“International Relations Are
All About Economic Interests
and Local Political Gains”
A complete UPSC-style model essay testing the Realist claim that all IR reduces to economics and domestic politics — against the evidence of Russia-Ukraine (2022), India’s Ukraine vote, India-Middle East economic corridor (2023), and India’s G20 presidency. The essay argues: economic interests and political gains are necessary but not sufficient explanations — values, norms, identity, and prestige also shape the international system, and India’s finest diplomatic moments prove it.
Kautilya’s Realism — And Its Limits
Two thousand three hundred years ago, Kautilya wrote in the Arthashastra: “The enemy of my enemy is my friend.” It is perhaps the most concise statement of Realist international relations theory ever produced — and it was written not in Vienna or Washington but in Pataliputra, the capital of the Mauryan Empire. Kautilya’s Mandala theory of concentric circles of states as permanent rivals and potential allies, animated entirely by self-interest, anticipated the core argument of the essay’s title by more than two millennia: that international relations are fundamentally about national interest, primarily expressed through economic advantage and domestic political survival. The question the essay must answer is not whether this claim is partially true — it clearly is — but whether it is completely true. Whether economic interests and local political gains are the whole story of why nations behave as they do.
The evidence of the past three years suggests that the complete story is more complex. In February 2022, Russia invaded Ukraine — a military aggression that, by the narrow logic of economic interest, should have been deterred by the certain costs of Western sanctions. Russia calculated — incorrectly, as it turned out — that economic interdependence with Europe would prevent a decisive Western response. The West calculated — also incorrectly — that economic pain would cause Russia to withdraw. Neither calculation was made purely on the basis of economic interest: Vladimir Putin’s decision was shaped by ideology, historical identity, and strategic prestige as much as by material calculation. The response of Western democracies was shaped by norms of sovereignty, rule of law, and democratic solidarity that no simple economic model predicted. When states act in ways that are economically costly and politically risky, the explanation must reach beyond economics and domestic politics.
Kautilya in the opening — not Morgenthau or Carr — establishes immediately that IR theory has an Indian root older than Western political science. The Mandala theory is real and specific. Then the Russia-Ukraine example immediately tests the thesis: if economics drives everything, Russia’s invasion — which has cost Russia enormously — is hard to explain. Starting with an Indian thinker and testing the essay’s central claim against the most recent major geopolitical event signals a candidate of genuine intellectual range.
Three Schools of IR Theory — What Each Gets Right and Wrong
The essay’s title represents the position of Realism — the oldest and most influential theory of international relations, associated with Hans Morgenthau, Kenneth Waltz, and, in the Indian tradition, Kautilya himself. Realism holds that states are the primary actors in world politics, that they operate in an anarchic international system without a global sovereign, and that their primary motivation is the pursuit and preservation of power in service of national interest. Economic interests and domestic political gains are, in Realist analysis, the primary expressions of national interest. Realism’s explanatory power is considerable: it explains the US-China trade war, energy-driven Middle East policy, and the strategic behaviour of most nations in most situations most of the time.
Liberalism — associated with Immanuel Kant’s “Perpetual Peace,” Woodrow Wilson’s Fourteen Points, and the post-WWII institutional order — argues that states are not the only actors, that democracies rarely fight each other, that international institutions and trade create incentives for cooperation that override narrow self-interest, and that shared values and norms genuinely shape state behaviour. Liberalism’s explanatory power is visible in the European Union, in the persistence of international law even without a global enforcer, and in the fact that no two liberal democracies have gone to war with each other in the post-WWII period.
Constructivism — a more recent school associated with Alexander Wendt — argues that states’ interests are not fixed by material conditions but are socially constructed through the ideas, identities, and norms that states hold about themselves and each other. “Anarchy is what states make of it,” Wendt famously wrote: the international system is not inherently competitive or cooperative — it is shaped by the meanings that states assign to each other’s actions. This explains why identical military capabilities produce different outcomes in different contexts: the United States and the United Kingdom both possess nuclear weapons, but do not regard each other as threats — not because of economic interest, but because of shared identity and norms. No single theory explains all of international relations. The most honest position is that all three capture something real.
