As geopolitics turns turbulent, India may need new ways to protect its strategy autonomy

At a stretch, even a small country like Laos can probably offer India some partial lessons. Here is why.

The landlocked southeast Asian country Laos earned a rather unenviable distinction during the mid-1960s and early 1970s: it became the world’s most bombed country on a per capita basis.

Between 1964 and 1973, US bomber planes discharged over 2 million tonnes of ordnance over Laos, which works out to about a planeload of munitions every eight minutes over nine years. A lot of unexploded stuff is still out there, detonating even now and causing damage to life and limb.

The US had two reasons to dump so much incendiary material: Laos had not only become a staging platform for North Vietnam president Ho Chi Minh’s assault on South Vietnam, running circles around US forces, he also used the opportunity to aid a communist rebel uprising against the Laotian monarchy.

After the smoke cleared, Ho Chi Minh was able to successfully integrate North and South Vietnam, Laos became a communist republic and the US retreated battered and bruised, but its then secretary of state Henry Kissinger was awarded the Nobel Peace Prize in 1973.

Cut to the present. The US is ironically among the top five sources of tourist arrivals in Laos, the other four being Thailand, China, Vietnam and South Korea. Tourism is fetching Laos increasing revenues. The first 10 months of 2025 (January-October) saw a 13% growth in tourist arrivals; specifically, tourists from the US increased 15%. America also has a trade and investment agreement with Laos, which has shown signs of expanding.

The incongruity of Laos welcoming investment and tourists from a country that had bombed it so extensively could be viewed through a spiritual lens, as a manifestation of the country’s Buddhist temper: letting go of the past, freed from the burden of revenge by letting perpetrators face the consequences of their actions.

At a temporal level, Laos is walking down the path of economic pragmatism as its socialist government gradually harnesses market forces. And then, when all was going well, the US hit the tiny country with a 40% tariff.

Interestingly, neighbour China is also sending a large number of tourists every year, almost a quarter of all tourist arrivals. Beijing’s rail link with Laos, part of its Belt-Road Initiative, is bringing in goods and passengers in large quantities. The link is now being extended to Thailand and Vietnam, among others, to reduce the transit time for Chinese and Laotian goods headed westwards.

Beyond China, the country is actively looking at its neighbourhood, specifically fellow members of the Association of Southeast Asian Nations (Asean) for increased economic resilience. Landlocked Laos shares its borders with China, Myanmar, Thailand, Cambodia and Vietnam.

This accelerated outreach even found a mention in the International Monetary Fund’s (IMF) recent country report: “…initiatives underway to upgrade connectivity, logistics and facilitate digital transactions, especially within the Asean, could substantially bolster growth and external balances."

Why is this significant for India? Well, for one, India’s relationships in its neighbourhood are shot through. As are deep and old civilizational ties in many parts of West Asia, eroded in part by the compulsions of sectarian domestic politics.

Further east, India has a $123-billion trade relationship with Asean, but grumbles about its imbalance (a $45-billion deficit during 2024-25) has strained ties. The ruling party has been complaining about a lopsided India-Asean free trade agreement since it came to power in 2014, but the needle has scarcely moved during the past 11 years.

Instead, the government has focused on concluding trade deals with individual member nations. The Asean trade pact is currently being reviewed under the umbrella of the India-Asean Comprehensive Strategic Partnership (2026-2030), which will hopefully remedy the situation.

Then there is the dragon in the room. Border skirmishes in 2020 strained the Sino-Indian relationship. But, amid all the anti-China political rhetoric, India’s imports from its northern neighbour between 2020-21 and 2024-25 have grown 74% while its trade deficit more than doubled.

Inexplicably, there seems to be a twin-track approach at play: the interests of Indian importers and intermediaries routing Chinese goods to India have seemingly found precedence over political compulsions.

Fortunately, early signs of a thaw are emerging, with Chinese President Xi Jinping invoking the Panchsheel Agreement in a meeting with Prime Minister Narendra Modi in August. Hopefully, this will culminate in an alignment of New Delhi’s economic and political objectives.

Laos and India are very dissimilar in terms of history, size and complexity. Yet, Laos offers valuable lessons: when faced with adversity and rapidly shifting geopolitical equations, it has pivoted to a new strategy that has the IMF’s approval. India too needs a smart pivot during 2026 to ensure that its strategic autonomy does not transform into strategic isolation.

The author is a senior journalist and author of ‘Slip, Stitch and Stumble: The Untold Story of India’s Financial Sector Reforms’ @rajrishisinghal.