By : Khushbu Ahlawat, Consulting Editor, GSDN

Introduction

The recent political developments in Nepal mark a critical juncture not only in its domestic political trajectory but also in the broader geopolitical architecture of South Asia. The formation of a new leadership framework amid shifting electoral preferences reflects an evolving democratic consciousness, where governance delivery, economic stability, and institutional credibility have become central electoral concerns. This transformation is unfolding at a time when regional power competition between India and China is intensifying, thereby magnifying Nepal’s strategic importance. Recent events further underscore this transition. The reconfiguration of coalition politics in 2024–2025, marked by shifting alliances among major parties, has highlighted both the dynamism and fragility of Nepal’s parliamentary democracy. Additionally, increasing youth participation—driven by digital mobilization and socio-economic grievances—has introduced new political narratives centered on accountability and reform. These developments suggest that Nepal is entering a phase where domestic political restructuring and external strategic recalibration are deeply intertwined.

In this context, Nepal’s trajectory cannot be understood in isolation. Its political transformation is embedded within a larger contest over influence, connectivity, and economic integration in the Himalayan region. The emerging question is whether Nepal can successfully navigate this complex landscape to achieve both internal stability and external strategic autonomy.

Political Renewal, Coalition Fluidity, and Democratic Pressures

Nepal’s recent elections and subsequent political realignments reveal a pattern of coalition fluidity that continues to shape governance outcomes. The frequent shifts in alliances—particularly the recalibration of partnerships between major communist factions and centrist parties in 2024—reflect both strategic maneuvering and ideological ambiguity. While such flexibility allows political actors to adapt to changing circumstances, it also undermines policy continuity and governance stability.

A key feature of this phase is the rise of non-traditional political forces and independent candidates, many of whom gained traction in urban constituencies. These actors have capitalized on public dissatisfaction with corruption, bureaucratic inefficiency, and lack of economic opportunities. The growing influence of such groups indicates a gradual transition from identity-based politics to issue-based electoral behavior. However, their limited organizational capacity raises questions about their ability to sustain long-term political influence.A crucial yet often overlooked aspect of Nepal’s governance crisis lies in the structural limitations of its federal system, which was institutionalized through the Constitution of Nepal 2015. While federalism was envisioned as a mechanism to decentralize power, enhance inclusion, and address historical marginalization, its implementation has encountered significant administrative and political challenges. Provincial and local governments frequently face resource constraints, unclear jurisdictional boundaries, and limited bureaucratic capacity, which undermine their effectiveness. This institutional fragmentation has, in many instances, resulted in policy duplication, coordination failures, and inefficient public service delivery. Moreover, political parties continue to exercise centralized control over decision-making, limiting the autonomy of subnational units and diluting the transformative potential of federalism. Recent debates within Nepal’s political discourse have increasingly questioned whether the current federal structure is financially sustainable and administratively viable, especially given the country’s constrained economic base. At the same time, federalism remains politically sensitive, as it is closely tied to issues of identity, representation, and inclusion. Any attempt at reform must therefore balance efficiency with equity, ensuring that governance restructuring does not exacerbate existing social and regional disparities. Strengthening intergovernmental coordination mechanisms, enhancing fiscal decentralization, and investing in administrative capacity at the local level will be critical for realizing the intended benefits of federalism. Ultimately, the success of Nepal’s political renewal will depend not only on leadership change but also on the ability to reform and consolidate its institutional architecture in a manner that promotes stability, accountability, and inclusive governance.

Moreover, democratic pressures are intensifying due to socio-economic realities. Nepal continues to face high youth unemployment and significant labor migration, particularly to Gulf countries and Southeast Asia. Remittances remain a major pillar of the economy, accounting for over 20% of GDP in recent years. While this inflow provides short-term economic stability, it also exposes structural weaknesses in domestic job creation. The new leadership must therefore address these systemic challenges to maintain democratic legitimacy and prevent political disillusionment.

Strategic Autonomy in the Shadow of India–China Competition

Nepal’s foreign policy continues to be defined by its practice to maintain strategic autonomy while engaging with competing regional powers. The intensification of India–China rivalry has transformed Nepal from a peripheral state into a critical geopolitical pivot. Recent developments, such as China’s continued push under the Belt and Road Initiative and India’s renewed focus on neighborhood diplomacy, have heightened this competition.

China’s engagement in Nepal has expanded beyond infrastructure to include digital connectivity, energy cooperation, and cross-border trade facilitation. Projects such as the Trans-Himalayan Multi-Dimensional Connectivity Network have the potential to reduce Nepal’s dependence on Indian transit routes. However, delays in implementation and concerns over financial sustainability have generated domestic debate about the long-term implications of such partnerships.

Simultaneously, India has intensified its outreach through high-level diplomatic engagements, infrastructure investments, and energy cooperation agreements. The signing of long-term power trade agreements in 2024, enabling Nepal to export hydropower to India, represents a significant step toward economic integration. Additionally, cross-border railway and road connectivity projects are being accelerated to strengthen bilateral ties.

