The contradictory US policies towards India and Russia have created a major dilemma for international investors, highlighting the growing importance of navigating political risk in a world where trade rules can change overnight.
An investor in India’s export sector now faces a sudden 50% barrier to their primary market, a risk that was not on the radar just months ago. This undermines confidence and will make it harder for India to attract foreign direct investment.
Conversely, an investor in the energy sector might see the potential for Exxon Mobil’s return to Russia as a signal that the country could be open for business again. This creates a high-risk, high-reward scenario, betting on a political deal to override sanctions.
This environment makes long-term planning incredibly difficult. It forces businesses and investors to become experts in geopolitics, constantly guessing the next move of leaders like President Trump. The result is a more volatile and less predictable global economy, where political whims can be as important as market fundamentals.