India at a Strategic Crossroads: Energy, AI, and an Old Rival

Inspired by commentary in The Economic Times
India has long prided itself on strategic foresight  reading global shifts early and positioning itself accordingly. That reputation is being tested. Across energy security, artificial intelligence policy, and its oldest rivalry, New Delhi finds itself reacting to events rather than shaping them. Three threads illustrate the pattern.

The Hormuz Problem Isn’t Going Away:
The Strait of Hormuz remains one of the world’s most consequential chokepoints, and Iran’s ability to threaten it  even implicitly  gives Tehran outsized leverage over any country dependent on Gulf oil, India included. Some analysts push back on how much this leverage really matters: closing or even meaningfully disrupting Hormuz would hurt Iran’s own oil exports and invite direct military confrontation it can ill afford, especially after its recent conflict with the US, so the threats may function more as signaling than a credible chokehold. Still, India has responded sensibly on one front regardless of how real the threat proves to be: it has spread its crude imports across roughly 40 countries, reducing dependence on any single supplier.

Diversification of sources isn’t the same as resilience, though. India still lags in strategic petroleum reserves and battery storage  the buffers that let a country absorb a supply shock without panic — and that gap matters more than the debate over Iran’s intentions, because it determines how much room India has to maneuver if a shock does arrive. As Gulf politics fragment further, with India’s relationships increasingly anchored to the UAE and Israel while Saudi Arabia settles into a purely transactional role, Iran’s re-emergence as both an oil supplier and a geopolitical actor adds a new variable. A pointed question follows: could Tehran use Hormuz leverage to pressure India on its warming relationship with Israel? It’s not a certainty  but it’s a scenario planners should take seriously precisely because the reserve gap leaves so little cushion.

There’s a related, more contested claim circulating: that the US has renamed its Indo-Pacific Command back to a narrower Pacific Command framing, read by some as a signal of waning American appetite for the region. This interpretation isn’t confirmed by official US statements, so it’s worth holding loosely. But even discounting it, India’s push to develop the Great Nicobar Islands and deepen Indian Ocean security partnerships makes sense as a hedge  Japan and Australia will likely need to carry more of the Quad’s weight either way, given how stretched US attention already is across multiple theaters.

Sovereign AI: A Real Debate, Not a Settled One:
A growing chorus in Indian policy circles argues the country needs sovereign AI capability  its own models, training data, and compute infrastructure  rather than relying on foreign frontier models for sensitive applications. The logic: AI is not merely a productivity tool but a geopolitical instrument, and access to a foreign company’s model today doesn’t guarantee access, or favorable terms, tomorrow. Palantir’s Alex Karp captured a version of this anxiety recently when he questioned, in blunt terms, why any country would want its critical decision-making dependent on Silicon Valley’s judgment calls. Shifting US export rules and recent access suspensions on frontier models lend the argument some weight: dependence can be revoked for reasons entirely outside India’s control.

The counterargument is just as grounded, though: building genuinely competitive frontier AI from scratch is extraordinarily capital- and talent-intensive, and duplicating that effort wholesale could mean India falls further behind on the applications that actually drive economic value in the near term. A more measured path  becoming a major deployment hub, the “shopfloor” for AI applications, while pursuing sovereignty selectively in narrow high-sensitivity domains like defense and critical infrastructure  may capture most of the security benefit without the cost of reinventing frontier research. Britain and a handful of other US allies are reportedly weighing similar trade-offs, which suggests this isn’t a uniquely Indian dilemma but a broader question facing any country whose most advanced AI systems originate elsewhere.

Pakistan Reads an Opening:
Meanwhile, an older front is stirring. Pakistan’s military leadership, buoyed by a period of warmer engagement with Washington, appears to be testing whether India  perceived as preoccupied with its own friction points with the US  might be receptive to renewed dialogue on its terms. Signs include track-two dialogue chatter, social media campaigns pushing for talks, and renewed pressure around the Indus Waters Treaty. Skeptics would note that track-two dialogues and treaty disputes surface periodically regardless of any coordinated campaign, and reading every diplomatic signal as a calculated pressure play risks overinterpreting normal noise.
That said, the convergence is what makes this moment different from routine friction: treaty pressure, dialogue overtures, and calls to unwind India’s post-Op Sindoor posture arriving in close succession is the kind of pattern that has historically preceded shifts in Pakistani strategy. It’s reasonable for Indian policymakers to treat it as more than coincidence, even while acknowledging that any individual data point, taken alone, would be unremarkable.

The Common Thread:
What connects energy, AI, and Pakistan policy is less any single failure than a shift in posture: India built much of its recent strategic confidence on assumptions  steady oil flows, dependable access to Western technology, a US firmly anchored in the Indo-Pacific  that are now all, to varying degrees, in flux. None of these developments is individually catastrophic. Together, they argue for an India that plans for contingencies rather than assumes continuity.