For Nepal, the challenge lies in leveraging these competing interests without compromising its sovereignty. A miscalculation could lead to strategic overdependence or diplomatic friction. Therefore, Nepal’s foreign policy must prioritize diversification of partnerships, including engagement with multilateral institutions and other regional actors, to ensure a balanced and resilient strategic posture.An equally important yet often underexplored dimension of Nepal’s strategic recalibration is the growing role of extra-regional actors and multilateral frameworks in shaping its foreign policy choices. In recent years, countries such as the United States and organizations like the Millennium Challenge Corporation have increased their engagement with Nepal, particularly through infrastructure financing and governance-oriented projects. The ratification and implementation of the MCC compact in Nepal, despite intense domestic political contestation, reflects Kathmandu’s attempt to diversify its external partnerships beyond the traditional India–China binary. This diversification strategy is not merely economic but also geopolitical, as it allows Nepal to mitigate risks associated with overdependence on any single power. Simultaneously, Nepal’s participation in multilateral forums such as BIMSTEC and SAARC underscores its aspiration to position itself as an active stakeholder in regional governance. However, this expanding engagement also introduces new complexities. The intersection of U.S. strategic interests in the Indo-Pacific with China’s regional ambitions creates a layered geopolitical environment in which Nepal must operate with heightened caution. Domestic political narratives often frame such engagements through ideological lenses, leading to polarization and policy delays. Therefore, the success of Nepal’s multi-vector foreign policy will depend on its ability to institutionalize decision-making processes, enhance diplomatic capacity, and maintain transparency in international agreements. By doing so, Nepal can transform external engagement from a source of vulnerability into an instrument of strategic leverage, reinforcing its autonomy while contributing constructively to regional stability.

Economic Transformation, Infrastructure Politics, and Developmental Challenges

Economic development remains the cornerstone of Nepal’s political agenda, yet progress has been uneven. Recent years have witnessed modest GDP growth, supported by remittances, tourism recovery post-COVID-19, and increased infrastructure spending. However, structural constraints—such as limited industrialization, weak governance, and inadequate infrastructure—continue to hinder sustained growth.

Infrastructure development has emerged as a key arena of both domestic policy and international competition. Hydropower projects, in particular, hold significant potential for transforming Nepal’s economy. Agreements with India to export electricity and ongoing collaborations with Chinese firms in hydropower construction illustrate the strategic importance of this sector. Yet, delays, environmental concerns, and regulatory bottlenecks often impede progress. Tourism, another critical sector, is gradually recovering, with Nepal promoting itself as a destination for adventure and cultural tourism. The government’s efforts to attract international investment and improve infrastructure around key tourist sites reflect a broader strategy to diversify economic growth drivers. However, political instability and policy inconsistency remain significant deterrents to foreign investors.

Furthermore, Nepal faces the pressing challenge of climate vulnerability. Glacial melting, erratic monsoon patterns, and natural disasters pose risks to infrastructure and livelihoods. Integrating climate resilience into development planning is therefore essential. The intersection of economic growth, environmental sustainability, and geopolitical competition makes Nepal’s development trajectory particularly complex and consequential.Another critical dimension shaping Nepal’s economic trajectory is the intersection of digital transformation and governance reform, which is increasingly emerging as a decisive factor in state capacity and development outcomes. In the post-pandemic era, Nepal has witnessed a gradual expansion of digital infrastructure, including mobile connectivity, digital payment systems, and e-governance initiatives. The government’s push toward digitization—ranging from online public service delivery to digital financial inclusion—has the potential to enhance transparency, reduce bureaucratic inefficiencies, and improve citizen-state interactions. However, the pace of digital adoption remains uneven, particularly between urban and rural regions, reflecting persistent structural inequalities. International partnerships are playing a crucial role in this domain, with both India and China supporting digital connectivity projects, while global institutions provide technical and financial assistance. At the same time, the expansion of digital ecosystems introduces new challenges related to data governance, cybersecurity, and regulatory oversight. Nepal’s institutional capacity to manage these emerging risks remains limited, raising concerns about digital sovereignty and external influence. Furthermore, the integration of digital technologies into economic planning must be accompanied by investments in education, skill development, and innovation ecosystems to ensure inclusive growth. If effectively harnessed, digital transformation could enable Nepal to leapfrog traditional development constraints, fostering entrepreneurship, improving service delivery, and enhancing economic resilience. Conversely, failure to address digital divides and governance gaps could exacerbate existing inequalities, undermining the broader objectives of sustainable development. Thus, the digital domain represents both an opportunity and a test of Nepal’s ability to align technological advancement with inclusive and accountable governance.

India–Nepal Relations: Reset, Realignment, and Regional Implications

The evolving political landscape in Nepal offers a timely opportunity to recalibrate its relationship with India. Recent diplomatic engagements, including high-level visits and bilateral agreements, signal a renewed commitment to strengthening ties. The focus has shifted toward pragmatic cooperation in areas such as energy, trade, and connectivity.

One of the most significant developments has been the expansion of energy cooperation. Nepal’s hydropower exports to India are expected to increase substantially in the coming years, positioning Nepal as a key player in the regional energy market. This economic interdependence has the potential to transform bilateral relations from a historically asymmetrical dynamic into a more mutually beneficial partnership. At the same time, longstanding issues—such as border disputes and perceptions of political interference—continue to influence public sentiment in Nepal. Addressing these concerns requires sustained diplomatic engagement and confidence-building measures. India’s approach must evolve to accommodate Nepal’s growing assertion of sovereignty and its desire for diversified international partnerships.