— India’s own foreign policy is the most complex available case study — Where the Thesis Holds — Recent EvidenceWhen Economics and Politics Do Drive International Relations
At the G20 summit in New Delhi in September 2023, India, the United States, Saudi Arabia, the UAE, France, Germany, Italy, and the European Union announced the India-Middle East Economic Corridor (IMEC) — a proposed multimodal connectivity route linking India through the UAE, Saudi Arabia, Jordan, and Israel to Europe by ship and rail, bypassing China’s Belt and Road Initiative.
The IMEC is a textbook illustration of economic interests driving international relations. Its economic logic: reducing trade transit time between India and Europe by 40%, creating logistics infrastructure that generates employment across participating countries, and providing an alternative supply chain architecture to China’s BRI for developing nations. Its political logic: drawing Saudi Arabia and the UAE into an infrastructure partnership with Israel — an implicit normalisation of Abraham Accords-era relationships — while simultaneously offering developing nations a non-Chinese alternative for connectivity investment. Every participating nation signed for reasons that combined economic interest with strategic positioning. The IMEC is pure Kautilya: each partner is the friend of the other’s rival’s rival.
In August 2022, the United States enacted the CHIPS and Science Act — a $280 billion investment in domestic semiconductor manufacturing, research, and workforce development. The Act’s most significant provision: any company receiving US subsidies is prohibited from building advanced chip factories in China for 10 years. Taiwan Semiconductor Manufacturing Company, Samsung, and Intel all received CHIPS Act funding — and all accepted the China restriction.
The CHIPS Act is economics-as-foreign-policy in its most explicit form. The US calculation: semiconductors are the oil of the 21st century; a nation that cannot manufacture advanced chips cannot build advanced weapons, cannot operate advanced AI systems, and cannot compete in the industries of the future. Preventing China from accessing advanced chip technology is not primarily a trade policy — it is a strategic containment policy expressed through economic instruments. India’s India Semiconductor Mission is a direct response to this geopolitical reality — recognising that supply chain sovereignty in critical technologies is now a national security requirement, not merely an industrial policy preference.
When the UN General Assembly voted in March 2022 to demand Russia’s withdrawal from Ukraine, India abstained — along with China and 32 other nations. The abstention was immediately analysed through two competing lenses. The Realist lens: India imports approximately 60% of its defence equipment from Russia, depends on Russian oil at discounted prices, and cannot afford to jeopardise the strategic partnership that gives it leverage against China. India’s economic and security interests demanded non-alignment on the Ukraine question. The normative lens: India had been a consistent champion of the UN Charter’s sovereignty norms — the same norms that Russia’s invasion violated — and abstention was seen by critics as moral inconsistency.
The truth is that both analyses are partially correct. India’s abstention reflected genuine economic and strategic interest (Russian oil, Russian defence systems) and genuine principled ambiguity (India has its own territorial disputes and is not eager to establish the precedent that external powers can demand other states’ internal territorial arrangements). Neither explanation alone is complete. India’s subsequent engagement — providing humanitarian assistance to Ukraine, urging both sides to cease fire, hosting the Voice of the Global South Summit (2023), and insisting at the G20 that “this is not an era of war” — suggests a foreign policy that combines strategic interest, normative commitment, and an aspiration for geopolitical positioning that cannot be reduced to any single theory.
When States Act Beyond Economic Interest and Domestic Politics
1. India’s Vaccine Maitri (2021) — Generosity at Economic Cost. In the first half of 2021, India supplied over 66 million COVID-19 vaccine doses to 95 countries — at a time when India’s own vaccination campaign was ramping up and a second wave was imminent. The Vaccine Maitri initiative imposed a genuine economic cost (India exported vaccines it could have sold domestically at market prices) and a political risk (when the second wave hit, the government faced criticism for exporting vaccines while Indians waited). The decision was not driven by economic interest. It was driven by India’s vision of itself as a responsible global power, a “pharmacy of the world,” and a leader of the Global South. Constructivist IR theory — states act on the basis of the identities they hold about themselves — explains Vaccine Maitri better than Realism or economic interest theory.
