There is a particular kind of intellectual vertigo that sets in when one observes the United States imposing sweeping tariffs on imports, the European Union erecting subsidy walls around its green industries, and Western capitals simultaneously lecturing the developing world on the virtues of open markets. The contradiction is not incidental. It is, in a meaningful sense, structural – a recurring feature of how powerful nations have always navigated the tension between universal principles and particular interests.The historical record is instructive, if uncomfortable. Britain, the original champion of free trade, industrialised behind formidable protectionist barriers in the eighteenth and early nineteenth centuries before discovering the virtues of liberalised commerce once its manufacturers had achieved a decisive competitive edge. The US followed a similar path: high tariffs underwrote its industrialisation through much of the nineteenth century, as economic historian Ha-Joon Chang has carefully documented.A historical paradoxThe advocacy of free trade that accompanied the Washington Consensus era, through International Monetary Fund (IMF) and World Bank reforms and later World Trade Organisation (WTO)-led liberalisation, thus emanated from countries whose own rise had been shaped not by unfettered markets, but by varying combinations of protectionism, industrial policy, and state support. This is not to suggest that trade openness is without merit. It is to note that the timing and terms of its advocacy have rarely been disinterested.Today, the wheel has turned again. Recent developments have reinforced this historical paradox. The Biden administration’s Inflation Reduction Act (2022) offered hundreds of billions of dollars in industrial subsidies, effectively discriminating against non-US manufacturers of electric vehicles and clean technology. The Trump administration’s second term has added punishing tariffs on a wide range of imports, including from longstanding allies. The CHIPS and Science Act of 2022 reflects a deliberate policy of supply-chain reshoring in semiconductors. None of this is necessarily wrong as domestic policy – strategic industrial policy has a long and defensible history. What is striking is the simultaneous insistence, maintained in multilateral forums and bilateral pressure campaigns, that developing economies should refrain from comparable measures. The rules, it appears, are for others.The pattern repeats with particular sharpness in the domain of climate. The Intergovernmental Panel on Climate Change (IPCC) has established beyond reasonable scientific doubt that the accumulated stock of greenhouse gases in the atmosphere – the primary driver of present warming – is overwhelmingly the product of industrialisation in Europe and North America over the past two centuries. The principle of Common But Differentiated Responsibilities (CBDR), codified in the 1992 UNFCCC framework, acknowledged this historical asymmetry and held that richer countries should bear a larger share of mitigation costs. In practice, this commitment has been honoured more in language than in substance.The promise of $100 billion per year in climate finance for developing nations by 2020, made at Copenhagen in 2009, was not fulfilled on time and much of what was eventually counted consisted of loans rather than grants. The more ambitious goal of mobilising $1.3 trillion annually in climate finance by 2035, endorsed at COP29 in Baku in 2024, continues to face serious questions regarding additionality, implementation, and the balance between public and private funding.Meaningful transfer of clean technology – particularly proprietary green technologies held by private corporations in advanced economies – has remained structurally limited. Meanwhile, carbon credit mechanisms, while not inherently flawed in design, have in practice often served to allow continued emissions in wealthy countries while generating uncertain co-benefits in host nations.A country like India, which has one of the world’s lowest historical per-capita emissions records, faces growing pressure to accelerate its energy transition even as it struggles to provide reliable electricity to hundreds of millions of citizens. The developmental tension here is real and cannot be dissolved by moral exhortation alone.A deeper philosophical contradictionThere is a deeper philosophical contradiction worth examining. The dominant Western development paradigm, of which Walt Rostow’s Stages of Economic Growth (1960) is perhaps the most famous articulation, positions mass consumption as the telos of development – the end-state towards which all societies are presumed to be progressing. This model, which shaped decades of development economics and aid conditionality, implicitly universalises a particular form of industrial capitalism. The ecological limits of generalising this model to eight billion people are now evident.Several intellectual and civilisational traditions – including, it should be noted, strands within Indian thought – have long articulated alternative conceptions of the good life centred on