Regionally, the trajectory of India–Nepal relations has broader implications. A stable and cooperative relationship can contribute to regional integration and economic connectivity in South Asia. Conversely, tensions could create opportunities for external actors to expand their influence, thereby altering the regional balance of power. The stakes, therefore, extend beyond bilateral dynamics to encompass the future of regional geopolitics.

Conclusion

Nepal’s ongoing political transition represents a pivotal moment in its history—one that carries profound implications for both domestic governance and regional geopolitics. The convergence of political renewal, economic aspirations, and strategic recalibration has created a unique opportunity for Nepal to redefine its role in the international system. Yet, this moment is also fraught with uncertainty. The challenges of coalition instability, economic vulnerability, and geopolitical pressure require careful navigation and strategic foresight. The success of Nepal’s new leadership will depend on its ability to deliver tangible outcomes while maintaining a delicate balance between competing external interests.

Looking ahead, Nepal’s trajectory will likely serve as a litmus test for the viability of small-state diplomacy in an era of great power competition. If it can effectively leverage its strategic position, strengthen its institutions, and pursue inclusive development, Nepal has the potential to emerge as a model of resilient and adaptive statecraft. In doing so, it will not only secure its own future but also contribute to shaping the evolving geopolitical landscape of the Himalayan region and beyond.

About the Author

Khushbu Ahlawat is a research analyst with a strong academic background in International Relations and Political Science. She has undertaken research projects at Jawaharlal Nehru University, contributing to analytical work on international and regional security issues. Alongside her research experience, she has professional exposure to Human Resources, with involvement in talent acquisition and organizational operations. She holds a Master’s degree in International Relations from Christ University, Bangalore, and a Bachelor’s degree in Political Science from the University of Delhi.

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By:Sonalika Singh, Consulting Editor, GSDN

Iran’s asymmetric warfare strategy in its confrontation with the United States and Israel represents a sophisticated, deeply embedded doctrine that reflects both structural necessity and strategic innovation. Confronted with adversaries that possess overwhelming superiority in conventional military capabilities ranging from advanced air power and missile defense systems to global logistical reach Iran has deliberately chosen a different path to contest power. Rather than attempting to match its opponents symmetrically, which would almost certainly lead to rapid military defeat, Tehran has developed a multidimensional approach designed to offset its weaknesses, exploit adversary vulnerabilities, and prolong conflict in ways that reshape the very definition of victory. In this framework, success is not measured by territorial conquest or decisive battlefield dominance but by survival, resilience, and the ability to impose sustained political, economic, and psychological costs on stronger opponents. This strategic recalibration is rooted in historical experience, particularly lessons drawn from the Iran-Iraq War, the 2003 invasion of Iraq, and the broader pattern of U.S. military engagements in the Middle East, where technologically superior forces often struggled to achieve durable political outcomes. Iran’s leadership has internalized these precedents and translated them into a doctrine that emphasizes endurance over escalation, dispersion over concentration, and indirect confrontation over direct engagement. 

At the core of Iran’s asymmetric warfare is the principle of cost imposition. Tehran recognizes that while it cannot outspend or outgun the United States and Israel, it can force them into a position where the financial, political, and strategic costs of sustained engagement become increasingly burdensome. This is evident in its use of relatively low-cost technologies such as drones and short- to medium-range ballistic missiles, which, when deployed in large numbers or coordinated waves, can overwhelm even advanced defense systems like Patriot and THAAD. The economic asymmetry is striking intercepting a single inexpensive drone may requirethe expenditure of a missile costing several million dollars. Over time, this imbalance creates a form of strategic attrition, draining the resources of the defending side while allowing Iran to maintain pressure with comparatively modest investments. This approach is not intended to deliver a decisive blow but to create a persistent state of insecurity that forces adversaries to remain on high alert, thereby increasing operational fatigue and financial strain. In this sense, Iran’s military actions are inseparable from a broader economic strategy aimed at destabilizing markets, particularly in the energy sector, where even limited disruptions can have global repercussions. 

A central pillar of this strategy is the deliberate targeting of economic chokepoints, most notably the Strait of Hormuz, through which a significant portion of the world’s oil and gas supply transits. By threatening or temporarily disrupting this vital maritime corridor, Iran effectively internationalizes the conflict, ensuring that its consequences are felt far beyond the immediate battlefield. The resulting volatility in global energy prices not only pressures Western economies but also places strain on U.S. allies in Europe and Asia, many of whom depend heavily on Gulf energy supplies. This tactic transforms a regional conflict into a global economic concern, thereby increasing diplomatic pressure on Washington to seek de-escalation. In addition to maritime disruption, Iran has demonstrated a willingness to target critical infrastructure such as oil facilities, desalination plants, and financial institutions, further amplifying the economic impact of its actions. These operations blur the line between military and civilian domains, operating within what analysts often describe as the “grey zone” of conflict, where attribution is complex, and responses are constrained by legal and ethical considerations. 

