SWIFT act as the cen-
            exports. These long-lasting economic   political pressure. For example, it has  tral nervous system of global finance.  ndia’s GDP of almost US$ 4 tril-
            sanctions were a significant factor in   stopped ASML from supplying EUV   Russia was imposed with severe   lion makes it the fastest-growing
            Iran’s decision to engage in talks lead-  lithography machines and Nvidia from  sanctions post its invasion of Ukraine  Iand fourth-largest economy in
            ing to the 2015 Joint Comprehensive   selling advanced chips to China. It has  in 2022.[11] It affected practically   Continued on next page... >>

                                                                   www.TheIndianEYE.com

| 5 6 7 8 9 10 11 12 13 14 15 |