moderation, sufficiency, and ecological balance. These are not merely romantic or pre-modern ideals; they increasingly represent a serious contribution to debates about sustainable development. The irony is that a global order which has promoted mass consumption as the universal benchmark of human progress now also demands environmental restraint from those who have consumed the least.The architecture of international finance presents analogous contradictions. The dollar’s centrality to global commerce is a product of specific historical circumstances: the Bretton Woods agreements of 1944 institutionalised the dollar as the world’s reserve currency, a status that survived the Nixon administration’s suspension of dollar-gold convertibility in 1971. This “exorbitant privilege,” as French finance minister Valéry Giscard d’Estaing memorably called it, allows the US to run persistent current account deficits, borrow cheaply in its own currency, and conduct monetary policy with less regard for external constraints than any other economy.More consequentially, dollar dominance gives Washington extraordinary leverage over the global financial system. The weaponization of this leverage – through sanctions regimes, exclusion from SWIFT messaging infrastructure, and secondary sanctions that penalise third-country firms for doing business with targeted states – has become an increasingly prominent instrument of American statecraft.It is worth being precise here, because popular discourse often overstates the case. The claim that specific US military interventions in the Middle East were primarily motivated by the desire to defend dollar hegemony is more a political narrative than an established historical finding; the causes of those conflicts were complex and contested. What is empirically supportable is the broader point: The US has demonstrated a clear willingness to use its financial infrastructure as a coercive instrument, and this has generated significant anxiety among countries that find themselves on the wrong side of American foreign policy.Russia’s exclusion from SWIFT following its invasion of Ukraine in 2022 accelerated already existing trends toward de-dollarisation. BRICS nations have discussed alternative payment arrangements, and India has itself experimented with rupee-denominated trade settlements with Russia and a handful of other partners. These are early-stage experiments with real operational and liquidity constraints, but they signal a structural shift in how countries are thinking about financial resilience.India’s position in this landscape is both advantageous and delicate. New Delhi has, with considerable skill, maintained channels of engagement with Washington, Moscow, Riyadh, and Beijing simultaneously – a balancing act that would have seemed improbable a decade ago. India’s decision to continue purchasing discounted Russian crude after 2022, despite Western pressure, was a pragmatic exercise of strategic autonomy that served genuine national economic interests.India’s G20 presidency in 2023 allowed it to articulate Global South concerns on climate finance and debt restructuring with unusual prominence. At the same time, India’s growing alignment with the US on technology, defence, and supply chains through frameworks like the Quad and I2U2 reflects a realistic assessment of where long-term structural interests lie.Alignment with the US cannot be called strategic autonomy in foreign policyAt this point, we should know where our interests lie. We have aligned with the US in what is well understood in the world as a rogue elephant acting unilaterally on many matters: withdrawing from the Paris Climate Protocol thus abdicating from US responsibility for being the biggest cause of climate change and highest per capita emitter of greenhouse gases (GHGs); withdrawing from its obligations to UN and its agencies; imposing unilateral economic sanctions on all and sundry, including secondary sanctions on India by threatening penalty tariffs of 50%, the highest on any country; signing an interim trade deal which is patently biased in favour of the US; quite apart from imposing tariffs on all and sundry in gross violation of own US law (as proven by the US Supreme Court judgment striking down US unilateral tariffs); and so on. This cannot be called strategic autonomy in foreign policy.Further, aligning against Iran in what most regard as an illegal war of aggression was neither consistent with India’s long-standing doctrine of strategic autonomy nor strategically prudent, as it reduced New Delhi’s room for manoeuvre in safeguarding the safe passage of Indian ships and oil tankers through the Persian Gulf, particularly in the event of Iran closing the Strait of Hormuz. Iran has been strategic ally, quite apart from being a civilisational friend of India for decades.India invested at least $110 million in the Chabahar port in Iran, to connect Indian commerce to a North-South route through Afghanistan to the Central Asian states and Russia and beyond, with whom India has close economic ties, which could grow further. The result of our switching alignment means that our