Equally important is Iran’s extensive network of regional proxies, which serves as both a force multiplier and a mechanism for strategic deniability. Groups operating in Lebanon, Iraq, Syria, Gaza, and Yemen provide Tehran with the ability to project power across multiple fronts without deploying its own conventional forces in large numbers. This decentralized model complicates the strategic calculus of the United States and Israel, as it creates a web of interconnected conflicts that are difficult to contain. Attacks can be launched from multiple directions, stretching defensive systems, and forcing adversaries to allocate resources across a wide geographical area. At the same time, the use of proxies allows Iran to calibrate its level of involvement, escalating or de-escalating indirectly while maintaining plausible deniability. This flexibility is a key advantage in asymmetric warfare, where ambiguity itself becomes a strategic tool. However, reliance on proxies also introduces challenges, including issues of coordination, control, and the risk of unintended escalation, particularly when these groups pursue their own local agendas. 

Another critical dimension of Iran’s approach is its emphasis on survivability through decentralization and hardening of military assets. Anticipating the likelihood of decapitation strikes and intensive aerial bombardment, Iran has invested heavily in underground facilities, dispersed command structures, and redundant communication networks. This “mosaic defense” system ensures that even if key leadership figures or installations are destroyed, the overall system remains functional. The ability to absorb initial shocks and continue operations is essential to Iran’s strategy, as it denies adversaries the quick victory that their superior firepower might otherwise deliver. In this context, resilience becomes a form of resistance, and the continuation of operations itself sends a powerful political message. The survival of command-and-control systems, even under sustained attack, reinforces the perception that Iran cannot be easily subdued, thereby strengthening its deterrent posture. 

Iran’s asymmetric warfare also extends into the cyber domain, where it has developed capabilities to target financial institutions, critical infrastructure, and information systems. Cyber operations offer a relatively low-costmeans of inflicting disruption while maintaining a high degree of deniability. Attacks on banking networks, for instance, can undermine confidence in financial systems, trigger capital flights, and create ripple effects across global markets. When combined with physical attacks on energy infrastructure and shipping lanes, these cyber operations contribute to a comprehensive strategy of economic coercion. The objective is not merely to damage specific targets but to create an environment of uncertainty that complicates decision-making for policymakers and investors alike. In this sense, Iran’s asymmetric warfare operates across multiple domainsmilitary, economic, cyber, and psychological each reinforcing the others in a coordinated manner. 

The psychological dimension of this strategy is particularly significant. By demonstrating an ability to continue fighting in the face of overwhelming force, Iran seeks to influence the domestic political landscapes of its adversaries. In democratic societies, prolonged conflicts with rising costs and unclear outcomes can erode public support and generate political pressure for withdrawal or negotiation. This dynamic was evident in past conflicts such as Vietnam and Iraq, where superior military power did not translate into decisive political victory. Iran’s leadership appears to be relying on a similar erosion of will, expecting that the longer the conflict persists, the more likely it is that divisions will emerge within the United States and Israel regarding the continuation of military operations. Statements from opposition politicians, debates over war expenditures, and concerns about economic impacts all serve to reinforce this aspect of Iran’s strategy. In effect, the battlefield extends beyond physical territory into the realm of public opinion and political discourse. 

However, while Iran’s asymmetric approach has demonstrated a degree of effectiveness, it is not without limitations and risks. The very tactics that enable it to challenge stronger adversaries also expose it to significant vulnerabilities. Precision strikes by the United States and Israel have successfully targeted key military and leadership assets, indicating that Iran’s defensive measures are not impenetrable. Economic sanctions continue to constrain its ability to sustain prolonged conflict, limiting access to resources and technology. Furthermore, the reliance on proxies can lead to fragmentation and loss of control, as different groups may pursue divergent objectives. This can increase the risk of escalation beyond Tehran’s intent, potentially drawing it into a broader conflict that it seeks to avoid. Additionally, the targeting of civilian infrastructure and global economic systems may alienate potential allies and international opinion, undermining Iran’s diplomatic standing. 

Despite these challenges, Iran’s asymmetric warfare has succeeded in reshaping the strategic landscape of the conflict. It has prevented a rapid and decisive victory by the United States and Israel, transformed the war into a protracted and costly engagement, and expanded its impact beyond the immediate theater of operations. By leveraging a combination of military innovation, economic pressure, and political strategy, Tehran has demonstrated that even a conventionally weaker state can exert significant influence in a confrontation with more powerful adversaries. The outcome of such conflicts is inherently uncertain, as it depends not only on military capabilities but also on factors such as political will, economic resilience, and international dynamics. In this context, Iran’s strategy can be seen as a calculated gamble one that seeks to turn its weaknesses into strengths and to redefine the terms of engagement in a way that favors endurance over force. 

Ultimately, the question of whether Iran’s asymmetric warfare constitutes a “strong response” depends on how success is defined. If the standard is the ability to survive, impose costs, and avoid defeat, then the strategy has achieved notable results. If, however, success is measured in terms of achieving clear political or territorial gains, the picture is more ambiguous. What is clear, however, is that Iran has fundamentally altered the nature of the conflict, challenging conventional assumptions about power and warfare in the modern era. Its approach underscores a broader transformation in global security dynamics, where non-traditional methods and hybrid strategies play an increasingly central role. As the conflict continues to evolve, the interplay between asymmetric tactics and conventional military power will remain a defining feature, shaping not only the immediate outcome but also the future of warfare in the region and beyond. 