2. Panchsheel and Non-Alignment — Values as Foreign Policy Architecture. When India, under Prime Minister Nehru, articulated the Five Principles of Peaceful Coexistence (Panchsheel, 1954) and championed the Non-Aligned Movement (1961), it was making a foreign policy choice that was not economically optimal. Non-alignment denied India the security guarantees and economic assistance that either Cold War bloc could have provided. It was chosen because it reflected India’s self-conception as a post-colonial nation that refused to trade one form of external dependence for another — and because Nehru genuinely believed that a world of non-aligned, sovereign nations was morally preferable to a world permanently divided between two nuclear-armed blocs. This is values-based foreign policy at its clearest.
3. The International Criminal Court and the Principle of Individual Accountability. The creation of the International Criminal Court (1998, fully operational 2002) — and the indictment in 2023 of Russian President Vladimir Putin for war crimes related to the deportation of Ukrainian children — represents an international legal system that explicitly overrides the immunity of sitting heads of state for crimes against humanity. No economic interest or domestic political calculation explains why states submitted their leaders to this accountability mechanism. The ICC is the clearest modern expression of Grotius’s 17th-century claim that there exists a body of international law binding on states that transcends their individual interests — a claim that the essay’s title explicitly denies.
4. Climate Change Commitments — Against Short-Term Economic Interest. India’s commitment to achieving net-zero emissions by 2070 and generating 50% of its electricity from non-fossil-fuel sources by 2030 (as submitted in its updated Nationally Determined Contribution to the Paris Agreement) imposes genuine short-term economic costs on a country where 660 million people still lack reliable electricity access. India’s leadership on climate finance for developing nations — advocating for the Green Climate Fund, for technology transfer, and for the recognition of developing nations’ right to developmental space — is driven by a combination of genuine environmental concern, Global South solidarity, and the diplomatic aspiration to lead the international climate conversation. No simple economic interest or domestic political calculation fully explains India’s climate commitments.
Vasudhaiva Kutumbakam — When India Tried to Move Beyond Interests
India’s G20 presidency in 2022-23 — culminating in the New Delhi Summit of 9–10 September 2023 — was a masterclass in using a multilateral diplomatic platform simultaneously for economic interest, political gain, and genuine normative leadership.
Economic interest: India used the G20 presidency to position itself as the preferred destination for supply chain diversification from China — facilitating announcements of semiconductor investment, green hydrogen partnerships, and digital infrastructure collaboration. The IMEC was announced on the G20 sidelines. Political gain: The inclusion of the African Union as a permanent G20 member — India’s signature achievement of the presidency — enhanced India’s standing as the voice of the Global South and strengthened its domestic political narrative as a rising global power. Normative leadership: The summit declaration’s language on Ukraine — cautiously condemning territorial acquisition by force without explicitly naming Russia, while preserving consensus — reflected a genuine diplomatic achievement in bridging the divide between Western and non-Western G20 members.
The theme of India’s G20 presidency — Vasudhaiva Kutumbakam (One Earth, One Family, One Future) — drawn from the Maha Upanishad and inscribed at the entrance of India’s Parliament — was not merely decorative. It was a public declaration that India’s foreign policy aspiration, even at a moment of significant self-interest, is grounded in a philosophical tradition that insists on the unity of humanity as a moral claim rather than merely a diplomatic slogan. This is the most important recent evidence against the essay’s thesis: that while economic interests and political gains are always present in international relations, they are not always the whole story — and that the most consequential diplomatic moments are often those when something else is also present.
From Kautilya to Nehru to Jaishankar — India’s Evolving Diplomatic Philosophy
India’s foreign policy tradition is itself a refutation of the essay’s thesis in its most extreme form. It has never been purely economic-interest-driven or purely domestic-politics-driven. It has always been a combination — and the balance between these factors, and the additional factors that neither theory accommodates, has shifted across different periods of India’s independent history.
Kautilya’s realism was corrected by Nehru’s idealism. Nehru’s idealism was corrected by the 1962 reality check. The post-1962 pragmatism was corrected by the economic reform pressures of 1991. The economic-liberalisation-era foreign policy — “economics in command” — has been corrected by the strategic competition of the 2020s, in which technology, supply chains, and security have returned to the centre of the foreign policy agenda alongside economics. External Affairs Minister S. Jaishankar’s formulation in “The India Way” (2020) — that India’s foreign policy must be simultaneously realistic about power, principled about values, and pragmatic about interests — is a recognition that no single theory is adequate: “multi-alignment” rather than non-alignment, because India is large enough and confident enough to pursue multiple relationships simultaneously without choosing between them.