investment in Chabahar is actually being used by China, which steadfastly supported Iran before and during the war with Israel-US.Worse, our shipping and imports have been serious disrupted, while China’s has faced minimal impact. Worse still, Iran is a member of BRICS, of which India is Chair in 2026; the Delhi Summit of the 11 BRICS nations is due in September 2026. In that year, we have abandoned a long-time friend, Iran, and suffered isolation in BRICS – and seen the Indian flag burnt in a country where hundreds of thousands of Indian migrants live, work and send back huge remittances.Notably, India could have emerged as a leader of alternative payments mechanism in the already gathering pace of de-dollarisation across the globe during the BRICS Summit. Perhaps India’s economic policy makers are not aware that the US has a reserve currency in which central banks hold their foreign exchange reserves (usually in the form of US Treasuries) and it has been systematically shrinking – indicating the shrinking power of the US hegemon.Two decades ago, the US dollar accounted for around 70% of global forex reserves; today that share is 56%. Here we mean IMF COFER foreign exchange reserves (which include only foreign currency assets and exclude gold). More importantly, in the light of US’s hegemonic behaviour, the Korean, Japanese, Chinese and Indian central banks have been internationally buying and building up gold stocks as an increasing component of forex reserves.Apparently, gold accounted for about 20% of total forex reserves (including gold) in 2020; today that share is about 25-27% (partly due to higher gold valuations, partly purchases by central banks). The result is the share of the USD is actually barely 40% or so in global forex reserves (broadly defined).By supporting BRICS, India could enhance its strategic autonomyBy supporting the BRICS Pay arrangements, and pushing that process along in India’s role as BRICS Chair in 2026, India would be enhancing its strategic autonomy, and reducing our vulnerability to possible future US economic sanctions. The fact that India has already been subjected to secondary economic sanctions (“you can’t buy Russian oil without our permission”) should be ringing alarm bells in the Ministry of Finance. By contrast, India seems so aligned with the US, that it is finding itself isolated in the BRICS, who are united in their opposition to the illegal aggression against Iran, a BRICS member, and now clearly a major power in West Asia – after roundly defeating the USA-Israel combine.The question is not whether India should be pro-Western or anti-Western – that is a false and increasingly obsolete frame. The question is what India must build, and how, to navigate a world in which the rules of the international order are more openly contested than at any point since 1945.Several lessons suggest themselves. First, strategic autonomy is not merely a rhetorical posture but a capability that must be built through diversified trade partnerships, so that no single economic relationship acquires the power to coerce. Second, domestic manufacturing capacity – particularly in electronics, semiconductors, pharmaceuticals, and clean energy – is not merely an industrial policy goal but a geopolitical necessity; the vulnerabilities exposed by supply-chain disruptions during COVID-19 and the semiconductor shortage of 2021-22 were a clear warning. Third, technology self-reliance, especially in critical digital infrastructure, communications, and emerging defence systems, must be treated as a strategic priority, not merely a commercial one.Fourth, India should engage climate diplomacy from a position of principle and confidence, insisting on the enforcement of historical commitments on finance and technology transfer as a precondition for more ambitious developing-country pledges – rather than accepting a framework in which the burden of adjustment falls disproportionately on those least responsible for the problem. Fifth, financial resilience – including gradual internationalisation of the rupee, development of alternative payment mechanisms as the BRICS Pay mechanism, and reduced over-dependence on dollar-denominated reserves and transactions – deserves sustained institutional attention, even if de-dollarization remains a long-term rather than near-term objective.None of this requires India to adopt an adversarial posture toward the existing international order. The rules-based system, for all its imperfections and selective application, has served Indian interests in important respects. What it does require is a clear-eyed recognition that universal principles in international affairs have always had powerful national interests as their underwriters – and that India, as it grows in economic and strategic weight, must develop both the capacity and the confidence to shape those rules, rather than simply receive them.The world is not asking India to choose sides. It is asking India to choose wisely.Santosh Mehrotra is a former Professor of Economics at Jawaharlal Nehru University. Baikunth Roy is Assistant Professor of Economics at Patliputra University.