About the Author

Sonalika Singh began her journey as an UPSC aspirant and has since transitioned into a full-time professional working with various organizations, including NCERT, in the governance and policy sector. She holds a master’s degree in political science and, over the years, has developed a strong interest in international relations, security studies, and geopolitics. Alongside this, she has cultivated a deep passion for research, analysis, and writing. Her work reflects a sustained commitment to rigorous inquiry and making meaningful contributions to the field of public affairs. 

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By: Khushbu Ahlawat, Consulting Editor, GSDN

Introduction

The relationship between natural resources and global power has been a defining feature of international politics for over a century. During the twentieth century, oil emerged as the most critical strategic commodity, shaping the trajectory of global conflicts, alliances, and economic systems. From the oil crises of the 1970s to the geopolitical centrality of the Middle East, control over hydrocarbons determined the rise and fall of great powers. Scholars such as Daniel Yergin have extensively demonstrated how oil became the “lifeblood” of industrial economies and a central instrument of geopolitical strategy. However, the twenty-first century is witnessing a significant transformation as the global economy shifts toward decarbonization, digitalization, and technological innovation, thereby redefining the material foundations of power.

In this evolving landscape, critical minerals—including lithium, cobalt, nickel, and rare earth elements—have emerged as indispensable to the functioning of modern economies. These minerals are essential for renewable energy technologies, electric vehicles, battery storage systems, and advanced electronics, making them central to both economic growth and national security. The transition from fossil fuels to clean energy has not reduced resource dependency; rather, it has transformed it. As Vaclav Smil argues, energy transitions are inherently material-intensive, requiring vast quantities of new resources to sustain technological change. Consequently, the global demand for critical minerals has surged dramatically, creating new patterns of interdependence, competition, and vulnerability across nations.

This article examines how the shift from oil to critical minerals is reshaping global power structures in the twenty-first century. It analyzes the geopolitical implications of resource concentration, the emergence of geoeconomic competition, and the role of supply chains in determining strategic influence. Drawing on theoretical perspectives from realism, dependency theory, and geoeconomics, the article argues that critical minerals are not merely economic assets but instruments of power that are redefining international relations. By exploring recent global developments and policy responses, the study seeks to highlight the opportunities and challenges associated with this transition, particularly for emerging economies navigating an increasingly complex and competitive global order.

The Material Shift: From Hydrocarbons to Critical Minerals

The foundations of global power are undergoing a profound structural transformation as the world transitions from fossil fuel dependency to a mineral-intensive clean energy economy. Historically, oil functioned as the cornerstone of geopolitical influence, shaping alliances, conflicts, and economic systems across the twentieth century. However, the rapid expansion of renewable energy technologies, electric vehicles (EVs), and digital infrastructure has repositioned critical minerals—such as lithium, cobalt, nickel, and rare earth elements—as the new drivers of global power. According to the International Energy Agency (IEA), lithium demand alone grew by nearly 30% in 2024, while demand for cobalt, nickel, and rare earth elements increased steadily by 6–8% annually due to the accelerating adoption of clean energy technologies. This transition reflects what Hans Morgenthau conceptualized as the centrality of material capabilities in determining state power, although in the contemporary era these capabilities are increasingly defined by access to strategic minerals rather than hydrocarbons.

The scale and intensity of this transformation are further highlighted by projections that global demand for critical minerals could triple by 2030 and quadruple by 2040, driven by rapid electrification and the expansion of green energy systems. As Vaclav Smil argues, energy transitions are inherently material-intensive, requiring vast quantities of new resources to sustain technological change. This is evident in the electric vehicle sector, where batteries alone are expected to surpass 3 terawatt-hours in demand by 2030, significantly increasing reliance on mineral inputs compared to traditional internal combustion technologies. Consequently, the ongoing energy transition is not reducing global resource dependence but fundamentally transforming its nature—from fossil fuels to critical minerals—thereby redefining geopolitical dynamics and reshaping the material basis of global power.

Geopolitical Concentration and Structural Inequalities in Critical Mineral Supply Chains

A defining feature of critical minerals geopolitics is the extreme concentration of both resource endowments and processing capabilities in a limited number of countries. The Democratic Republic of the Congo accounts for approximately 70–76% of global cobalt production, while Indonesia dominates nickel output, and Australia and Chile lead lithium extraction. Even more consequential is the concentration of refining capacity, where China processes nearly 70% of the world’s critical minerals and leads in refining most strategic resources. This dual concentration of extraction and processing creates structural asymmetries in global supply chains, where control is not only about resource availability but also about technological and industrial capacity. As Raul Prebisch’s core–periphery framework suggests, resource-rich regions often remain confined to the role of raw material exporters, while advanced economies capture higher value through processing and manufacturing. This is evident in Africa, which holds a significant share of global mineral reserves yet captures only a limited portion of the value due to constraints in industrial infrastructure and technological capabilities.

