Hey readers,
I have been writing a lot about geoeconomics in my 'The Reason Why' column. I have observed that even though countries celebrate self-reliance in their internal politics, they are keen to strengthen partnerships with other countries (sometimes desperately). They know they cannot build everything themselves.
India has made good progress in attracting semiconductor manufacturing. Even before the first Made-in-India chips come out of these factories, it has launched Semicon 2.0 to build the suppliers, research and technology needed around them.
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Malaysia shows why this is difficult. It became a major semiconductor assembly and testing hub by attracting foreign companies with infrastructure, incentives and low-cost manufacturing. But much of the advanced technology stayed with those foreign companies.
India will also need global companies to move up the value chain. The real challenge is learning from them, building those capabilities in India and eventually creating Indian companies that own the technology. That's what I wrote in Semicon 2.0 Won't Be A Cakewalk.
This year, Europe could have a difficult winter.
It is reducing its dependence on Russian gas and importing more from Norway and the US. Then came the war in Iran, which disrupted LNG cargoes from Qatar. There is now less gas available for the world, and everyone has to compete for the same cargoes. And something quite interesting happens here.
When Asian demand falls because prices become too high, more LNG becomes available for Europe. When Asian buyers start bidding aggressively, Europe faces more pressure. So, Europe's gas security depends partly on what happens in Asia.
From India, we went to Europe. Now, let's turn to ASEAN.
ASEAN has realised that no economy is an island. It needs different partners, and that fits well with its long-standing policy of non-alignment.
China brings scale and capital. Japan brings industrial experience and technology. South Korea brings manufacturing, batteries and increasingly AI and critical-mineral partnerships. India brings services, digital infrastructure and strategic connectivity.
ASEAN is working with all four. It is now spreading its wings by upgrading its relationships with Japan, South Korea, China and India. This gives the region more choices, but it also means managing more dependencies.
Indonesia's nickel industry offers an important lesson. Partnerships can build industries and move countries up the value chain, but dominant partners can limit their options. And this perhaps captures the biggest shift in how countries are thinking about economic policy today.
For a long time, the question was: Where can I get this most efficiently? Now it is increasingly: Who can I work with, and how much dependence am I comfortable with?
That changes the way governments think about semiconductors, energy, critical minerals, technology and even trade. The answer, therefore, is not complete self-reliance. It is having enough capabilities and enough relationships that one dependency does not become a vulnerability.
That may be the real value of diversification. India too will have to learn this balance as it moves deeper into global supply chains.
That's the week.
If you made it this far, I'd love to hear from you.
Which of these stories stayed with you? What stories can you share around these topics?
And more importantly, what should I dig into next?
An everyday object, a policy, a price that suddenly changed, a trend that's growing around... send it my way. Just hit reply. I read everything.
See you next Saturday.
Cheers, Swapnil
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article
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