ConclusionBeyond the Market and the Ballot Box — The Fullness of International Relations
The essay’s title captures a partial truth with the rhetorical force of a complete one. Economic interests and domestic political gains are always present in international relations — Kautilya was right about that, and the IMEC, the CHIPS Act, India’s Ukraine abstention, and the Kaveri dispute all confirm it. But they are not the complete explanation — not even for the cases that seem most clearly driven by pure self-interest.
The Russia-Ukraine war cannot be explained without ideology and prestige. The Vaccine Maitri cannot be explained without India’s self-conception as a responsible global power. India’s non-alignment cannot be explained without Nehru’s genuine belief in the moral superiority of sovereign non-dependence. The ICC cannot be explained without the post-WWII normative revolution that placed individual human dignity above state sovereignty in cases of extreme abuse. The Paris Agreement cannot be explained without the genuine fear, shared across partisan and national lines, of planetary-scale environmental catastrophe.
International relations are about economics and domestic politics — but they are also about ideas, identity, norms, prestige, solidarity, fear, and the occasional aspiration to something larger than national self-interest. The statesman who understands only the first two will be effective in ordinary times. The one who understands all of them — who can read the material interest and the moral aspiration simultaneously, and find the diplomatic space where they intersect — is the one who shapes the international order, rather than merely navigating it. That is the kind of diplomacy India is attempting to practice. Whether it succeeds will determine not only India’s place in the world but the kind of world that India’s children will inhabit.
“India does not have a foreign policy. India is a foreign policy.”
— External Affairs Minister S. Jaishankar (adapted) — on a country whose civilisational depth, democratic legitimacy, and strategic position make its international identity inseparable from its domestic valuesWhy This Essay Scores in UPSC — Key Strategies
- Kautilya’s Mandala theory as the opening — IR theory has an Indian root. Most candidates will open with Morgenthau or Thucydides. Opening with Kautilya — 300 BCE, Pataliputra, the Arthashastra — establishes that India has had sophisticated IR theory longer than Western political science has existed. The “enemy of my enemy” formulation immediately validates the essay’s thesis, making the subsequent qualification (“but is it the whole story?”) more powerful because it earns the concession first.
- Russia-Ukraine invasion as immediate test case — economically costly for Russia. If economics drives everything, Russia’s invasion — which has cost Russia enormously in sanctions, brain drain, and military losses — is paradoxical. The opening uses this paradox to establish the essay’s central analytical task: explaining why states sometimes act in ways that are economically costly and politically risky. Current-affairs knowledge deployed as analytical tool.
- IMEC (September 2023) — the most recent and cleanest example of economic interest driving IR. The India-Middle East Economic Corridor announced at the New Delhi G20 summit is simultaneously economically motivated (40% faster trade routes), strategically motivated (BRI alternative), and politically motivated (implicit India-Israel-Arab normalisation). Its announcement at the G20 sidelines makes it perfectly timed for UPSC candidates writing in 2024-25.
- US CHIPS Act (2022) — economics weaponised as strategic containment. $280 billion, 10-year China manufacturing restriction, Taiwan Semiconductor + Samsung + Intel all accepting the restriction. “Semiconductors are the oil of the 21st century.” India Semiconductor Mission as India’s recognition that chip sovereignty is a national security requirement. This connects the IR essay to technology policy and demonstrates the cross-domain analysis UPSC rewards.
- Vaccine Maitri as the clearest counterexample to the economic interest thesis. 66 million doses to 95 countries at economic cost and political risk — and the second wave came anyway. Constructivist IR theory explains this better than Realism: India acted on its self-conception as “pharmacy of the world” and leader of the Global South. Using the correct IR theory for each example — not just Realism for everything — shows theoretical sophistication.
- Jaishankar’s “The India Way” (2020) and multi-alignment — India’s synthesis of IR theories. Naming the EAM’s book, published in 2020, and the concept of multi-alignment as India’s post-non-alignment foreign policy framework shows the examiner that the candidate has read beyond the standard UPSC IR material. Jaishankar is both the theoretical source and the active practitioner — the combination is uniquely powerful for this essay.