The concept of asymmetric interdependence, developed by Albert Hirschman, further explains how such concentration translates into geopolitical leverage. States that control critical nodes in supply chains are able to exert disproportionate influence over more dependent economies, transforming economic relationships into instruments of power. This dynamic was clearly illustrated in 2025 when the Democratic Republic of the Congo imposed a temporary export ban on cobalt, triggering sharp price increases and exposing the vulnerability of global supply chains to localized disruptions. Such developments highlight that the geography of critical minerals is not merely a function of natural distribution but a structural determinant of global power relations. It reinforces hierarchies within the international system, deepens dependency patterns, and shapes the evolving political economy of the energy transition.

Geoeconomic Rivalry and the New Politics of Supply Chains

The growing strategic importance of critical minerals has intensified geoeconomic competition, particularly between United States and China. China’s dominance in refining and processing has positioned it at the core of global supply chains, enabling it to exercise significant influence over downstream industries such as electric vehicles, renewable energy, and advanced manufacturing. In response, the United States and its allies have accelerated efforts to diversify supply sources through domestic mining initiatives, critical mineral agreements, and partnerships with resource-rich countries in Africa, Latin America, and the Indo-Pacific. This evolving competition reflects a broader shift from traditional military-centric power to economic statecraft, where control over supply chains and industrial capacity becomes a key determinant of strategic influence. Edward Luttwak’s concept of geoeconomics provides a compelling framework for understanding this transition, as states increasingly deploy economic tools—such as export controls, subsidies, and investment screening—to achieve geopolitical objectives. Recent policy actions, including China’s restrictions on gallium and graphite exports and Western initiatives to secure alternative supply chains, illustrate how economic interdependence is being strategically recalibrated.

The dynamics of this competition are further illuminated by the theory of “weaponized interdependence,” developed by Henry Farrell and Abraham Newman, which explains how states leverage their control over critical nodes in global networks to exert coercive power. In the context of critical minerals, dominance over refining and processing capabilities enables certain states to influence market access and supply conditions, effectively transforming economic networks into instruments of geopolitical leverage. This has contributed to what can be described as an emerging “supply chain conflict,” where access to essential minerals is increasingly securitized. Market developments reinforce this trend, as evidenced by sharp increases in cobalt prices following supply restrictions and projections of potential supply deficits in the early 2030s due to surging demand. These patterns underscore the inherent fragility and volatility of global mineral supply chains, highlighting the urgent need for strategic planning, diversification, and resilience-building in an era where economic interdependence is both a source of cooperation and a site of geopolitical contestation.

Resource Nationalism, Technological Innovation, and the Future Trajectory of Global Power

The growing strategic importance of critical minerals has accelerated the resurgence of resource nationalism, as states increasingly seek to assert sovereign control over mineral resources and maximize domestic economic gains. Since 2018, the rapid expansion of export restrictions and regulatory interventions reflects a shift in perception—from minerals as commodities to strategic assets central to national security. This trend is clearly visible in recent developments, such as the 2025 decision by the Democratic Republic of the Congo to suspend and later restrict cobalt exports, which led to a global supply crunch and a dramatic 160% surge in cobalt prices. At the same time, China has expanded export controls on key minerals such as gallium, graphite, and germanium, reinforcing its strategic leverage in global supply chains and highlighting the increasing use of economic tools for geopolitical purposes. These developments underscore the relevance of Terry Lynn Karl’s resource curse thesis, as resource-rich regions continue to face governance challenges and socio-environmental risks. Contemporary reports of child labor and unsafe mining practices in cobalt extraction further illustrate the ethical dilemmas embedded within the energy transition, raising critical questions about whether the shift to green energy can be both sustainable and equitable.

Simultaneously, technological innovation is emerging as a key mechanism to mitigate supply risks and reduce geopolitical dependencies. Joseph Schumpeter’s theory of innovation highlights how technological change can disrupt existing structures, a trend evident in the growing adoption of alternative battery technologies such as lithium iron phosphate (LFP), which reduce reliance on scarce minerals like cobalt and nickel. In parallel, strategic collaborations are reshaping supply chains; for instance, the 2026 United States–Japan critical minerals partnership aims to diversify sourcing, enhance recycling, and counter supply concentration risks. Emerging economies such as India are also responding through policy interventions, including reforms to boost domestic production of minerals like graphite and zirconium to reduce dependence on external suppliers. However, as Samir Amin argues, the persistence of global structural inequalities means that developing countries risk remaining confined to extractive roles unless they invest in value addition and technological capabilities. Ultimately, the transition from oil to critical minerals represents not only a shift in resource dependence but a reconfiguration of global power itself—one characterized by heightened competition, technological adaptation, and the strategic politicization of natural resources.

Conclusion

The transition from oil to critical minerals marks a defining transformation in the material foundations of global power, signaling the emergence of a new geopolitical and geoeconomic order. Unlike the relatively centralized and institutionally structured oil economy of the twentieth century, the contemporary critical minerals landscape is characterized by fragmentation, asymmetry, and heightened competition. The concentration of extraction in regions such as the Democratic Republic of the Congo and processing dominance of China has created new forms of dependency that are reshaping global hierarchies. At the same time, major powers such as the United States are actively seeking to diversify supply chains and reduce strategic vulnerabilities, illustrating how access to critical minerals has become central to national security and economic resilience. These dynamics underscore that the energy transition is not merely an environmental or technological shift but a deeply political process that is redefining the contours of international relations.

At the heart of this transformation lies a fundamental paradox. While critical minerals are essential for achieving global climate goals and enabling a sustainable energy future, their extraction and distribution are embedded in unequal structures that risk reproducing historical patterns of exploitation and dependency. The persistence of resource nationalism, the volatility of supply chains, and the ethical challenges associated with mining practices highlight the complexities of this transition. Theoretical insights from scholars such as Hans Morgenthau, Raul Prebisch, and Samir Amin collectively reveal that control over material resources continues to shape power, inequality, and global order, even as the nature of those resources evolves. Simultaneously, innovation and strategic policy interventions offer pathways to mitigate risks, suggesting that the future of global power will be determined not only by resource endowments but also by technological capabilities and institutional choices.

Ultimately, the geopolitics of critical minerals compels a rethinking of how power is conceptualized and exercised in the twenty-first century. The shift from oil to lithium is not simply a substitution of one resource for another; it represents a broader reconfiguration of economic systems, political strategies, and global interdependencies. As nations compete to secure access, build resilient supply chains, and capture value within this emerging economy, the stakes extend far beyond resource control to encompass questions of equity, sustainability, and global governance. The future international order will increasingly be shaped by those who can effectively navigate this complex terrain—balancing competition with cooperation, and growth with justice. In this unfolding era, critical minerals are not just inputs for technology; they are the new currency of power, defining who leads, who follows, and how the global order itself is reimagined.

About the Author

Khushbu Ahlawat is a research analyst with a strong academic background in International Relations and Political Science. She has undertaken research projects at Jawaharlal Nehru University, contributing to analytical work on international and regional security issues. Alongside her research experience, she has professional exposure to Human Resources, with involvement in talent acquisition and organizational operations. She holds a Master’s degree in International Relations from Christ University, Bangalore, and a Bachelor’s degree in Political Science from the University of Delhi.

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By:Sonalika Singh, Consulting Editor, GSDN

China’s Fifteenth Five-Year Plan (2026–2030) represents a pivotal moment in the country’s long-term development trajectory, reflecting both continuity with past strategies and a recalibration in response to evolving domestic and global realities. As one of the most important policy instruments in China’s governance framework, the Five-Year Plan serves not merely as an economic guideline but as a comprehensive blueprint aligning political priorities, industrial strategy, social development, and national security objectives. The latest plan emerges at a time marked by intensifying geopolitical competition, structural economic adjustments, and rapid technological transformation. Consequently, it provides critical insight into how China intends to navigate uncertainty while consolidating its position as a global economic and technological power. 

At its core, the Fifteenth Five-Year Plan reinforces the centrality of technological self-reliance and industrial upgrading as the twin engines of future growth. Building on the foundations laid during the Fourteenth Five-Year Plan, the new framework places even greater emphasis on the transition from innovation development to innovation application. This shift reflects a maturing innovation ecosystem in which the challenge is no longer solely about achieving breakthroughs but about scaling those breakthroughs into commercially viable and globally competitive industries. In this regard, the plan underscores the importance of embedding advanced technologies, particularly artificial intelligence, robotics, quantum computing, and biotechnology across the entire industrial value chain. Rather than treating these technologies as isolated sectors, the plan integrates them into a broader strategy of economic transformation, aiming to enhance productivity, reduce dependence on foreign inputs, and strengthen resilience against external shocks. 

Industrial modernization occupies a central position in the plan, signaling a strategic pivot toward high-quality manufacturing and value-chain upgrading. Unlike earlier development phases, where China relied heavily on labor-intensive production and export-driven growth, the current approach seeks to reposition the country as a leader in advanced manufacturing. This includes not only the development of emerging industries such as new energy vehicles, biomanufacturing, and aerospace, but also the upgrading of traditional sectors like steel, petrochemicals, and textiles. The emphasis on “new quality productive forces” reflects an ambition to combine digitalization, automation, and green technologies to create a more efficient and sustainable industrial system. Importantly, this strategy does not imply abandoning lower-end manufacturing; instead, China aims to maintaincompetitiveness across the entire spectrum of production while simultaneously moving up the value chain. 

A defining feature of the Fifteenth Five-Year Plan is its strong focus on technological self-sufficiency as a matter of national security. This orientation is shaped by the increasingly restrictive global technology environment, particularly export controls and supply chain disruptions that have exposed vulnerabilities in critical sectors such as semiconductors and advanced materials. In response, the plan outlines a comprehensive approach to reducing reliance on foreign technologies, including increased investment in research and development, the expansion of national laboratories, and the promotion of domestic innovation ecosystems. The target of maintaining annual growth in R&D expenditure above 7 percent, alongside efforts to increase high-value patents and the contribution of digital industries to GDP, highlights the scale of this commitment. At the same time, the plan emphasizes the role of enterprises as key drivers of innovation, supported by policies such as tax incentives, venture capital development, and enhanced intellectual property protection. 

While the technological and industrial agenda dominates the plan, there is also a clear recognition of the need to rebalance China’s growth model by strengthening domestic demand. For decades, China’s economy has been characterized by a heavy reliance on investment and exports, with household consumption playing a relatively limited role. The Fifteenth Five-Year Plan seeks to address this imbalance by promoting income growth, improving employment opportunities, and expanding the availability of high-quality goods and services. Measures to boost consumption include fiscal initiatives such as consumer subsidies and trade-in programs, as well as structural reforms aimed at enhancing social security and stabilizing household expectations. However, the plan’s approach to consumption remains closely linked to supply-side improvements, reflecting a belief that expanding high-quality supply will, in turn, stimulate demand. This approach suggests a gradual and controlled rebalancing rather than a dramatic shift toward consumption-led growth. 

The plan also places significant emphasis on the development of the service sector, particularly in areas such as healthcare, education, tourism, and cultural industries. This reflects both changing consumption patterns and the need to create new sources of employment in an economy facing demographic challenges, including an aging population and a shrinking workforce. The concept of the “silver economy,” which focuses on products and services for elderly consumers, is particularly prominent, indicating a strategic effort to turn demographic pressures into economic opportunities. At the same time, the expansion of digital services and the integration of online and offline consumption channels are expected to play a key role in shaping future demand. 

Another important dimension of the Fifteenth Five-Year Plan is its approach to foreign investment and economic openness. Despite the strong emphasis on self-reliance, the plan does not signal a retreat from global engagement. Instead, it advocates a more selective and strategic form of opening, aimed at attracting high-quality foreign investment in sectors aligned with China’s development priorities. This includes advanced manufacturing, high technology, modern services, and green industries. The plan also outlines measures to improve the business environment for foreign companies, such as reducing the negative list for market access, enhancing regulatory transparency, and facilitating cross-border data flows. However, this openness is carefully balanced with efforts to safeguard economic security and maintain control over critical sectors, reflecting a nuanced approach to globalization in an era of increasing geopolitical tension. 

Financial reform constitutes another key pillar of the plan, with a focus on supporting real economic activity while maintaining systemic stability. China’s leadership appears committed to avoiding the risks associated with excessive financial liberalization, opting instead for a model of “controlled dynamism” in which financial innovation is encouraged but closely regulated. The development of digital finance, including the continued rollout of the digital yuan, is a central component of this strategy, offering new tools for enhancing efficiency and oversight. At the same time, efforts to channel capital toward strategic industries, particularly through venture capital and government-guided funds, highlight the role of finance as an instrument of industrial policy. 

The real estate sector, which has been a major source of economic volatility in recent years, is addressed in the plan through a framework of stabilization and restructuring. Rather than relying on property as a primary driver of growth, the plan seeks to reposition it as a more sustainable and balanced component of the economy. This includes measures to support affordable housing, promote urban renewal, and address the financial risks associated with overleveraged developers. By integrating real estate into a broader strategy of urban development and social welfare, the plan aims to mitigate systemic risks while maintaining its contribution to economic stability. 

In addition to economic and industrial priorities, the Fifteenth Five-Year Plan reflects a broader shift toward integrated national development, where economic policy is closely linked with social, environmental, and security objectives. The emphasis on green and low-carbon development, for instance, highlights China’s commitment to addressing climate change while simultaneously advancing its leadership in renewable energy and related technologies. Targets for reducing carbon intensity, increasing the share of non-fossil energy, and improving environmental quality underscore the importance of sustainability as a core component of future growth. 

At the governance level, the plan introduces measures aimed at improving policy coordination and reducing inefficiencies associated with local competition and duplication. The concept of addressing “involution,” or excessive and unproductive competition among firms and regions, reflects an awareness of the need for more efficient resource allocation. Initiatives such as building a unified national market, reforming fiscal and tax systems, and aligning local incentives with national priorities are intended to enhance the overall effectiveness of China’s development strategy. 

The international implications of the Fifteenth Five-Year Plan are significant. By prioritizing technological self-reliance, industrial upgrading, and domestic demand, China is positioning itself to operate more independently in a fragmented global economy. At the same time, its continued engagement with global markets, particularly through targeted opening and participation in international standards-setting, suggests a strategy of shaping rather than withdrawing from globalization. This dual approach combining internal consolidation with selective external engagement has the potential to reshape global trade patterns, investment flows, and technological ecosystems. 

Therefore, China’s Fifteenth Five-Year Plan represents a comprehensive and forward-looking strategy designed to navigate a complex and uncertain global environment. It reflects clear recognition that the country’s future growth will depend not only on the scale of its economy but also on the quality and resilience of its development model. By emphasizing technological innovation, industrial modernization, and domestic demand, while maintaining a measured approach to openness and financial reform, the plan seeks to balance competing priorities and manage inherent trade-offs. Ultimately, its success will depend on the effectiveness of implementation and the ability to adapt to evolving domestic and international conditions. Nevertheless, the plan provides a clear indication of China’s strategic direction and its ambition to secure a leading position in the global economy over the coming decades. 

About the Author

Sonalika Singh began her journey as an UPSC aspirant and has since transitioned into a full-time professional working with various organizations, including NCERT, in the governance and policy sector. She holds a master’s degree in political science and, over the years, has developed a strong interest in international relations, security studies, and geopolitics. Alongside this, she has cultivated a deep passion for research, analysis, and writing. Her work reflects a sustained commitment to rigorous inquiry and making meaningful contributions to the field of public affairs.

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